12 Retail Trends and Predictions for 2015

12 Retail Trends
and Predictions
for 2015
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In 2014, we saw more merchants venture into
omnichannel retailing and try in-store marketing
solutions such as beacons.
Next year, we anticipate stores to double down
on these strategies and continue to ﬁnd ways to
bridge the gap between oﬄine and digital
channels.
In addition, we expect platforms such as social
media and mobile to play bigger roles in people's
shopping experiences.
We discuss these trends—among many others—
in more detail in this presentation. See how you
can use them to make decisions in 2015, stay
ahead of your competitors, and provide a better
customer experience.

Most boomers will be in their 60s and 70s next
year, and retailers that cater to these consumers
will need to adjust to make shopping easier for
them.
Retail expert Georganne Bender pointed out in
VOA News that this can already be seen at some
drugstore chains. “They’re re-setting their
counters, not putting things too high or too low,
[and] they’re putting carpeting in the store,” she
told the publication.
Baby boomers and millennials
will continue to inﬂuence retail.1

On the flip side, Gen Y will also be a major
influence in retail. Merchants who want to reach
millennials will need to invest in mobile, as they
are the largest group of smartphone owners.
Speed is also an essential factor for reaching Gen
Y. As a generation that grew up in an age where
almost anything is just a click away, millennials
have a tendency to be impatient. Retailers who
want to engage them must invest in more robust
order fulfillment systems and fast (but excellent)
customer service.
Baby boomers and millennials
will continue to influence retail.1

BARBARA THAU
BUSINESS REPORTER, FORBES
“By the next decade, the Millennial
generation, roughly ages 18 to 34, is
expected to displace the baby boomers
as the nation’s biggest consumer buying
group, generating a projected $1.4 trillion
in spending by 2020, according to
Accenture research.
Retailers and brand marketers would be
wise to take note, as the preferences of
this buying group will dominate
purchasing decisions for decades to
come.”

In recent years brands have used social media to
market their products, talk to customers, and
even make merchandising decisions.
In the coming months, we anticipate merchants
to add “selling” to the list of things they can do
on social sites.
The recent launches of shopping functionalities
in the social realm (i.e. Facebook’s and Twitter’s
“buy” buttons and Curalate’s Like2Buy platform
for Instagram) tell us that social is going to get a
whole lot more shoppable in 2015.
Social networks will serve as
shopping platforms.2

Retailers that have already started participating
in the trend include Nordstrom and Target, which
are using the Like2Buy platform on Instagram,
and Home Depot, (RED), and Burberry, which are
testing Twitter’s buy button.
If social shopping takes oﬀ—and there’s a good
chance that it will—users will be able to enjoy a
more seamless shopping experience. The clunky
transition from one channel to the next (i.e. social
to ecommerce) will be eliminated and purchases
will be completed much faster.
Social networks will serve as
shopping platforms.2

Consumers these days are more drawn to
retailers that invest in Corporate Social
Responsibility (CSR).
A survey by Cone Communications and Echo
Research uncovered that 87 percent of global
consumers factor in CSR into their purchase
decisions.
In 2015, we expect more merchants to launch
ethical and good deed initiatives.
Brands will double down on
Corporate Social Responsibility.3

Examples of CSR include ModCloth’s anti-
Photoshop pledge, and Warby Parker, which
implements a “Give a Pair” initiative to make eye
care more accessible to the less-fortunate.
How does CSR improve the shopping
experience? Simple. It makes customers feel
good knowing that they’re contributing to a
worthwhile cause.
As Adrianne Weissman, owner of apparel store
Evelyn & Arthur told us, “shoppers want to know
the money they are spending is not going into
one person’s pocket, but is truly making a
diﬀerence in the community they live in.”
Brands will double down on
Corporate Social Responsibility.3

Enriching and personalizing the shopping
journey will no longer be limited to tailored
product recommendations and offers.
Forward-thinking retailers will find additional
ways to make each customer’s experience
unique and memorable. We predict that one of
the areas that they’ll focus on is customer loyalty.
When it comes to reward programs, the “points-
for-purchases” model just isn’t cutting it
anymore. The practice has become so
commonplace that the allure of earning points
doesn’t excite consumers the way it used to.
The points-for-purchase loyalty
model will be less effective.4

That’s why in 2015 retailers have to deliver more
imaginative eﬀorts to reward and incentivize
shoppers.
The loyalty programs of
the future will reward
shoppers for their actions
and engagement, rather
than just purchases.
Walgreens, for example,
now lets its members
earn points by engaging
in healthy activities like
walking & weight tracking.

