Retail Landscape

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Part
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Retail - Innovative companies in sportswear and apparel retail.

The most innovative companies in sportswear and apparel retail are Amazon, Bonobos, Stitch Fix, Adidas, and Nike. Over the next five years, apparel will continue to be the most popular e-commerce category in the United States. It is predicted that by 2022, 25% of the country’s malls will have shut down. By 2026, various platforms across both apparel retail and sportswear will have changed. The trends include a steep rise in mobile shopping (m-commerce), retail stores to pop-up in hotels, cars, and the consumer’s home, shopping help by using big data, customers becoming designers of their own apparel, and brands will launch new clothing lines all year long.
After an extensive search through industry reports and other trusted media sites, we found that there are no definitive lists of the most innovative sportswear and apparel retail companies. However, we found expert sites that listed the most innovative companies belonging to various industries. We reviewed each list to short-list companies that belong in the space of sportswear and apparel retail. With a thorough search, we have also compiled the trends that are expected to hit this market in the next 2 to 5 years and future trends expected to happen in the next 5 years and beyond.

Most innovative companies

1. Amazon:

According to LS Retail, Amazon is known to be a great disruptor of the retail space. Fast Company has named Amazon as the “most innovative company of 2017”. Amazon has been changing the retail industry platform over the past decade. The retail giant has always been in the process of finding new and improved ways to provide its customers with an experience characterized by convenience and speed. It was Amazon that succeeded in making one-day delivery as an industry standard and went on to create retail’s best loyalty programs. Currently, Amazon is expanding its physical presence in the form of pop-up stores and bookstores around the country. They have succeeded in launching Prime Wardrobe where their customers have the ability to feel, touch, and try on apparel before purchasing them.

2. Bonobos:

Bonobos has risen to the top with its innovative physical retail stores called “Guideshops”. They have numerous guideshops across the nation where customers can touch, feel, and try on the apparel of their choice before purchasing them. Customers make their order in-store, after which the items are shipped to them on the following day. This engaging and innovative model provides their customers with a unique shopping experience.

3. Stitch Fix:

This company has made shopping extremely convenient for their customers who lack the patience and the time to look for apparel in stores or online. Stitch Fix creates a detailed profile for their new customers which allows the company to determine the best style of clothing that would suit the customer within a specific budget.

4. Adidas:

This sportswear giant is a leader where customer experience is concerned. Adidas’ products, channels, and services are optimized with the focus on the “consumer-obsessed mindset”, according to Herbert Hainer, the company’s’ former CEO. Through the many years, Adidas has always been a front-runner in innovation by integrating its products and stores with the latest and advanced technology. The company has succeeded in creating brand desire and engagement with its customers. Over the past few years, Adidas has created “shoppable windows”, through which their consumers can view, browse, and shop for products when the store is closed. They have also incorporated body scanners into the customer’s shopping experience where one can try on apparel virtually. The retail giant has also introduced 3D-printed sneakers into their list of innovative products, thereby becoming a pioneer in customization of shoes. Adidas is primarily focused on making retail more engaging, personal, and convenient for its consumers.

5. Nike:

According to Nike’s North America communications director, Matthew Kneller, Nike focuses on energizing moments with distinctive products, experiences, and pop-up launches. The company works on combining the right ratio of “sport, creativity, style, and design” in order to provide their customers with “pinnacle innovative experiences”. The company launched its “Sneakeasy” event series in New York, Chicago, Toronto, and Los Angeles, featuring Nike-inspired art and experiences in 2017. Through the series, Nike showcased their latest limited-edition designs. Nike is also known for integrating the latest technology into its products, like power-lacing sneakers.

Current Trends

— Retail stores are undergoing a transformation to attract and expand their consumer base by incorporating the latest technology. In-store experiences are the current focus where numerous brands are incorporating smart dressing rooms, personal shoppers, and a more engaging showroom.

— Innovative companies like Nike are pushing the boundary in combining technology and products like custom-lacing Hyper Adapt sneakers.

— Companies are also using analytics (historical data+current trends) to decide which products to purchase and distribute.

— Companies are utilizing social media to promote and increase brand awareness.

Trends in the next 5 years

— Apparel is currently the most popular e-commerce category in the United States. In the next 5 years, online apparel and accessories will continue to dominate the retail industry.

— The sale of apparel and accessories are predicted to rise to $116.3 billion in the year 2021 and $123.4 billion in the year 2022.

— According to Credit Suisse, a global financial service company, 25% of malls in the United States is predicted to shut down by the year 2022, due to the increase in e-commerce shopping.

Trends beyond the next 5 years

— According to Elle, by 2026, concept shopping called m-commerce (mobile commerce) is predicted to rise, where customers will use their smartphones as the primary means of shopping online. Christina Mercando, the founder of Ringly, believes in trying on apparel in-store, make the purchase on the smartphone, and have the items delivered by the time one reaches home.

— Retailers will continue to change the platform of their physical presence where they will strive to provide something unique and complementary to its e-commerce stores. Brands that become successful in 2026 will probably engage in unconventional physical stores like retail being combined with Airbnbs and Ubers, according to Matthias Metternich, the CEO, and founder of Cocodune. It is also predicted that brands will take their merchandise to the customer’s home where they can try on the items at ease.

Big Data will also play a large role in the future of apparel and sportswear retail. It is predicted that Big Data will be able to anticipate the exact needs and style that a customer would want to buy.

