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Genration Z

‘Digitally Native’ generation still prefer shops

New figures reveal the first fully ‘digitally native’ generation still prefer brick and mortar shopping to online browsing.

Released by IBM and the National Retail Federation, the study reveals a massive majority of ‘Generation Z’ consumers between the ages of 13-21 still prefer physical shopping environments.

Specifically described as being born between the mid-1990s and early 2000s, Generation Z are the first children to grow up into the digital age, into a world of mobile phones, home computing and the internet.

67% of Generation Z prefer shopping in-store most of the time, with a further 31% still often shopping on high streets, indicating that just 2% of the ‘always on’ generation only shop online.

“Just as Millennials overtook Gen X, there’s another big buying group retailers need to plan for, and it’s even larger: Generation Z,” National Retail Federation President and CEO Matthew Shay said. “They appreciate the hands-on experience of shopping in a store.”

The global population of ‘Gen Z’ is set to reach 2.6 Billion by 2020, and are expected bring a huge amount of buying power, as estimates suggest the new generation have access to around $44 billion in disposable income.

66% say that product quality and availability are the top factors when choosing brand, although value is another major focus as over half admit to a lack of brand loyalty compared to other generations.

As technology is continuing to evolve, and eCommerce has changed to reflect that, a main concern for retail has been to not get left in the dust, with Mr Shay explaining that retailers need to continue to be “agile” if they want to stay relevant.

“Retailers are constantly focused on experimenting with new innovations both online and in-store to remain relevant to evolving consumer demand.”

 

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Industry Spotlight: Technology Trumps Tradition

With retailers constantly seeking new ways to interact with customers, digital technology has emerged as a way to deliver more relevant and engaging content. But how much notice do customers actually take?

A report released by global marketing solutions and communications provider, APS Group, uncovers some of the mysteries of customers’ interaction with store signage.

By using eye-tracking technology to measure the reactions of more than 1.6m shoppers, the study finds that almost double the number of people looked at and engaged with shop window displays if the retailer used animated, digital content instead of traditional print.

Results also demonstrated that not only are digital screens more appealing, but they also enable brands to tailor their messages and offerings to give customers what they want, when and where they want it.

 

To download a free copy of the whitepaper click here.

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Tesco launches new ‘Food Love Stories’ campaign

Tesco has today launched ‘Food Love Stories brought to you by Tesco’, a new campaign which aims to highlight passion, care and nostalgia in food.

Each month, the campaign will introduce food love stories to emphasise the importance of food and the effects it brings.

The stories aim to capture the mind-set of its customers throughout the year, from wholesome, hearty meals in January, to fresh, vibrant meals perfect for a summer evening.

“We’ve always taken great pride in the quality of our food” explained Michell McEttrick, group brand director at Tesco, adding that the campaign aims to put food at “the very heart of our business and tells the stories behind the meals we all make for those closest to us.”

The ad campaign will appear online as well as with spots on Coronation Street, Emmerdale and The Undateables. Recipe cards and ingredients are expected to be available at all large stores, as well as online at tesco.com

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Blog: Toby Cruse: Amazon’s ‘Death Star’ to Take the Skies

Currently, if you want a package delivered from the Amazon’s airborne courier system in the UK, you need to have a large garden live near an Amazon delivery depot and want a very light package, but that’s looking to change.

The service, known as Prime Air, made its first successful touchdown in December, taking just 13 minutes between placing the order and arriving in the user’s back garden just outside of Cambridge.

While the online commercial giant has barely left the ground yet, plans have already been put forward to take the company to greater heights.

Discovered by CB Insight’s Zoe Leavitt, the new patents reveal ‘airborne warehouses’ designed to hang in the sky at 45,000 ft.

Described by Leavitt as Amazon’s very own “Death Star,” the patents also seemingly show designs of multi-purpose docking stations that could be built onto lamp posts, as well as buildings and other structures.

