Retail trends are constantly changing as consumer preferences evolve and technology improves. As a result, business owners must keep up with retail industry trends to thrive against the competition. Small businesses in particular need to stay current with retail trends in order to compete with chain stores, appeal to shoppers, and bring in sales.
Here are six retail trends small businesses should watch to drive sales:
1. Omnichannel Sales
Omnichannel sales combine in-person and online sales to create a seamless experience for shoppers and a more organized back office and operations for retailers. When internet sales and online shopping first became popular, many retailers built online stores. However, those websites did not communicate with the in-person stores. As a result, these stores were multichannel, but not omnichannel.
Why Are Omnichannel Sales Important?
Omnichannel sales are important for providing a modern customer experience. However, omnichannel sales also benefit the retailer with more accurate product management, increased customer insights, and improved analytics.
Specifically, omnichannel sales are important for:
- Better inventory management: Centralized inventory means that products aren’t sitting on the back shelf of your retail store while out of stock on your website. Omnichannel inventory allows retailers to get a full-picture view of on-hand products and order merchandise more accurately.
- Increased shopper satisfaction: Omnichannel retailing helps increase customer satisfaction because customers can easily see what products are available in-store and online, view and manage in-store or online orders from one account, and receive more personalized marketing messages.
- More delivery and fulfillment options: Omnichannel retailing allows retailers to offer services like buying online, pickup in-store (BOPIS), ship from store, and easier customer returns.
- More accurate analytics: Having all of the data centralized allows retailers to more easily and accurately spot sales trends, examine customer behavior and shopping journeys, and predict inventory needs.
How to Implement Omnichannel Sales
Implementing omnichannel sales all comes down to having the right technology in place behind your business to handle inventory, order management, and customer accounts. Your data needs to be centralized so that online sales, marketplace sales, and in-person sales all pull from the same inventory and customer database.
Shopify is an ecommerce and point-of-sale (POS) system that allows retailers to implement an omnichannel strategy by centralizing all of the inventory and customer data. In addition to in-person and website sales, Shopify also supports Amazon and eBay sales, Facebook and Instagram sales, sales through Walmart, Buzzfeed, and Houzz for a true omnichannel operation.
Shopify plans start at $29 per month and include an ecommerce site, built-in payment processing, centralized data management, and access to all sales channels. Shopify also has an easy order-management interface, integrations with leading product suppliers and fulfillment partners, and offers discounts on shipping. Visit Shopify to get started.
2. Alternative Payments in Ecommerce
Alternative payment methods in ecommerce have exploded in the past few years. Many retailers, large and small, are offering installment payments or bill-me-later financing at checkout. These types of payment methods are typically supported by an outside financing company, allowing retailers to increase sales without taking on any risk.
Why Are Installment Payment Options Important?
Installments payments or buy now, pay later services increase sales for retailers. When businesses use customer financing options, order sizes increase by up to 120%. These types of payments are popular with customers because it’s a similar concept to paying with a credit card. However, most of these installment payment plans don’t require a credit check and come interest-free, which makes them much more appealing and accessible to more shoppers.
For retailers, installment payments come with no risk and all reward. Most third-party installment payment companies pay the retailer upfront for each transaction completed using installment plans.
Retailers offering installment payment options can receive:
- Decreased cart abandonment: Giving shoppers more easy payment options helps reduce the number of shoppers that bounce once they reach checkout.
- Increased average order values: According to a BigCommerce survey, 36% of customers buy more when financing is available.
- Broader range of customers: Installment payments allow retailers to sell to credit cardless shoppers that don’t want to pay the full sum upfront.
- Increased sales: Of consumers surveyed, 31% have made a purchase using installment payments that they would not have made if that payment option wasn’t available.
How to Implement Installment Payments
Implementing installment payments is as simple as finding one of the many installment payments companies (AfterPay, Klarna, Splitit, Affirm, Sezzle, and more) that integrates with your current ecommerce platform. Most ecommerce platforms like BigCommerce and Shopify have plugins to add installment payments to your site. Some alternative options like PayPal Credit can be installed using a simple Buy button.
For retailers, the only caveat is that installment payments typically come with a higher transaction fee. For example, Square offers installment payments. A regular sale might have a 2.75% transaction fee. With Square Installments that same transaction would come with a 3.5% transaction fee.