— Customers will take the forefront in terms of apparel design with brands. The relationship between apparel brands and consumers is predicted to become very engaging in a way where the consumers can design (personalized products) their own garments based on personal preferences. According to Ivan Poupyrev, the technical project lead of Google’s ATAP, in 2026, people would download designs on their computers and then print them out using 3D printers at the comfort of their homes.

— E-commerce apparel sales are predicted to rise from the current 17% of overall transactions to 35.7% during the next 15 years.

— Fast-fashion and off-price retail amount to 20% of today’s apparel industry sales which is projected to rise to 30% over the next decade.

Athleisure, which is a combination of athletic wear and business casual, is a new category of apparel that has attracted numerous people in the United States. According to Todd Snyder, J.Crew’s former head of menswear, predicts that athleisure “is not going to go away for at least 10 years”. This category of apparel might be symbolic of the larger cultural trends in the country which includes the ever-increasing focus on fitness and health.

— It is predicted that “the future of fashion will be seasonless” where brands will be able to create products that will stand out as a single release.

By 2026, customers will look for the entire shopping experience to be seamless across the numerous connected devices. They will expect convenience and speed to be the characteristics of focus.

— In the future, augmented reality will be a primary aspect that will take over virtual reality and will hold an important place in retail.

Conclusion

To wrap up, the most innovative companies in apparel and sportswear retail are Amazon, Bonobos, Stitch Fix, Adidas, and Nike. The trends over the next 5 years include the continued dominance of apparel in e-commerce shopping and the reduction in the country’s shopping malls by 25%. In 2026, the trends to look out for are increased shopping through smartphones, pop-up retail stores in cars, hotels, and consumers’ homes, seasonless fashion, customers becoming designers, and shopping with the help of big data.
Part
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Part
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Retail - Consumer Habits

Today's consumer shopping habits conversation is centered on the shift from brick and mortar stores to e-commerce and online shopping. In addition, Millennials are driving a significant amount of the change in consumer behaviors and shopping decisions. Despite the growth of ecommerce, consumers are still shopping brick-and-mortar in large numbers; they key shift is that consumers are choosing each channel for different reasons. You'll find a deep dive of my research below.

Shopping habits

One notable change in consumer shopping behavior is what consumers are spending money on. For example, consumers spent very little on mobile phones even 10 years ago compared with today. Now, consumers, and especially millennials, don't prioritize items they use to, such as clothing, and are now prioritizing spending on technology items like phones. They're also spending more on necessities, like health care and organic food.

Another big shift is of course is that retail has moved online, and not just for making purchases. Consumers are increasingly using the internet, and even their mobile devices, to research products, get recommendations, find and navigate to brick-and-mortar stores, and even enhance their in-store experience, all in addition to actually making purchases online. Consumers are demanding that brick-and-mortar stores and integrating with an online and mobile experience. When consumers do choose to shop in brick-and-mortar stores, it's generally to experience something that's missing from ecommerce.

shopping decisions

As I mentioned above, one change in consumer decision-making is what they're choosing to spend money on and which items they're prioritizing over others. Another shift is in the quality of certain items. Consumers, and especially millennials, are increasingly becoming "conscious" consumers. For example, they're increasingly choosing organic food over conventional based on claims that it is better for health or better for the environment. Similarly, they're increasingly choosing more eco-friendly products, like clothing and household cleaners.

In addition, millennials invented the sharing economy and actively participate in it, choosing to share goods and services rather than purchase their own. Moreover, they frequently purchase thrift and secondhand items rather than buying new, driven both by cost-savings and environmental awareness. The secondhand apparel market is already worth $18 billion and is projected to grow by 11% through 2021. Moreover, "The women who have the highest likelihood of shopping for secondhand clothes are women over 65 and women 18-24. Both groups are motivated by the savings but the younger consumers are almost 2.5 times more likely to be motivated by environmental consciousness when shopping for secondhand clothes."

Another change in consumer decision-making being driven by the millennial generation is that they make choices based on their lifestyle preferences. To elaborate, they would rather spend money on experiences than things, or on things that enrich their lifestyle, such as the latest technology. Household spending on mobile phone service has increased dramatically in the past few years, even though incomes haven't changed, showing that consumers are diverting more of their money to this service. They're prioritizing spending on these categories over traditional material goods like clothing and cars.

Another change in consumer decision-making around retail purchases is that brand loyalty as a phenomenon has decreased. In general, consumers are no longer loyal to specific stores or brands. For example, the average household shops at an average of six different grocery stores. This trend has been driven by the wide variety of options available to consumers with the growth of online retail, as well as by high levels of consumer education.

Finally, the process by which consumers make shopping decisions has shifted. The modern consumer relies heavily on peer recommendations, particularly from social media and other online sources. Moreover, they're likely to research a product extensively before buying. They may even shop around online for a good price while also going into a brick-and-mortar store to see and feel the product before making a purchase. While in-store, they may also be comparing reviews and prices of products online using their mobile phone. This is a shift from the historical pattern in retail, in which a consumer's journey might involve some word-of-mouth recommendations, or print advertising, but otherwise would simply involve a visit to a store during which they might consult with a sales associate before making an in-store purchase.

brick & Mortar vs. online

While online retail has seen massive growth over the last several years, the majority of retail purchases worldwide still take place in brick-and-mortar stores, with ecommerce only accounting for 10% of global retail sales. Despite Amazon's massive success, it isn't even in the top five retailers globally and certainly can't outstrip Wal-mart. That said, ecommerce continues to grow rapidly, increasing at four times the rate of other retail sales, with double digit growth projected through 2021.

