In 2017, retail will be riveting and relevant.

Stemming from last year’s push toward personalized experiences, this year’s hottest retail trends will elevate the customer experience with superior quality products and build closer relationships with consumers so companies can confidently deliver what shoppers want.

The following predictions reflect what retail and consumer goods companies need to know to prepare for the year ahead to captivate shoppers, drive sales and triumph in this competitive sector.

1. Artisan and culinary products

Growing consumer demand for upscale, authentic goods means more retail companies will offer artisan and culinary products in 2017. These premium, high-quality products are produced by experts who are passionate about their craft. To satisfy consumers who are ravenous for refined culinary experiences, coffee giant Starbucks recently launched the premium Starbucks Reserve store format. These stores offer exclusive micro-lot coffees paired with artisanal food offerings from Princi, a chain of Italian artisan bakeries, which earned Starbucks’ investment. 1Close, Kerry. Starbucks Will Open Italian Bakeries That Serve Pizza. Money. December 7, 2016. 2 Ibid. In addition, hand-crafted breads, pastries, chocolate, cheese and other foods made with fine, fresh ingredients will sell well this year. 3 Hartman, Lauren R. Artisanal Foods Increase in Popularity. Food Processing. June 29, 2015. Beyond foods, big retailers like Nordstrom have approached small artisans to entice new shoppers with locally made, handcrafted items. 4 Simon, Ruth. Big Retailers Seek Small-Artist Touch. The Wall Street Journal. November 26, 2015.

2. Retailtainment

To stand out in 2017 by inspiring Instagram-worthy shopping experiences, more brick and mortar retailers will embrace “retailtainment,” a thrilling fusion of retail and entertainment. To encourage shoppers to linger longer in stores – and tell their Facebook friends –retailers will cater to consumer lifestyles with premium offerings like boutique coffee shops and prosecco bars.5Rowsell, Vaughan. Top five retail trends to watch in 2017. Smart Company. November 24, 2016. 6Geoghegan, Jill. Top five retail and fashion trends for 2017. Drapers Online. December 13, 2016. Shopping malls will also woo health enthusiasts and experience-seeking millennials with indoor skydiving and climbing walls.7Gonsior, Ted and Ben Brown. A fresh take on ‘Retailtainment’ and future of fun. Chain Store Age. May 25, 2016. Even the world’s largest retailer is investing in retailtainment: Walmart recently asked suppliers to help transform stores into exciting destinations for shoppers. Walmart uses product demonstrations, samples and headline-making promotions and events (like meeting professional bull riders) to boost store traffic, sales and word of mouth. 8Souza, Kim. Walmart asks suppliers to help it woo customers with ‘retailtainment’ venues in stores. Talk Business & Politics. June 14, 2016. 9Wahba, Phil. Why Walmart Is Inviting Real-Life Bulls to 240 of Its Store. Fortune. June 22, 2016.

3. ‘Phygital’ expansion

Since omnichannel started to take off last year, retail companies will invest more in both physical stores and digital channels to improve the customer experience. Experts predict online sales will rise 15% in 2017 due to consumers’ increasing willingness to embrace the convenience of 24/7 online shopping10Rosenberg, Howard. 5 key trends for retail in 2017. IT Pro Portal. December 16, 2016.. More retailers and manufacturers of all sizes will build closer relationships with consumers by selling directly to them online. Last year, U.S. shoppers smashed sales records by spending nearly $7 billion in online purchases on Black Friday and Cyber Monday. 11Lonoff Schiff, Jennifer. 5 digital retail trends that will be big in 2017. CIO. December 21, 2016. The growing popularity of online shopping prompted Walmart and Williams-Sonoma to invest in transforming their supply chains for e-commerce success12Chao, Lorretta and Steven Norton. Retailers Bet Big on Retooling Their Supply Chains for E-Commerce. The Wall Street Journal. January 28, 2016.. Other companies like Macy’s are using cross-border e-commerce to expand into lucrative foreign markets like China to satisfy pent-up demand for U.S. products.13Loras, Sophie. Cross-border ecommerce: tips for selling online into China. Clickz. January 26, 2016. Meanwhile, online retail leaders like Amazon, Birchbox and Warby Parker all opened physical stores last year to offer omnichannel options to make shopping easy, convenient and immediate. Why is ‘phygital’ so important? As Harvard Business Review reports, omnichannel shoppers spend 4% more in store and 10% more online than single-channel customers. 14Sopadjieva, Emma, Uptal M. Dholakia and Beth Benjamin. A Study of 46,000 Shoppers Shows That Omnichannel Retailing Works. Harvard Business Review. January 3, 2017.