Using communication links known as a ‘Mesh Network,’ the drones will be able to transmit data between each other to send alerts of their environments.

Factors from how clear the weather is to the distance of a customer are hoped to be tackled by these airships, or “airborne fulfilment centres,” which would be able to travel to calmer climates as well as to hotspots where the service is in more greater demand.

The UK laws on drone piloting are continuing to evolve as they become more and more popular, but they currently do not allow for flying over or within 150m of congested areas, or within 50m of any vessel, structure or vehicle not controlled by the pilot.

However, even with these laws the UK is considered much more lenient than many countries. American drone users, for example, required a licence and a special waiver from the Federal Aviation Authority until August last year.

So far the Prime Air sounds very compelling for the 2 customers close enough to an Amazon warehouse to be viable, especially since the service doesn’t cost any more than the customers are already paying, but whether or not your orders are going to be sent to you gift-wrapped from the clouds in the near future is still up in the air.

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Guest Blog, Leon Edwards: Is this the last Christmas before online takes over?

It would have been hard to miss a retail story in the pages of last January’s news outlets. It’s not difficult to foresee the same for this New Year given the next eight weeks will be critical to many UK retailers. We’ve just seen Black Friday come and go, and the countdown to Christmas has just begun. If you read market analysts’ comments, their respective prediction is an 11 per cent growth on last year for both events an important statistic in itself when considering the beleaguered high street and its various woes; watch out the retailer that gets Christmas wrong.

Of greater importance to our brick and mortar stores is the continued rise of online sale. Black Friday, the sometimes maniacal, always bargained ladened US-style event, takes internet shopping to new heights. In 2015, estimates suggest £3-4 billion in retail sales over the period with as much as one third being spent online.

A similar trend can be seen throughout the whole Christmas shopping period, admittedly with a lower cyber-shopping focus. This has led to Christmas footfall reducing year-on-year – meaning fewer people in the shops. In fact, data suggests that the only increase we’ve seen in shoppers visiting physical stores is to pick up their ‘click and collect’ items.

If things continue, it won’t be long before the majority of our festive bargains are snatched up online. What will this mean for the high street and for retailers in general?

There’s a strong economic argument to eCommerce: no expensive property to fill and maintain leading to better margins, broader ranges and better availability. But, with the transparency that the internet brings, surely it’s just a race to the bottom where the lowest price and quickest delivery wins.

With stores you get interaction, entertainment and people. Not that people always help: a recent study we conducted found that of the 2,008 UK-based consumers polled, 68 per cent were put off by store staff ‘actively selling’ to them. Perhaps not a surprise when 89 per cent of 968 sales assistants we spoke to said they did not enjoy the experience at all.

It’s likely that this type of consumer sentiment isn’t helping in the battle against online, and if the trend continues, shops have much work to do to survive, let alone thrive.

I don’t think anyone is predicting the complete demise of the retail store just yet. They point at Amazon’s retail stores as a beacon of hope. But, the retail environment will change as a result of our changing shopping habits – it has to.

We are starting to see that transition already with augmented reality (AR) shopping experiences, multi-store layouts and ‘social’ retailing where a coffee and sit down might replace a pushy assistant.

There are many occasions that I walk back out of a shop empty handed even though I need the product(s) I’m shopping for. More help with wayfinding, product selection and speed of transaction is required. After all, part of the internet’s joy is the ease of finding and purchasing products.

Perhaps it’s time to borrow something, other than Black Friday, from our American cousins; the art of traditional retailing where the customer experience is all that matters.

 

Leon Edwards is the managing director of www.Displaymode.co.uk, a UK point of purchase company. It is a privately owned business that employs 55 people at its design and manufacturing facility in Northamptonshire. With an enviable client list from the retail and consumer goods world, they have exported to 34 countries since the Brexit vote.

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In-store and online equal in popularity this Christmas…

The second annual Rubicon Project ‘Christmas Consumer Pulse Poll’ suggests online shopping will be as popular as in-store this holiday season.