This study identifies the main reasons consumers choose online or brick-and-mortar shopping. For online shopping, the core motivators identified by consumers are:

- 24/7 availability
- Ability to compare prices
- Online sale/better prices
- To save time
- Convenience of not going to shops

Overall, these reasons focus primarily on convenience and cost-savings. To compare with brick-and-mortar, the main reasons consumers shop in-store are:

- Want to touch/feel/try the item
- Concerned products look different
- Delivery takes too long
- Shipping costs are too high
- Product too valuable to buy online
- Enjoy the experience of going to shops

There is more variety here in the motivations, but they still generally revolve around a unique aspect of brick-and-mortar shopping, such as the physicality of products or the experience of in-store shopping, or avoiding a unique aspect of ecommerce, such as shipping.

conclusion

To wrap up, today's consumer shopping habits conversation is centered on the shift from brick and mortar stores to e-commerce and online shopping. In addition, Millennials are driving a significant amount of the change in consumer behaviors and shopping decisions. Despite the growth of ecommerce, consumers are still shopping brick-and-mortar in large numbers; they key shift is that consumers are choosing each channel for different reasons.
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Retail - Successful retail firms

In spite of the explosive growth of e-commerce, traditional retailers have been successful in adapting and sustaining growth over the past ten years. Below, you will find a write up of four key success factors for brick and mortar retailers and examples of companies that champion them. Because the criteria for inclusion in this list are not specified besides being companies that have thrived over the past ten years, we have used revenues, longevity, and to determine candidates. All the retailers determined have been in the top ten based on revenues since 2008 and have shown adaptability in the face of e-commerce. The companies and their ratings in 2016, are Walmart (1), Costco (3), The Home Depot (4), Lowe's (9), and Best Buy (10).

Technological integration

Most traditional retailers have become omnichannel by incorporating e-commerce in their business model. Home Depot and Lowe's have been especially successful at transforming their stores into vital pieces of their e-commerce fulfillment network. Both companies provide home-improvement goods that are expensive to ship. To keep these costs low, customers can buy online, but come to the store to retrieve the product. Both companies also maintain an online inventory that shoppers can use to check for a certain item and eliminate their need to wait for an item to ship. In practice the hybrid model of companies with both an online and store presence have outperformed online-only stores. A great example of this hybridization is Walmart's partnership with Google Express, a grocery delivery and shopping service.

logistic expertise

Logistic expertise is all about having what the customer needs, where and when they need it. Walmart is the perfect example of logistic expertise. Its constant investment in improving its supply chain and its continued research in the field will keep the company competitive into the future. Companies with logistic expertise deliver far better profits per square foot than those that don't. The store of the future would be more like a showroom, where customers can come to inspect the item that they have already seen online. The traditional retailer can give them the opportunity to ask questions of a specialist and actually make sure the item is what they want before they purchase.

Maintaining loyalty

Many brick and mortar stores have managed to stay profitable because they offer a service that is impractical and difficult to provide online. Best Buy is the perfect example of this trend in their lead on electronic sales. Although Amazon offers cheaper, arguably more convenient electronics, Best Buy has pushed back with stellar customer service and in-store advice. Costco maintains loyalty through its membership program which is currently $60 per year. Paying the membership gives you access to a vast selection of high quality food and merchandise for competitive prices. The fee also ensures a level of fidelity to the store because of the sunk cost.

conversion rate

The conversion rate applies to all traditional retailers, not just the ones on the list. Even for companies that include an e-commerce option, traditional stores still provide the lion's share of their revenue. The conversion rate is the measure of the percentage of visitors make a purchase, and in a store it is much higher than on a website. Additionally, any store purchase is also more profitable because costs for shipping and handling eat into the margin. Walmart has made the most of this profitability and slashed its profit margins to stay competitive and maintain sales growth.

conclusion

E-commerce has grown to make up a large number of the purchases made by shoppers today, but traditional retailers have not been left behind. Their incorporation of technology and online shopping, their logistic expertise, their ability to provide services impossible online, and the greater profitability of stores due to saved costs all make brick and mortar retailers unlikely to go bankrupt anytime soon.
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Retail Landscape - USA

The retail landscape of the United States has evolved, and there is a major shift toward online retail, which accounts for over $300 billion of total retail revenue. The revenue of the industry was $4.82 trillion in 2016 and is projected to rise to $5.48 trillion by 2020. Malls, chain stores, and clothing and apparel stores have closed most of their stores as a result of the shift towards online sales, but bar and restaurants still have considerable growth in the retail market.

GROWTH
The retail landscape in the United States has grown and is expected to continue growing. Retail sales month-over-month (MoM) averaged 0.36% from the year 1992 to 2017 and reached a record low of -3.7% in October 2008 and a record high of 6.7% in October 2001. In December 2017, the MoM retail trade increased by 0.4%, and this was as a result of an increase in sales of building and gardening material, food and beverages, motor vehicle parts, furniture, general merchandise, and health and personal care products.

The retail landscape has also grown in terms of revenue. In 2012, the total retail sales in the United States was $4.35 trillion, and this increased to $4.53 trillion in 2013 and $4.63 trillion in 2014. It kept increasing to $4.70 trillion in 2015 and $4.82 trillion in 2016 and is projected that the total retail sales will reach $5.16 trillion in 2018 and $5.48 trillion in 2020.