Customized perks will also be a big part of
loyalty program success in the coming year.
Research cited by eMarketer revealed that
“consumers have begun to expect more
personalized offers and services—not just
blanket discounts—in return for their
participation” in rewards programs.
Moreover, according to the study, consumers
cited relevant discounts and personalized offers
as the top benefits of such programs.

POS TECHNOLOGY
Initiatives to make the cash register extinct will
continue to go strong in 2015. Cloud-based point-
of-sale systems have proven that they can
outperform old-fashioned registers in all aspects
(performance, functionality, looks) and an
increasing number of retailers will recognize this
and make the switch.
Will you be one of the savvy merchants upgrading
to a cloud-based POS system next year?
Try Vend for free and see how it can help you
transform your business in 2015.
Retailers will adopt and
experiment with technology.5

BEACONS
Beacons will make their way into even more
stores in the coming year. The technology, which
provides in-store analytics and marketing
solutions for brick-and-mortar retailers, has
already generated results for several merchants,
including US grocery giant Safeway, which is why
we’re conﬁdent that beacon adoption will
continue to grow in 2015.

WEARABLES
Research by Acquity Group has shown that about
7% of consumers currently own wearable gadgets
such as smart watches, glasses, and ﬁtness
monitors. This ﬁgure is expected to double in
2015, prodding companies to experiment with
how they can use wearable technology.
According to Retail TouchPoints, Barneys New
York is “is venturing into the wearable tech world
through a collaboration with Opening Ceremony,
the Council of Fashion Designers of America and
Intel.” Meanwhile, Kenneth Cole unveiled a
Google Glass app in 2014 to market cologne.

AUGMENTED REALITY
We’ve already seen plenty of AR-centric efforts in
retail. From virtual fitting rooms to interactive
window displays, merchants are continuously
finding ways to use augmented reality to draw
attention and improve experiences. Walgreens,
for instance, is testing Google’s Project Tango 3D
to create AR-enabled mobile maps and navigation
for its customers.
Expect such experiments to continue in 2015.

3D PRINTING
We also anticipate 3D printing to make its way
into the retail world.
Some merchants, including online jewelry store
Brilliance.com, have already found a use for the
technology. Brilliance is using 3D mock-ups to
help customers try on diﬀerent rings so they can
determine the right size, shape, carat, and
diamond arrangement for their hands.

Next year, we expect the number of SMBs using
big data and analytics to grow.
Retailers will realize that they need to rely on
data in order to get to know their customers and
provide customized shopping experiences.
Fortunately, there are plenty of solutions that
make data analytics accessible and aﬀordable
for small and medium retailers.
Data will be more
accessible and powerful.6

Swarm for instance, gives brick-and-mortar
stores the ability to analyze foot traffic so they
can make better decisions and tailor customer
interactions. There’s also Collect, which gives
merchants insights into the spending habits of
their top customers, allowing them to send
personalized rewards and offers.
Vendors will continue to develop and refine their
solutions so they can provide the most accurate
and insightful data in the fastest and most
convenient ways possible.
Data will be more
accessible and powerful.6

DAN BERTHIAUME
SENIOR EDITOR, CHAIN STORE AGE
“Granular, real-time Big Data analysis can
take retailers closer to providing true
“one-to-one” personalization, where the
customer has a completely tailored
experience that seamlessly travels with
them across all touch points, in real time.
No retailer has fully achieved this
personalization goal to date, but drilling
deep into Big Data in a timely fashion is an
encouraging step forward.”