Based on a conducted 1,000 interviews in the UK, the poll found 76 per cent of consumers are planning on completing gift purchases online – equal to the amount that plan to shop in-store – and almost nine in 10 (88 per cent) will shop and/or research their Christmas purchases online.

With nearly one-quarter (24 per cent) declaring they will not do any Christmas shopping in-store this year, the study also revealed 45 per cent will make a Christmas purchase via their mobile device. This is largely defined by two demographics: 75 per cent of millennials and 66 per cent of parents will do at least some of their Christmas shopping on a mobile.

Anticipated spend for Christmas this year is £748 per person, up from a recorded £732 in the same research last year. 77 per cent of respondents to this year’s survey said they plan to spend the same or more, whilst just 23 per cent plan to spend less on their Christmas shopping.

 

Read more on the findings and download the poll here

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Shoppers demand transparency from online retailers…

Online shoppers in the UK are demanding retailers to be honest and transparent on whether they have suffered a security breach, a survey commissioned by NTT Security has revealed.

When asked what retailers could do to help build consumer trust when online shopping, 80 per cent of the 500 survey respondents said they expect more transparency following a breach, as well as more secure payment options and for retailers to insist on regularly changing and using strong passwords.

Further to worrying about the risk of paying online and identity fraud, the majority are also concerned about the privacy of personal information (63 per cent), a site being fake (63 per cent) and the risk of being sent ‘phishing emails’ that link to malware (60 per cent).

Stuart Reed, director at NTT Security said: “The retail sector is among one of the most targeted industries for attacks and, with one of the busiest trading periods of the year now upon us, it makes sense that both consumers and retailers are diligent in terms of data security.

“While some shoppers are happy to continue using sites, even when they have been breached, they are also anxious for retailers to let customers know when they have been hacked. Consumers certainly seem to be growing in security awareness when online; more savvy, they are willing to take responsibility for their own security to some extent, but they are also more demanding of retailers and expect to see privacy and security polices displayed clearly on websites.”

However, only 18 per cent would permanently stop using a retailer’s website if a security breach was exposed and a third admit they would carry on using an online store but would upgrade their security.

More than 40 per cent believe retailers should publish their privacy policies to allow customers to see how data is being stored and managed, while a third (32 per cent) want stores to listen and respond to customer concerns via social media to help build consumer trust.

 

Read more on the research, including five top tips on how retailers can mitigate cyber risks here

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eCommerce Christmas sales expected to hit over £16bn in the UK…

The data and market research company, eMarketer, has predicted that UK retail eCommerce sales will reach an estimated £16.9 billion during the ‘core’ season shopping period of November and December; an increase from the £14.65 billion recorded in 2015 and the rising use of consumers making purchases via their smartphones considered a major contributor to eMarketer’s predictions.

According to analysis, the smartphone medium will account for 36.4 per cent of total retail mCommerce (mobile commerce) sales for the whole of 2016, and by the year 2020, total mCommerce sales is estimated to reach 52 per cent.

Senior analyst at eMarketer, Bill Fisher said: “Retail ecommerce sales during the festive season look set to shine this year, despite the wider economic conditions in the UK. This is in no small part due to a digitally advanced consumer, who has been quick to embrace digital buying and particularly smartphone buying. And during the Christmas shopping period, these digital habits become even more accentuated.”

 

Read more from eMarketer here

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Personalisation to substantially spur digital coupon growth by 2021…

A new study from the digital market research specialists, Juniper Research has found that the number of coupons issued via mobile and online channels will grow by more than 60 per cent over the next five years – increasing from 224 billion in 2016 to an estimated 362 billion by 2021.

The ‘Mobile & Online Coupons: Loyalty & Beacon Engagement 2016-2021’ report indicates growth in digital coupon volumes is mainly attributed to a greater retailer emphasis on the provision of highly targeted, personalised offers to consumers; as well as brands deploying artificial intelligence applications which can interact with consumers via social media and messaging applications such as Facebook Messenger.