SIZE
In 2017, the size of the retail market in the United States was $4.99 trillion. The U.S. leads in the retail industry in the world, and five out of the ten leading retailers in the world come from the U.S. In 2015, the U.S. retail industry employed 15.7 million people. Different businesses make varied contributions to the total retail sales in the United States. Motor vehicle and parts dealers contribute to 20% of the sales, food and beverage stores contribute 13%, general merchandise stores 12.5%, and drinking places and food services contribute 11%. Other important contributors to the total retail sales include convenience stores at 10%, non-store retailers at 9.2%, garden and building material dealers at 6%, clothing and accessories stores at 5%, and furniture stores at 2%.

FORMS AND TRENDS
There has been an increase in the number of online stores and a decline in brick and mortar retail. The common forms of retailers are malls, apparel and clothing stores, specialty stores, general stores, and restaurants and bars. America has about 1,200 malls, and they are likely to reduce to 900 in a decade as more people shift to online shopping. From 2010 to 2013, the visit to malls declined by 50%, and they have kept falling since then. Retail bankruptcies in 2016 and part of 2017 resulted in the closure of several stores. J.C. Penney, Macy's, Sears, and RadioShack announced the closure of over 100 stores. 16 chain stores accounted for about 50% of all store closings and five companies that include Payless, Rue21, Sears Holdings, and Ascena Retail accounted for 28.1% of the closures. Clothing and apparel stores have declined as consumers shift their spending to dining out and traveling. Apparel retailers have already closed 3,137 stores.

Restaurants, airlines, and food places have experienced a rise in sales. Since the year 2010, domestic airlines have flown more passengers every year and set a record of 823 million passengers in 2016. Occupancy in hotels has increased, and since 2005, sales at food and drinking places has grown twice as much compared to all other sectors of retail. In 2016, American consumers spent more money in bars and restaurants compared to grocery stores.

SHIFT TOWARDS ONLINE RETAIL
People are purchasing more items online compared to the past decades. Mobile commerce grew from 2% in 2010 to 20% by 2017. Clothing, computers and consumer electronics contribute about one-third of online sales, and by 2022, online sales will make up 17% of total retail revenue. Today, online sales account for about $300 billion of total retail sales. The growth in online retail can be seen from the increase in purchases from Amazon. Between the year 2010 and 2016, the sales of Amazon in the United States increased from $16 billion to $80 billion.

In 2016, online retail sales increased faster compared to the previous three years. The online sales increased by 15.6% from $341.7 billion in 2015 to $394.86 billion in 2016. In 2016, online retail contributed to 11.7% of the total retail revenue compared to 10.5% in 2015. The increasing trust of customers on online retail has resulted in increasing purchases from Amazon. In 2016, American consumers bought items worth $147 billion from Amazon compared to $112 billion in the year 2015.

CONCLUSION
In conclusion, the retail landscape of the United States has evolved, and online retail now accounts for over $300 billion of total retail revenue. The revenue of the industry was $4.82 trillion in 2016 and is projected to rise to $5.48 trillion by 2020. Malls, chain stores, and clothing and apparel stores have closed most of their stores as a result of the shift towards online sales, but bar and restaurants still have considerable growth in the retail market.


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Retail Landscape - EMEA

After extensive research, we have determined that the retail industries in Europe, Middle East and Africa have all been exhibiting growth over the past few years. Primary drivers for this trend include the increased adaptation and familiarity for online retail, increased purchasing power, and increased investments from international retailers. Most common growth inhibitors within the regions include the lack of physical infrastructure for Africa, issues with terrorism and Brexit for Europe, and lower oil prices for the Middle East.

LIMITATIONS AND DELIMITATIONS

Due to the nature of this request which asks for historic changes in the retail landscape within the past few years, we decided to extend the scope of our research to cover sources dated beyond 24 months ago.

EUROPE

MARKET SIZE
The market size of the European retail market grew from €2,377,018,000 back in 2012 to €2,611,760,000 in 2017 at a CAGR of 1.9 percent. Retail in Western Europe performed significantly better than Eastern Europe, with the latter’s market size amounting to €565.5 billion in 2016. This growth was partly driven by the market value of retailing both in Germany and in France. Combined, the market size for both countries is equal to 50 percent of the whole of Western Europe. As of 2016, France has the largest retail market within the European region with a market size of €438 billion.
GROWTH INHIBITORS
According to a report by EuroCommerce, this growth would have risen further but was inhibited by issues such as terrorism within the region, the refugee crisis, Brexit, nationalist tendencies of government officials, and growing political tensions in Turkey.
The purchasing power of consumers within the EU-28 countries increased by 0.7 percent its value last year amounting to €16,153 per person. Back in 2014, this value averaged at around €15,400 per person. This trend is more prominent within Central and Eastern Europe.
Stationary retail in the entire European region declined by 0.4 percent between 2015 to 2016. However, if Great Britain was to be excluded from calculations, stationary retail among the rest of the countries actually grew by 1.7 percent. This growth trend was not so evident within Western and Southern Europe.
ONLINE RETAIL
According to a report by Ecommerce Europe, the turnover of e-commerce in Europe increased by 15 percent to €530 billion as of 2016. Analysts predict that this figure will rise to €602 billion by 2017 at a year-on-year growth of around 14 percent. The report states that back in 2010, only 67 percent of companies with more than 10 employees had an official website. Findings show that as of 2016, this figure grew to 76 percent. The adoption of online retail varies depending on the region. Findings show that Western Europe, with UK in the lead, is the most active in the e-commerce industry. However, Countries within Central and Eastern Europe exhibited the highest growth in terms of e-commerce sales in 2016.
OTHER KEY PERFORMANCE INDICATORS
The retail share of private consumption in Europe dropped to 31.3 percent in 2016 from 31.4 percent in 2015 and 31.1 percent in 2014. The inflation rate of Europe increased to 1.8 percent from around 0.25 percent back in 2015. Sales Area Productivity increased to 0.9 percent in Europe excluding Great Britain.