4. Predictive analytics

In 2017, retail companies will increase their use of big data analytics to translate shopper data into meaningful insights, and create relevant, personalized marketing campaigns to prompt purchases.15 Geoghegan, Jill. Top five retail and fashion trends for 2017. Drapers Online. December 13, 2016. In addition, predictive analytics will give retail companies greater certainty of what customers want so consumers feel understood.16 Berthiaume, Dan. Top 10 Disruptive Retail Trends for 2016. Chain Store Age. December 7, 2015. Amazon masters predictive analytics to effectively anticipate which products an individual shopper might buy and Kroger recently acquired a predictive analytics firm to gain an edge in grocery with detailed insights into consumer tastes.17Progressive Grocer. Kroger Acquires Analytics Firm. August 2, 2016. According to Forrester, “Predictive marketing analytics use correlates with better business results … [it] pays off.”18Levine, Barry. Forrester Report: Companies Using Predictive Analytics Make More Money. Marketing Land. January 14, 2016.

5. Retail tech innovation

Technology will continue to reinvent how people shop by making shopping more experiential and exciting in 2017. For instance, the newly announced Amazon Go grocery store format uses artificial intelligence (AI) technology to save shoppers time with checkout-free shopping. The e-commerce giant’s “Just Walk Out” technology uses AI and in-store sensors to deliver an easy, seamless customer experience19Alba, Davey. Only Amazon Could Make a Checkout-Free Grocery Store a Reality. WIRED. December 6, 2016.. Also, virtual reality (VR) immerses consumers in a simulated world, allowing consumers to try on apparel or makeup without the need to visit a store. 20McKone, Dan, Robert Haslehurst and Maria Steingoltz. Virtual and Augmented Reality Will Reshape Retail. Harvard Business Review. September 9, 2016. VR will also help retail companies sell major items like furniture by reassuring shoppers that a particular piece will fit and look perfect in their home.21Arthur, Rachel. Future Of Retail: Artificial Intelligence And Virtual Reality Have Big Roles To Play. Forbes. June 15, 2016.

6. Small is big

This year, smaller store formats and independent retailers will grow in importance. To appeal to Millennials, big box retailer Target is opening new, smaller store formats. For instance, near the University of Minnesota campus, Target opened a store less than 15% the size of an average store for a more intimate, relevant shopping experience.22Safdar, Khadeeja. Target Goes After Millennials With Small, Focused Stores. Wall Street Journal. October 4, 2016. Meanwhile, to gain a competitive advantage against massive retail brands, smaller retailers will try to build brand awareness and trust by satisfying consumers’ desire for a personal touch, excellent customer service and local community involvement.23 Smith, Cara. The Local Store vs. The Mass Online Retailer. Huddle. December 14, 2016.

How to set your company up for success

To make shopping fun and engaging in 2017, retailers and manufacturers will invest in impressing shoppers with artisan and culinary products, retailtainment and retail technology innovation. Businesses will also get closer to shoppers through e-commerce and deeper consumer insights for a more meaningful, convenient and relevant customer experience. Stay tuned as we will take a closer look into each of these trends and what they mean to your business.

What other retail trends do you predict for 2017?

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  1. Excellent article. I have seen many of these trends first hand in the clients I work with.

  2. Well done. I sincerely hope that small independent retailers who have been losing store traffic while gaining average sale don’t over-read their future success. (Is #6 the eraser of those before it? NO.) They have the same issues – fixed or rising occupancy costs, increased labor expenses, and a highly competitive field that is trying desperately to hang onto and attract every single consumer dollar.

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