3. Two-day Shipping
Fast shipping is not a new retail trend, but it is still an important one, especially for small businesses. As more shoppers turn to Amazon for regular purchases, two-day shipping (or less) is the new norm and what customers have come to expect. Instead of being a luxury, fast shipping is the expectation.
Why Are Fast Shipping Times Important?
Two-day shipping is an important retail trend for small businesses to follow because the consequences of not offering fast and flexible shipping options include decreased sales and customer satisfaction.
Fast shipping options are important because of:
- Higher shopper demand: According to Retail Touchpoints, In 2018, 31% of consumers chose same-day delivery.
- Increased customer loyalty: Of consumers that have used same-day delivery, 74% say they are more likely to purchase from that company again.
- Consumers’ willingness to pay: Fast shipping can be expensive. Luckily, consumers don’t expect all retailers to foot the bill; 47% of shoppers have paid extra for same or next-day shipping.
How to Implement Two-Day Shipping
Exactly how to implement two-day shipping will vary slightly depending on whether you fulfill orders in-house or outsource your fulfillment. If you fulfill in-house, you need to make sure your warehouse picking and packing processes are efficient enough to ship out packages same-day. Then, add additional shipping options onto your website and decide on pricing. As mentioned above, many customers are willing to pay for faster shipping.
If you have a growing business, it may be more efficient to outsource your fulfillment. ShipBob is a popular order fulfillment company that integrates with Shopify, BigCommerce, Squarespace, WooCommerce, and Magento. ShipBob has a network of warehouse centers across the country which ensures fast delivery to customers at an affordable price to retailers. Visit ShipBob to get started.
4. Sustainability as a Priority
Sustainability is an important retail trend for many reasons. Most immediately, many retailers and customers have had to change in operations due to plastic bag bans. Over 400 cities and states have implemented a plastic bag ban or tax. Shoppers living in these areas now have to either bring their own reusable shopping bags, purchase reusable bags, or pay a small fee for paper bags at checkout.
This small, yet immediate change is just the tip of the iceberg. As people, businesses, and policymakers grapple with climate change, the retail industry is one of the first places people look to for change, whether within their own personal shopping habits or larger business shifts.
“Reusable packaging is an important retail trend that has been picking up steam as of late. Traditionally, packaging was the last area companies are looking to innovate; poly mailer bags and cardboard boxes are seen as a cost of doing business. But as consumers grow more aware of the (literal) tons of containers and packaging waste and the realities of climate change, pressure from customers is starting to create real change in business models. Big brands and major national couriers are paying attention now and starting to explore solutions.”
—Mike Newman, CEO, Returnity
Why Is Sustainability in Retail Important?
Retail is a nearly $4 trillion industry in the U.S. Currently, the industry has a tremendous negative impact on the environment, partially due to the large amounts of packaging, excess product, and unsustainable manufacturing processes. However, that also means there is a big opportunity for the retail industry to reduce its environmental impact.
Sustainability is an important retail trend to consider because:
- Consumers want change: In the absence of government regulation, 63% of Americans want businesses to take the lead on driving social and environmental change.
- Apparel industry has big environmental impacts: Together the apparel and footwear industries account for an estimated 8% of global climate impacts; the apparel industry’s impact on climate change increased 35% between 2005 and 2016.
- Shoppers buy according to their values: A majority (52%) of U.S. adults consider a company’s values when making a purchase.
- Small changes can have a big impact: According to Retail Dive, setting an industry-wide target of 60% renewable energy by 2030 would bring a 39% reduction in climate change.
Tips for Making Your Business More Sustainable
Every retailer can play a part in reducing the industry’s environmental impact. And more consumers are choosing brands and products based on their sustainability efforts. Small businesses can reduce their environmental impact and increase profits at the same time.
Retailers can become more sustainable by:
- Choosing manufacturers carefully: Examine each manufacturer’s supply chain and their operations. For example, many overseas factories are coal-powered, or source materials irresponsibly.
- Sourcing locally: The easiest way to make your store more sustainable is by sourcing products locally from independent craftspeople or regional manufacturers that you can inspect and trust. Cutting down the shipping distance also helps reduce the carbon footprint of your business.
- Using sustainable packaging: Eco-friendly packaging and shipping supplies can range from recycled boxes to reused paper scraps. If you purchase recycled packing materials, you may be able to charge consumers more for shipping to offset the cost, as long as the sustainable materials are advertised. Other retailers pack using scrap materials recycled from store operations. For example, Package Free Shop doesn’t use any plastic materials.