MIDDLE EAST

MARKET SIZE
According to an article published by Arabian Business, the overall market size of the retail industry in the Middle East/GCC region amounted to $250.5 billion as of 2016. Analysts forecast that this figure will grow to $313.2 billion by 2021. The main drivers of this trend were stated to be an anticipated rise in per capita income, tourism, and population. It was mentioned however that from 2017 to 2018, this growth will momentarily slow down driven by reduction in government spending and lower oil prices. It was also stated that retail sales in both Bahrain and Saudi Arabia were forecast to exhibit the highest growth within the time period.
TRANSITION
According to a 2014 report by IRCJCJournals, The retail industry in the Middle East was dominated by traditional family-run businesses. As of 2010, data shows that multinational retail businesses have started taking over traditional retail businesses. Examples of such businesses include Wal-Mart, Carr four Group, Sears, and K-Mart.
RETAIL SPACE
In terms of retail space, it was stated that the GCC will be expanding to a total of 18.6 million square meters by 2021—an increase of 6.2 million square meters from 2016.
ONLINE RETAIL
According to a 2017 report by PWC, the increase of monthly online customers in the GCC region rose from 23 percent back in 2013 to 29 percent in 2016. This is primarily driven by the increase in mobile users, secure platforms, and social customer engagement.

AFRICA

INFORMAL MARKET
There are no existing reports which clearly define the market size of the retail industry within African regions. This is because a huge portion of the industry is considered ‘informal’ and not properly documented. PWC States that 90 percent of sales from the retail industries of Sub-Saharan Africa is considered informal. This means that goods were sold through merchants, kiosks, and table-top vendors. This makes whatever existing data that could be collected very inaccurate and unreliable.

GROWTH TRENDS
According to a 2016 report by KPMG, the retail industry in Africa “ remains relatively underdeveloped at present”. Most of the shopping experience of customers within the region take place within traditional shops. The report mentions that a barrier that significantly hinders the development of the retail industry in Africa is the lack of physical infrastructure. Due to this, formal retailers are finding it difficult to establish modern shops and reliable networks. Another barrier is the fact that majority of the population of Africa, especially within Sub-Saharan Africa, has extremely low purchasing power.
In addition to this, Africa has also experienced volatile currencies, falling revenues, and falling commodity prices. Despite this lack of growth, experts remain positive about the retail industry in the region.

INDICATORS OF FUTURE GROWTH
Anton Hugo, Retail and Consumer Industry Leader of PwC Africa, stated that Africa has slowly been gaining recognition over the years as a good investment destination, making both retail and consumer goods more significant today. He also stated that Sub-Saharan Africa is one of the fastest-growing regions in the world primarily driven by the expansion of global and local retailers.

GROWTH DRIVERS
According to a report by PWC, the growing middle-class demographic of consumers in the region is also driving international retail expansion within African countries. This is because of the increasing preference for this demographic for more modernized consumption choices such as formal retail, car and property ownership, private healthcare, and internet use. Another factor driving this change in consumer behavior is the region’s improved access to more informative channels such as the internet. The report states that Africans are now more inclined to buy branded products and are also found to be more health-conscious.
Local production in Africa has also increased, further boosting local retail sales. This trend is driven primarily by government incentives for local manufacturing and political stability. Another driver of this trend includes the desire to circumvent transport costs, port delays, and import duties. Inhibitors of this trend include the cost of electricity, labor, and rent, and problems with power supply.
ONLINE RETAIL
The report by PWC states that despite the fact that the online retail industry in Sub-Saharan Africa has only recently started to develop, South Africa and Nigeria already have an economy of e-commerce players. It was also stated that the main barrier for the development of the online retail industry in Sub-Saharan Africa is the bad condition of internet within the region. Other barriers include challenges with logistics, distrust of transacting online, and low penetration of banks.

CONCLUSION

The retail industries in Europe, the Middle East, and Africa have all been exhibiting or have been showing signs of long-term growth. Primary drivers include increased access to the internet, more active foreign investments, and increased per capita income. Growth inhibitors include issues with terrorism, lower oil prices, and bad physical infrastructure.
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Retail Landscape - APAC

The retail landscape in the Asia Pacific has been growing in recent years and is on trend to continue to grow in coming years. Below is an overview of the current landscape, as well as changes and advances in technology that have attributed to the growth. Further, future estimations and trends have been included, to offer a holistic view of the growing industry in the region.

