recent marketing trends in retailing

Recent marketing trends in retailing PhD candidate Mindaugas Sinkevičius

2014-09-30

Looking into the crystal ball

“Scientists don't need a crystal ball to predict events. Therefore attending a

conference can be a way of looking into the crystal ball in your field…”

Unknown author

Scientific marketing journals

1. International Journal of Marketing

2. Direct Marketing: An International Journal

3. European Journal of Marketing

4. International Journal of Advertising and Marketing to Children

5. International Journal of Bank Marketing

6. International Journal of Pharmaceutical and Healthcare

Marketing

7. International Journal of Retail & Distribution Management

8. International Journal of Wine Marketing

9. International Marketing Review

10. Journal of Business & Industrial Marketing

11. Journal of Consumer Marketing

12. …

Contents of the presentation

1. Demographic shifts and retailing;

2. “Nowaday” consumer;

3. Current transformations in retailing industry;

4. Recent trends in retailing;

5. “Up to date” retailing model suggestions.

Demographic shifts and retailing

Source: UN, Dept. of Economic and Social Affairs, Population Division (2013). World Population Prospects: The 2012 Revision.

Demographic shifts essential aspects of retail as they

influence or change consumers’ needs and demands.

In Europe, demographic shifts include the following sub

trends:

• Aging population;

• Increase flow of immigrants;

• Increased urbanization.

Global Population Changes (2010-2020)

Source: UN, Dept. of Economic and Social Affairs, Population Division (2013). World Population Prospects: The 2012 Revision.

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

By 2015, there will be more smaller households

of one or two persons, and fewer traditional

family households due to the aging population,

empty nesters, and singles.

Ageing Global Society (1950-2050)

Source: UN World Population Prospects, 2012.

Understanding the Multi-Generational Consumers

Mass appeal approach of the 1980s is history!

Internet Users Worldwide (2005-2014)

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Mobile Phone Users Worldwide (2012-2017)

2012 2013 2014 2015 2016 2017

Source:. eMarketer, 2013

“Nowaday” Consumer (1)

The distinguishing features of “nowaday” consumers:

• Interconnected – interconnectivity is a part of life.

• Individualized – consumers gravitate toward products

and experiences that offer individual focus. They will

desire products and experiences they perceive as

meeting their unique needs.

• In control – with interconnectivity as a base assumption,

consumers are to be more adept at controlling the ways

in which they interact

“Nowaday” Consumer (2)

“Nowaday” consumers hold retailers responsible for the social and

environmental impact of the products they sell. Growing concerns

about sustainability require retailers to develop new strategies, such

as:

• Innovation: Develop, potentially together with suppliers, new and

improved products and production processes.

• Choice influencing: Marketing strategies with product labels

referring to some sustainable theme, such as ‘efficient’,

‘environmentally friendly’, ‘fair (trade)’, ‘healthy’, ‘locally grown’,

‘low impact’, ‘organic’, etc.

• Choice editing: Removal of ‘unsustainable’ products and

processes.

“Nowaday” Consumer: Top drivers of

customer spending

Source: PwC’s Multi-channel Retail Survey 2012

Current transformations in retailing (1)

• Interconnectivity will impact the way people get and share

information, communicate, transact business, even the way they

socialize;

• Many existing retail concepts will reach the end of their

expansion runway;

• Spending on services will grow at the expense of spending on

goods;

• Digital and personal media will continue to grow exponentially

and create new channels for customer insight, interaction and

engagement.

Current transformations in retailing (2)

• Just-in-time supply chain and the technology to support it will no

longer be the gold standard; extremely reduced cycle times will

require accelerated trend identification, entry and exit.

• The value chain will become more intimate: Consumers will

share more information with retailers and suppliers but expect to

get more value in return.

Recent trends in retailing #1

#1: Omnichannel retailing becomes a norm

Consumers shop: Anytime, Anytime, Anyhow, Any Device


#2: Online shopping is to further increase

How many online-only retailer have you shopped in the past 12 months?

PayPal processed payments of 78

Billion USD 2011, which is up 36 %

from 2010. We will most likely see an

explosion in mobile payments in years

to come as several retailers adapt in

order use the different platforms being

developed for mobile payments.


#3: Rapid increase of mobile payments and transactions

using a mobile phone

It is predicted that mobile payments in US

will amount to $90 billion in the 2017.

How often do you shop using…


#4: New forms of consumer loyalty

programs

Businesses with loyalty programs

are more profitable then their

competitors.

Consumers on average are enrolled in 7.4 loyalty

programs. However, each year 53 percent of these

members stop participating in at least one loyalty

program a year.


#5: Retail companies will continue invest in consumer

tracking and purchase data gathering

Companies are to analyzes massive

amounts of information from in-store

sales, online behavior, social media,

and more to determine which products

to promote and how to market them


#6: Retail will grow in emerging markets Forecasted retail sails growth per year


#7: Relationship marketing will emerge

Retailers are to learn that going for the “hard sell” isn’t effective anymore. Instead, they’ll invest in cultivating relationships and establishing thought leadership.


#8: Extreme consumer personalization

EXTREME PERSONALIZATION

Trend #2

source: Cisco Customer Experience Report, 2013

34%of consumers use multiple channels when shopping

49%of consumers are comfortable with retailers

collecting personal data when shopping online

65% of consumers want to receive retail advice based on their location through their mobile device


Trend #2







Trend #2






consumers want to receive retail advice

based on their location through their mobile

device;

consumers are comfortable with retailers

collecting personal data when shopping

online;

consumers use multiple channels when shopping.


#9: The increase of mobile businesses


#10: Personalized shopping experience

Consumers are craving a more personal touch as the world becomes digitized, anonymous, automated, and virtual.

Customized messages, depending on where they are in the stadium. For example, when they arrive at the gates, the app can give them directions towards their seats.


#11: Changes in supply chain due to recent technologies

Technologies like 3D printing will even more dramatically change the nature of the supply chain.

Embrace technology or die!

Recent trends in retailing #11: Consumer

needs for technologies

Which of the following in-store technologies would make your shopping experience better?


• During the last decade, there has been a fantastic growth of what is called social media: Different digital services for sharing views and information, connecting and self branding.

• Social media platforms have

made it possible to connect with

friends and with brands.

Consumer are able to talk about,

share views and experiences with

others with no representative of

brand owner.

I use social media…


#12: The increase of social networks and media



Which of the following have you done using social media?

Issues to resolve (1)

Information Overload

Retailers will be awash in data. The typical

retailer will capture not just product

profitability and store and transaction data

but also customer data and operating data

delivered nonstop by in-store devices.

The majority of consumers accept giving up

some privacy for free services, better

services and ease of use as long as they

have transparency on the use of their

personal data.

Issues to resolve (2)

Individual’s privacy and data security issues

Information sharing will reach new levels: between supplier and

retailer, supplier and consumer, retailer and consumer, and

consumer and consumer. Consumers will feel the risk of sharing

data unless it is outweighed by the rewards.

Why don’t you buy products online?

Summing up the trends

In 2015, the market will talk to the retailers and

suppliers that tune in:

• Consumers will tell you what they want-if you know

where to listen;

• More places to listen to consumers and spot trends;

• More tools and technologies to enable more focused

responses;

• Greater opportunity to be specific, individualized and

relevant.

Up-to-date retailing model

Thank you for your attention!

Mindaugas Sinkevičius

Ph. D. Candidate at ISM

University of Management and Economics

Arklių g. 18, Vilnius LT-01129, LITHUANIA

Phone: +370 676 36853

E-mail: [email protected]

“Time is running will you do anything to stand out

of the crowd?