- Ditching plastic bags: Even if your area has not implemented a plastic bag ban or tax, consider phasing them out of your store and replacing with paper bags or reusable shopping bags made out of environmentally friendly materials. For example, The Wally Shop ships products in reusable containers.
5. Private Label Products
Private label products are an enormous retail industry trend because they offer so much value to store owners. Private label products are items manufactured by one company, and sold under another company’s name. For example, most grocery retailers have a store brand for food products like canned goods and bread. Pharmacies have store brands for over-the-counter medicine.
Private label products are typically inexpensive for retailers to make and can be priced lower than competing brand name products. This offers shoppers a great value while bringing in more profit for the retailer.
Private label products also make it possible for retailers to develop more original brands and product lines. These types of products help retailers stand out from the competition and offer shoppers something that they can’t get anywhere else.
Why Retailers Should Develop a Private Label Brand
There are very few downsides to developing a private label brand. The initial costs are higher than what you would pay for a regular product order from a wholesaler, but the possible return on investment is much higher.
Retailers should develop a private label brand to:
- Build higher profit margins: Store owners work directly with a manufacturer to develop private label products, which keeps costs low and allows retailers to sell the products for a larger profit margin than what they would get selling a brand name item.
- Develop customer loyalty: Retailers design their own private label products from ingredients to the packaging; private label products can cater to the specific needs of a single retailer’s customers.
- Differentiate your store: Private label products allow retailers to offer merchandise that can’t be found anywhere else.
How to Develop a Private Label Brand
Selling private label products is easier than it seems. You will need a few thousand dollars up front to invest in testing different products, ordering samples, and ordering your initial shipment of the new line. You also may need additional funds to pay for logo development and branding, if that is not something you are comfortable doing yourself.
Once you know what kind of products you want to sell private label (popular products include beauty, cosmetics, food, apparel and accessories, home goods, and decor), you will need to find a private label supplier. Many businesses use Alibaba to connect with overseas manufacturers to develop private labels. However, you can also do a quick Google search, or visit a trade show to find U.S.-based suppliers.
Once you have found a few suppliers, request quotes and product samples. Choose the product you are happy with, design your logo and product packaging, and place your first order.
6. Back to Retail Basics
Evolving technology and changing consumer preferences mean it is easy for retailers to get caught up with what’s next. However, it is crucial that retailers don’t skimp on the basics when following retail trends. The basics include a well-merchandised retail store and top notch customer service. The basics are especially important for small and independent businesses, as product selection and service are a large part of what sets them apart from chain stores.
Why Are Retail Basics Important?
Retail basics are the fundamental aspects of your store: your displays and the service you provide. While retail trends like omnichannel and private label can help increase sales, customer service and product selection are the core reasons customers choose to shop in a particular location.
“Too many retailers have let their physical locations become tired over the past several years. Merchandise has become too much of the same old, same old, and store associates have not been trained in the art of customer service or selling. If you want to add AI or VR, great, but understand that these technologies are not the reasons that customers come to shop. If the sales floor is tired, the merchandise is boring, and the service is not what it should be, you’d best believe shoppers won’t return. Customers don’t care about your fab data collection; they care about what’s in it for them.”
—Rich Kizer & Georganne Bender, KIZER & BENDER Speaking LLC
Go Back to Basics & Follow Retail Trends
Keeping up with your store’s displays, inventory, and your customer service comes down to having a great store manager and giving them the right tools. Your retail store operations manager should regularly train and coach employees, and walk the sales floor making sure all of the displays are tidy.
You also need to have the right day-to-day tools in place such as a POS system. Using a POS system, such as Vend, will give you and your store manager real-time sales data to see what products are selling. This information can then be used to strategically design displays to showcase your hottest selling products, or the ones with the highest profit margins.
Vend also lets retailers set sales goals for each employee and monitor their progress. This allows store managers to easily see which employees may need extra coaching or assistance, and reward top-sellers to keep them motivated.
Vend also has a built-in loyalty program, which helps improve customer service by automatically rewarding regular shoppers. The POS is user-friendly, easy to set up, and works on a variety of hardware. Visit Vend for a free trial.
Retail is a rapidly changing industry. Between implementing omnichannel strategies and creating a more sustainable operation, independent retailers have a lot on their plate. Successfully following retail trends comes down to listening to your customers and their preferences while also continuously upgrading your internal operations and technology. However, the biggest takeaway is to not let your customer service or sales floor suffer in pursuit of changing trends.