CURRENT LANDSCAPE

The current landscape of retail in the Asia Pacific is stronger, as it compares 2016 to 2010, and is expected to continue to grow in coming years. Retail grew at a CAGR of 13.63% from 2010 to 2016, the highest regional growth globally during that time period. In 2001, 11 economies (unnamed) had a combined retail sales total of roughly $1.0 trillion USD, which was only 41.9% of retail sales in the United States. Jumping ahead to 2016, those same 11 Asian economies had a combined retail sales total of $6.6 trillion USD, almost double what the United States reported ($3.9 trillion).


CHANGES ATTRIBUTING TO GROWTH

This large growth in retail sales can be attributed to a growth in disposable personal income in the region, which is estimated to have grown at an “average annual rate of 11.5% in China, 7.5% in India, 6.6% in Vietnam, and 5.7% in Malaysia”, from 2001 to 2016. Further, the size of the middle-class population in the Asia Pacific has expanded in recent years, as strong economic growth has declined the number of people living in poverty. The global middle-class population in the Asia Pacific is expected to rise to 66%, compared to only accounting for 28% of the global middle-class population in 2009. There has also been an increased ability for consumers in the Asia Pacific to acquire credit cards in recent years. In Q3 2016, China issued roughly 5.0 million credit cards, which is almost 2.8 times as many that were issued seven years prior. India is also experiencing a rise in credit, as personal loans “grew at an average annual rate of 17.9% between December 2009 and December 2016.”
ONLINE GROWTH SUCCESS
The success of online retailers (e.g. Amazon, Alibaba) has also created a rise in online retail sales in the region. In 2016, China reported $750.5 billion USD in online services and goods sale, a 26.2% increase compared to 2015. Additionally, increased millennial travel is attributing to the retail sales growth in the region. Not only do millennials like to travel, but they are also digitally savvy, and are contributing to the increase in e-commerce sales.

Retail sales in the Asia Pacific were projected to reach $9.254 trillion USD in 2017, with 14.7% of those retail sales stemming from e-commerce. In 2021, it is projected that e-commerce retail sales alone will reach $3.001 trillion USD, due to an increase in e-commerce platforms on everyday technology (e.g. smartphone, tablet). This will account for roughly 25% of overall retail sales in the region.

The growing trend of digital retail comes with its challenges, as many retailers are working to transform their current business strategy to account for e-commerce sales. In 2016, profit margins in the Asia Pacific were 2.6%, compared to 4.5% in 2010. Further, an increase in competition has contributed to declining profit margins.

Upcoming years

CONTINUED ONLINE GROWTH

Looking ahead to the future, online retail is expected to continue to grow. Currently, China is the biggest market for online retail sales, making up for almost 80% of online retail sales in the Asia Pacific region. By 2020, they are projected to become the first market to reach $1 trillion USD in online retail sales. As a whole, the Asian Pacific region is estimated to have 1/5 of all retail sales stemming from online channels by 2021. Further, an increase in smartphone compatibility and ease-of-use is expected to be a driver for e-commerce sales, and 79% of online retail sales are expected to come via smartphones by 2021.

Due to the rapid advance in technology, many retailers are working to create innovative sales and marketing campaigns in order to boost revenue. Many consumers are beginning to shop in an omnichannel fashion (e.g. they shop both on their smartphone, and in-store), so retailers are beginning to utilize in-store experience alongside social media platforms in order to further engage their audience. On average, an omnichannel shopper will spend 30% more on retail, compared to a single channel shopper.

Additionally, brick and mortar retail locations have begun to offer unique in-store experiences, in order to drive more in-store foot traffic. Starbucks has created a multi-sensory coffee experience within select stores in order to encourage consumers to visit.


CHALLENGES

Challenges in the region include competing against domestic companies that have extensive knowledge of the retail market. For example, Amazon is competing against Alibaba in China and is looking to instead expand into India to drive online sales, as Alibaba is dominating the market in China. Apple is having trouble competing with local companies in China that can create smartphones for much lower prices than an iPhone.

SUMMARY

The retail market in the Asia Pacific has grown in recent years, due to an increase in technological advances, as well as a growth in income among the middle-class population. Due to projected growth increases in disposable income, as well as further e-commerce capabilities, the online retail landscape in the Asia Pacific has grown in recent years. An increase in technological advances that have led to growing e-commerce and smartphone sales in the retail landscape is continuing to grow and is estimated to reach $3.001 trillion USD by 2021.
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Part
07

Retail Landscape - Global

MARKET STATISTICS

The global retail market is expected to reach $28 trillion by 2019. That equates to approximately $5.4 trillion more than the market’s $22.6 trillion 2015 revenue. The market has maintained an annual CAGR of 3.8% since 2008. China and the USA lead the market in both hyper and supermarkets, and the sector represents 35% of direct retail sales.

The ecommerce share of the market will peak at 29% in several countries. Although the segment has already grown rapidly, further growth potential is indicated. Consumers are using both PC-based and mobile platforms; however, mobile shopping continues its rapid growth. A CAGR of 23% in ecommerce is expected between 2012 and 2019. The number of e-consumers is expected to increase by 12%.

STATISTICAL TRENDS IN TECHNOLOGY

According to the International Data Corporations Worldwide Semiannual Augmented and Virtual Reality Spending Guide of March 2017, Western Europe was expected to spend $2.5 billion in 2017 in AR/VR, which is 131% more than in 2016. This statistic is consistent with consumer-driven demand for individualized and meaningful shopping experiences. According to Gartner’s customer experience report published in 2017, 89% of market experts are forecasting customer experience to be the leading factor in competitive advantage.