The past couple of years have brought us far too
many horror stories of data breaches in retail.
As Chain Store Age cites, “The 2014 Identity
Fraud Study reported an increase of more than
500,000 fraud victims to 13.1 million people in
2013, the second highest number since the study
began.”
Moreover, it’s been found that the average cost of
a breach per organization in 2014 is $3.5 million—
an increase of 15 percent from the year before.
Companies will ﬁnd better
ways to manage risk7

In this day and age, consumers aren’t just looking
for unique and convenient shopping experiences
—they also want their purchasing journeys to be
safe and secure. So in 2015, we anticipate risk
mitigation and data security to be among retailers’
top priorities.
There are a number of ways retailers can better
manage risk in the coming year. One is to instill
awareness and training across the entire
organization to ensure that everyone knows the
importance of risk mitigation. Retailers can also
be more selective of their vendors that handle
their data and processes.

We also expect merchants and solutions
providers to come up with better ways to protect
customer data. Retailers and ﬁnancial institutions
in Australia, for example, have recently made the
PIN as the primary form of card payment
authorization because it has proven to be more
secure than signatures.
Another interesting security initiative can be seen
in Apple Pay, which assigns a unique Device
Account Number to each phone so credit or debit
card numbers are never transmitted with the
payment, nor are they shared with merchants.

JOE SKORUPA
EDITOR IN CHIEF, RIS NEWS
“Two huge trends that will be hot in 2015
are security, due to the many data
breaches that have reached epic
proportions, and payment solutions,
notably the EMV [Europay, MasterCard
and Visa] mandate that goes into eﬀect on
October 15.
Retailers will be devoting many dollars and
resources to these major retail trends.”

In their book, The New Rules of Retail, Robin
Lewis and Michael Dart assert that if retailers
truly want to provide compelling shopper
experiences, they need to take more control of
how their products are manufactured, marketed,
and distributed.
As the authors put it, the most successful
retailers will be the ones that have “complete
control of their value chain, from creation all the
way to consumption.”
More retailers will take control
of their value chain and
improve order fulﬁllment
8

Notable retailers that have proven this strategy
include Apple, Ralph Lauren, and Trader Joe’s.
Despite having higher prices, these retailers
managed to achieve customer loyalty and
proﬁtability thanks to their eﬀorts to have
complete value chain control—a strategy that
results in excellent products and customer
experiences.
Retailers will realize this in 2015, which is why
we’ll likely see an increase in value chain
initiatives, single product retail, and private label
merchandise.
8

Additionally, more retailers will get creative with
how they fulﬁll orders and distribute products.
Speed and convenience will become more
important than ever, so merchants will come up
with better and faster ways to get products into
the hands of their customers.
This will pave the way for more robust order
fulﬁllment practices (such as same-day delivery
and click-and-collect), on-the-go retail (including
pop-ups and food trucks), self-service centers
(such as Amazon Lockers), and other non-
traditional strategies.
8

In 2014, we saw a number of ecommerce-first
businesses expandoffline. Birchbox, for example,
opened its first physical shop in Soho last July,
while companies like Bonobos and Warby Parker
opened more physical stores in 2014.
We anticipate this trend to continue in 2015. The
majority of overall retail sales are still taking place
offline, and ecommerce sites have realized that
they need to set up physical shops if they want to
gain significant market share. Additionally, the
need to provide seamless online to in-store
experiences continues to grow, requiring both a
digital and physical presence.
More ecommerce sites will
set up shop offline9

Ecommerce sites setting up shop offline is good
news for the brick-and-mortar realm because it
validates the need for physical retail. However, it
also means that Main Street is going to get a
more competitive, and traditional brick-and-mortar
retailers must step up their game in order to win.
To do this, we predict that merchants will further
enrich the in-store experience by offering
services on top of “stuff.” For example, Urban
Outfitters recently opened a New York branch
with on-site salon and coffee shop in a move to
create a destination, rather than just a store.
More ecommerce sites will
set up shop offline9

