2014 ushered in a wave of major changes in retailing that will continue to shape commerce in the years ahead. Yet, many of the big stories and trends all come back to one core takeaway finds a new Walker Sands study: technology continues to shape the future of retail.
The second annual Future of Retail Study, from Walker Sands, analyzes how technology has forever changed consumer shopping habits and looks at the technology trends that retailers should be getting on their short- and long-term radars.
The survey of U.S. consumers on their online shopping habits will help retail technology companies anticipate consumer behavior in 2015 and beyond. Some of the biggest challenges faced by retailers today are noted here:
The current survey found that 28% of consumers shop online at least once per week, a 27% increase from a year ago. 68% of consumers now shop online at least once per month, compared to 62% in 2013. The findings indicate that consumers have become more comfortable ordering online and incorporating web purchases more frequently into their online shopping routines.
Amazon remains the go-to online shopping destination with 96% of consumers saying they have made a purchase on the e-commerce giant’s website in the past year. The preference for the Amazon experience is also clear when looking at some of the most popular product categories, including electronics, books, household goods and consumer packaged goods. Retailers, meanwhile, hold a clear advantage in clothing and specialty categories such as luxury items, sporting goods and office supplies.
In addition to shopping online more frequently and across more product categories, consumers have also become more willing to buy expensive items on the web without seeing them first. 76% of consumers now say they would spend more than $100 online on a product without seeing it first, up from 70% in 2013. And, nearly three times as many consumers (27% compared to 10%) would purchase a product costing more than $1,000 without seeing it first if free returns were offered.
While it might be tough for retailers to absorb the cost, says the report, as free returns rank as the No. 2 incentive for getting consumers to shop more online, up from No. 3 a year ago. Easier online returns (48%), confidence in payment security (51%), and same-day shipping (42%), are also all up in importance from 2013. Free shipping (83%) continues to be the top reason consumers say they would shop more online.
40% of consumers say they have used a mobile payment application in the past year, says the report, up from just 8% in 2013. Among those who have used mobile payments in the past year, 45% have used Google Wallet, 41% have used a banking payment app such as Chase QuickPay, and one third have used a retailer payment app such as Starbucks.
While only 4% of survey respondents have tried Apple Pay in the past year, 18% of consumers say the introduction of Apple Pay makes them more likely to make a purchase on their phone in the near future. The number jumps to 36% when looking only at Apple smartphone owners, but even 16% of Windows phone owners and 8% of Android owners say the introduction of Apple Pay makes them more likely to pay with their phones.
Although Apple has the potential to help mobile payments go mainstream in 2015 by raising awareness and setting industry standards, the transition might not be smooth. Apple, and other leaders in the mobile payment space, will need to overcome several consumer concerns before smartphone payments compete with the convenience of credit cards. Currently, only 20% of consumers have no hesitation about using mobile payment service
Some additional key findings found in the report:
The shift to mobile payments has accelerated over the past year, with Apple Pay raising awareness and increasing consumer willingness to use smartphones at the point of sale.
Emerging technology, such as drones and virtual reality, will bring new opportunities and challenges for retailers.
As we move into 2015, the future of retail will continue to come into sharper focus. While there’s no telling what surprises this year will bring, the findings of this year’s Walker Sands’ Future of Retail Study provide insights into consumer shopping behavior that retailers can use to shape their strategy and investments for years to come, concludes the report.
For more detail from the report, including charts and graphs, please visit Walker Sands here.