LEADING PLAYERS IN THE GLOBAL RETAIL MARKETS

A comparison of top retailer lists compiled by Forbes in 2018 and Investopedia in 2015 identifies the players positioned for continued success in the global retail market as Walmart, Home Depot, Target, Lowes, Amazon, Walgreens, Costco, Ebay, Kroger, Tesco, and Carrefour SA. These competitors have adapted to changing technologies and continue to roll out cutting edge, efficient, personalized experiences for consumers.

SHIFTING LANDSCAPES

The increasing shift in the landscape of the global retail market from the traditional brick and mortar shopping mall, department store, and stand-alone retailer to online and mobile shopping experiences has dominated the marketplace, particularly during the past decade. With the rise of digital channels and capabilities, ecommerce has benefited most from this shift. In order to sustain growth in the industry, retailers will need to stay one step ahead of the evolving market.

Companies with physical locations will be competing for “the right physical space in the right location.” “The world’s mega-retail cities” will become the most sought-after market expansion projects for retailers. International brand expansion will drive retailers to focus on some of the best and most attractive cites, particularly those with a growing middle class base.
The rapid growth in ecommerce, both online and across mobile technologies, is forcing traditional merchants to revolutionize their approach to a meaningful shopping experience. Growing consumer trends are forcing retailers to rethink their promotional strategies. Companies will be required to consider remodeling and reconfiguring existing malls to create “rich retail experiences,” incorporating new technologies such as augmented and virtual reality and AI to make shopping experience memorable.

CREATING EXPERIENCES

Based on our research, the future of retail will involve creating personalized shopping experiences with individually custom-made approaches that equate into speed and convenience for the shopper. According to an article published by Deloitte regarding retail trends in 2018, retailers providing shoppers the ability to “build and customize” their products will flourish in the industry. Engaging the shopper in this fashion also provides for a more personalized and exciting shopping experience.
Convenience is also a major driver in the evolving retail industry. Retailers building shopping experiences around their customer’s individualized needs and interest will gain a competitive edge in the industry. Making “chore and cherish commodity” shopping easier will become a necessity in the current and future retail industry. Major competitors, such as Amazon have incorporated subscription services enabling auto-renewal, one-click ordering, and same day delivery to meet rising convenience demands.

FUTURE TECHNOLOGY

According to a December 2017 article in Forbes, advances in digital technology and artificial intelligence will bring retail shopping to a whole new level. Implementation of facial recognition technology will completely alter the shopping experience. Imagine a personalized shopping experience magically appearing just by looking at your computer or on a mobile device. Incorporating automated functions like chat boxes,robotics, and autofill will streamline the ordering and delivery processes. In order to appeal to diverse market segments, retailers will need to increase social media advertising efficiency.

CONCLUSION

Wrapping up, the retail landscape has been dominated by a shift from brick and mortart stores to ecommerce platforms over the past decade primarily due to a rise in digitization in the marketplace. Retailers will need to focus on provisiong meaningful, convenient, and personalized shopping experiences in order to stay competitive and maintain growth.

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Part
08

Retail - Social Media

Major Retailers and Social Media Use

Major U.S. retailers like Target, Walmart, and Amazon have learned the power of social media platforms and wield it well with a variety of strategies. Top uses on platforms such as Facebook, Twitter, and Instagram include real-time customer service and niche campaigning of products. Photos and videos depicting new products and their features, promoting specific products with DIY tutorials, and showing transparency in public relations issues are some of the most popular content shared by brands within social media.

Customer Service and Customer-Generated Content

Major retailers have embraced online customer interaction by establishing multiple avenues for customer service via Twitter and Facebook. Quick response times to customer messages and tweets seem to have a direct correlation to strong social media followings and return customers. Retailers also encourage customers to share their individual experiences with products using tagged photos, video reviews, and by connecting brand apps to customer social media accounts that generate posts when a purchase is made.

Interactive Campaigns

In an article on social media analytics site Rival IQ, an examination of Nike’s social media habits revealed that niche-focused social media “campaigns” provide significant boosts in brand interest, even over extended periods of time. Nike’s “#BelieveInMore” campaign featured strong imagery, video ads, and encouraged female customers to share their own moments of strength and athleticism. Nike’s strong social media presence continues to outperform all other brands in the athletic shoe market and the result has been a more connected and consistent customer base.

As of 2016, Macy's website received 1.3% of its traffic from "social networks, mostly through direct response advertisements that include a specific call to action." This company's strategy centers around targeting both current customers and individuals with similar characteristics. For example, during their holiday “Wish Writer” ad the company used "Facebook's audience tools to target those ads to like-minded viewers." When the company released their “Believe” ad in 2015, they targeted the ad to 20 million look-a-like and current customers. This resulted in "3 million views on Instagram" and an increase in positive sentiment toward the brand. Along with views, Macy's also calculates likes, comments, and shares, to measure the impact of their social media ad placements.

KEY CONTENT STRATEGIES of Major Retailers

Using studies and analyses by trusted marketing research sites and analytics such as WARC and Econsultancy, we have been able to identify several key strategies retailers use when generating content on social media. Providing concise, relevant messages and keeping up-to-date with trending topics and products is vital on any platform. Retailers focus on quick response times to customer service requests and other interactions.