Localization will be more important than ever.
Merchants that customize their stores and
merchandise according the needs of their local
communities will ﬁnd great success in 2015.
Take for instance, O’Reilly Auto Parts, a retailer
that tailors its merchandise mix from store to
store.
As Retail Info Systems News reported, “Each
O’Reilly store is also a local store, carrying the
tools, equipment and accessories that match the
speciﬁc auto aftermarket needs of the store’s
customer base as well as the vehicles they own.”
Retailers that localize product
mix and store formats will win10

Retailers will also need to tailor store formats
based on their communities and locations.
Consider what retailers such as Starbucks,
Target, and Chipotle are doing. In order to tap
into dense, urban markets, these chains have
started to deviate from their usual store formats
to establish smaller, “express” stores.
We predict more stores will follow suit and tailor
experiences, merchandise, and even store
formats to the neighborhoods they belong to.
The ones that do (or that continue to do so) will
win big in 2015.
Retailers that localize product
mix and store formats will win10

Mobile will show no signs of slowing down next
year and we anticipate smartphones and tablets
to play bigger roles in the shopping journey.
Expect to see more of the following:
LOYALTY APPS
Next year, more retailers will introduce mobile
loyalty programs. Shoppers will no longer have to
clutter up their wallets with physical cards.
Instead, they can track and redeem their rewards
using smartphones through apps such as Collect.
Mobile will continue to
grow in all directions11

MOBILE SERVICES
Convenient services such as mobile ordering will
be more prevalent. Larger merchants are already
implementing this, but thanks to solutions like
Mobi2Go, SMBs can also get in on the mobile fun.
For example, Bird On a Wire, a free-range
rotisserie chicken joint in New Zealand, uses the
solution to oﬀer online and mobile ordering.
“Mobi2Go mitigates big lines in the shop,
integrates directly with our POS system Vend, and
is an additional revenue stream for us. It works
really well,” shared owner Ben Grant.

MOBILE PAYMENT SOLUTIONS
The number of consumers using mobile wallets
will increase, so expect less card-swiping or cash-
handling and more phone-scanning in 2015.
Merchants who want to keep up with mobile
payments but are confused as to which method to
adopt can look into Poynt, a smart terminal that
supports multiple payment technologies including
NFC, Bluetooth, QR codes, EMV, and magnetic
stripe cards. Whether a customer wants to pay
using Apple Pay, Google Wallet, CurrentC, or
beacon technology, the retailer can ring them up.

As expected, retailers embracing multiple
channels to serve customers will be some of the
most successful ones in 2015, as omnichannel
retailing has begun to pay oﬀ for a lot of
companies.
For example, according to MediaPost, Macy’s
department store has found that click-and-collect
not only serves as a convenient option for
customers, but it also increases spending. In
addition to click-and-collect Macy’s will continue
to invest in omnichannel through more robust
order fulﬁllment strategies and better mobile
experiences.
Stores with omnichannel
strategies will thrive12

MIYA KNIGHTS
SENIOR RESEARCH ANALYST,
INTERNATIONAL DATA CORPORATION
“Consumers don’t distinguish between
channels. They are channel blind,
therefore they expect the same service,
products, oﬀers, and pricing online as they
do in-store and on mobile. This is why
merchants need to make sure that their
retail propositions are consistent across all
channels.
Retailers will continue to build
omnichannel presences to meet this
customer demand.”

This post contains some pretty bold and diverse
predictions, but if we really think about it, every single
one of them boils down to one thing: improving the
customer experience.
Always ask yourself if your efforts are truly making
shopping faster, safer, and more enjoyable for your
customers. Stick with that strategy, and you’ll be just ﬁne
in the future.
And if you’re looking for insights about these trends, be
sure to check out our in-depth article on the Vend Retail
Blog and LinkedIn.
Bottom line: It’s all about
the customer experience

What do you think of these predictions?
Can you relate?
See our full trend forecast and share your thoughts.
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12 Retail Trends and Predictions for 2015

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12 Retail Trends and Predictions for 2015