A wide-scale deployment of beacons – Bluetooth devices which can send offers to consumers whilst they shop – have been constrained, as research author, Lauren Foye explains how beacons enable retailers to collect valuable and relevant data points: “For retailers one of the major tools is knowing their customers. Tracking user movements in store via beacons allows for targeted marketing and offers, this can also aid in providing invaluable data and statistics to a company, this then later applied to drive sales.”

Read the full report here

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Industry Spotlight, Detego: Why omnichannel is ‘everything’ in fashion retail…

It’s clear that omnichannel is key to winning customers in fashion retail and, now more than ever, retail bosses need to be fully aware of customer behaviours both in-store and online – how they move from page to page and view each item; the most popular product categories; the average length of time spent shopping, and so forth.

The concept of omnichannel can be seen as both a huge opportunity and an immense challenge for retailers. For some, it can be experienced as an ‘unrealised dream’ in today’s intensely competitive market. The technology readily available and brick-and-mortar stores can acquire ‘real-time data’ on stock, but how can retailers introduce a beneficial strategy to reap the rewards?

 

Implementing a successful omnichannel strategy

Essentially, to successfully implement a truly omnichannel strategy you need high quality real-time data analysis and smart merchandise management on the single item level, to ensure the consumer follows-through on a desired purchase.

You need to be able to map your customer’s journey, to fully understand how and why they might reach out to browse or buy on different channels at different times.

If you can anticipate and map out the typical customer journey, then you are far more likely to convert to a sale, whether in store or online.

Click & Collect is all well and good, but you need to deliver. Too many consumers have been let down by major retailers over the last few years, due to poor stock control and inventory management. Which is exactly why retailers now need to connect, integrate and bridge their customer experiences online and offline to deliver the seamless omnichannel customer experience today´s consumers expect.

You need to offer real-world personalised customer experiences that create engagement through both in-store and digital means and that can also transform an in-store experience with special touches – such as smart fitting rooms, for example.

The key is in deploying technology that will help you to view and manage your stock inventory in real-time, without having to completely rehaul all of your entire technology systems.

Based on Detego’s proven software suite for business intelligence, which is on the edge of technological advances also in terms of hands-free infrastructure, the solution was deployed in a very short time frame. The fast implementation and deployment was underpinned by a lean and agile approach to immediately realize the aimed business benefits for Denimwall Inc.

We helped to achieve their goals using a variety of technologies to compliment their business vision. A full automated, hands-free RFID ceiling reader system combined with real-time analytics software gave them item level visibility on their garments, plus a mobile application that integrated with our existing retail system all worked together to help them achieve one phase of their overall onmichannel vision.

This is a great example of how an onmichannel vision should be implemented and what it means to deliver stock control for a connected and efficient retail operation. Retailers need to consider a number of elements to achieve this.

First, item-level visibility in real-time and full awareness of the in-store customer is absolutely crucial. How they move and interact with items, where they linger, and what goes into a fitting room with what, in addition to awareness of the online customer – and integration between the two.

Second, implementing predictive analytics can bring a personal shopper experience to each customer whether on the premises or off.

Thirdly, a mapped customer journey helps retailers understand how and why a customer might reach out on different channels at different times.

Last but not least, providing real-world personalised customer experiences can create engagement through digital means and transform an in-store experience with special touches – like smart fitting rooms.

With these elements in place a retailer can automatically collect data about their merchandise, provide accurate inventory information and real-time transparency. Al mobile, 24-7 and hands-free, no matter the size of the operation.

What does this mean? It means that the customer experience is amazing. They find something – in store, online or on a mobile app – and then they can buy and collect it as soon as they want.

And fashion retailers know that customer experience is everything. You can offer the best choice of products via multiple channels. But if you cannot deliver, the customer moves on. Very quickly!

 

Words by Uwe Hennig, CEO at Detego