The exciting conclusion of the guest contribution series for Omni Talk from Michelle Skupin, Senior Director of Marketing & Communications at RetailMeNot and derived from RetailMeNot’s full 2019 Retailer Playbook.
The way consumers want to shop is changing more rapidly than ever. It might be hard to remember now, but 20 years ago, Amazon was just starting to branch out from media items. Fifteen years ago, there was no Amazon Prime. Subscription services started their rise less than a decade ago. Just five years ago, there were no buyable Pins on Pinterest. And we’ve been able to shop on Instagram for only a couple of years.
The accelerating pace of innovation means that retailers must get used to constantly adapting. We can see this in many of the trends identified in RetailMeNot’s 2019 Retailer Playbook. In the final part of this series on 2019 trends, the Playbook points to where retailers are focusing their attention and resources. Here are three of the key areas where retailers are responding to change.
1. Contending With Amazon
Because of Amazon’s staggering sales, it’s never far from mind for other retailers as they set their strategies. They know they have to respond to Amazon in some way.
Sometimes that means finding areas where they can compete. That’s what Target did over the holidays when it sweetened its free-shipping policies to compete with Amazon’s. This was a savvy move, since 63 percent of shoppers in the RetailMeNot survey said they choose Amazon because of free shipping.
Fifty-eight percent of consumers said they shop with Amazon because of its prices, and other retailers are looking to compete there, too. Some are even experimenting with dynamic pricing to keep pace with Amazon on this front.
Other retailers find ways to team up with Amazon. Kohl’s, for example, accepts Amazon returns and has Amazon smart-home kiosks in some stores. Respondents in the RetailMeNot survey also reported that they are working with Amazon to personalize offers to consumers and expanding their online retailer distribution networks to ensure repeated presence on Amazon.
2. Encouraging Millennials to Buy Through Social
Millennials, the demographic that retailers are focusing their marketing and advertising efforts on in 2019, are known for being digitally savvy, and they’re quite adept at using social media to research purchases and find discounts. But not all of them are on board yet with making purchases through social media ads. Only one-third of Millennials have bought something through a social ad, and 29 percent have bought through an influencer link on social media.
But those percentages could be about to grow. Four in 10 Millennials said they would consider making a purchase through these channels in the future. They key to winning them over could lie in making the purchasing process easier and more seamless.
3. Growing Subscription Services
With subscription services, consumers can sign up for regular shipments of everything from household staples to curated apparel and grooming items. Use of subscription services is on the rise. McKinsey & Company found that the subscription e-commerce market grew by more than 100 percent from 2012 through 2017.
And it looks like there’s more growth ahead. While only 16 percent of consumers buy from subscription services now, those who do seem to really like them. The average subscription shopper buys from three services.
Another 34 percent of consumers said they plan to start buying from subscription services. That figure rises to 46 percent among Millennials and 47 percent among the up-and-coming Generation Z.
What’s driving the interest in these services? Consumers believe that subscriptions help them get the items they want at a lower cost. Some subscription services also have a “try before you buy” aspect, one of the other top retail trends of 2019. For example, customers of subscription pioneer Stitch Fix get clothes in the mail that they try on at home before deciding to buy them.
The majority of retailers believe this is a new strategy to alleviate customer friction when it comes to shopping. There are just so many things consumers want to touch and feel and try on before buying.
Through looking at these trends, we can see that each major change in the retail landscape sets off waves of other changes that retailers must respond to. The winners in 2019 will be the retailers who are quick to spot trends and adapt.