Transparency during issues in the scope of public relations has proven valuable for retailers like Target. Recently, Target experienced a data breach, the CEO stepped down, and "an anonymous employee released a statement to Gawker expressing dismay at the company culture and direction." All of this has shaken the confidence that consumers previously had in Target.

To combat these concerns, Target addressed their partners, customers, clients, investors, and the business community on LinkedIn. The company's CMO, Jeff Jones, released a statement that acknowledged their shortcomings and assured the public that the company would move "forward with alacrity." Target's choice to post this message on LinkedIn fits with the target market of their message. LinkedIn is a base for professionals and Target wanted to make an appeal to the business community at large. This platform is also known to attract those with a longer attention span. This is likely due to the longer form nature of the posts on this site compared to bite-sized updates that are predominately featured on Twitter.

High-quality content and strong imagery take precedence over quantity of content, and different platforms are used for different types of content, with Twitter typically being the place for daily updates, Facebook and Twitter for customer service, and Pinterest, Instagram, and YouTube being more popular for sharing new products and accompanying tutorials.

OTHER RELEVANT STRATEGIES

Some retailers designate specific Twitter handles and accounts for different areas of retail (fashion, news, deals). An example of a brand that utilizes this tactic is Target. By segmenting their company's presence on Twitter they're able to hyper-target their consumers. It also prevents users from getting a slew of updates about topics that don't interest them. If they're interested in fashion and style they can follow @TargetStyle and if they're interested in deals they can follow @TargetDeals. This prevents users who only follow these segmented accounts from getting unnecessary updates from their other accounts like @TargetNews. By using segmentation they can also decrease the amount of unfollows since users are only getting information on subjects that interest them and nothing else. However, by still maintaining the main @Target account they're able to aggregate highlights from all of their accounts and offer a hub for those who want generalized updates.

Target also makes a point of focusing only on social media platforms that they find relevant to their customer base. They don't see value in using a popular social platform if it's not the right fit for the current and prospective consumers they're "trying to communicate with." For example, prior to the release of their Star Wars holiday merchandise, the company asked customers "to share their memories of the movies online, as well as using the in-store arena to spread excitement." This tactic focused on connecting with their audience authentically rather than on a particular social platform.

Nike has frequently made use of “mentions” on social media, using their connections to celebrities to promote the brand and other retailers invite popular social media personalities to “take over” their social media accounts from time to time, essentially providing content without having to create it themselves.

Related Case Studies

CONCLUSION

Major retailers have utilized and developed many ways to reach out to customers using a variety of social media tools. Streamlining the process in order to provide quality content and service to customers each day with photos, videos, and relevant messages have helped these popular brands continue to thrive at the top of the retail heap.
Part
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Part
09

Retail - Brick and Mortar vs E - commerce

Though a majority of American spending is still done in brick-and-mortar stores, e-commerce continues to grow and affect the sales of major brick-and-mortar retailers. The two main effects of the rise of e-commerce on brick-and-mortar stores are widespread store closures and shifts in the traditional brick-and-mortar business model. Based on consumer responses, brick-and-mortar stores will likely continue to thrive due to consumers’ preference for instant gratification over convenience.

THE overall EFFECTS OF E-COMMERCE

The findings of online shopping versus in-store shopping showed that brick-and-mortar stores are seemingly surviving the rise of e-commerce. But when looking at store closures, it is clear that e-commerce did have an impact on the overall retail industry. Between 2016 and 2017, hundreds of brick-and-mortar store closures were reported by major retailers. In 2017 alone, over 300 hundred retailers, including Payless, Rue21, and RadioShack, filed for bankruptcies. Many believe that these store closures are a direct result of the continued growth of the online retail giant Amazon. Over a seven-year span, Amazon sales have grown from $16 billion to $80 billion.
In response to the rise of retailers like Amazon, traditional brick-and-mortar stores have started to change their sales strategies. Retailers have started to try to increase their online presence to appeal to consumers while simultaneously closing stores. The total number of store closures equal was reportedly equal to about $70 billion in retail leases. Fortune reported that a total of 6,700 stores in the US closed in 2017, which beats the all-time high in 2008 when 6,163 US stores closed. Despite the store closures, US retail sales in-store are 10 times bigger than online retail sales.

FINDINGS

1. Growth and Prevalence

Compared to over a decade ago, e-commerce has grown significantly. Only 22 percent of Americans were shopping online in 2000. Sixteen years later, the Pew Research Center found that nearly 80 percent of Americans shop on the internet. Nearly half (43%) of those consumers shop online every week or several times a month.

Notably, it appears that many Americans still prefer to buy clothes from a physical store. Sixty-four percent of US consumers prefer to shop in brick-and-mortar stores. In fact, Forbes reports that both e-commerce and brick-and-mortar stores have experienced gains. Brick-and-mortar retailers that are seeing a rise in foot traffic are those that offer bargain prices. Stores such as Dollar Tree, Big Lots, and Marshall's are all seeing a rise in foot traffic. High-end retailers are also reporting a rise in traffic. Lord & Taylor, Saks, and Neiman Marcus have also reported that foot traffic has increased.
When it comes to holiday shopping, e-commerce is also expected to keep growing. The National Retail Federation estimated that holiday sales will continue to grow between 7 and 10 percent, while in-store sales will likely grow by only 3.6 percent. Shipments and deliveries have even seen a rise due to the growth of e-commerce. UPS reports having delivered more than 30 million packages per day during the holiday season of 2016.
Overall, the majority of shopping in America is done in stores. According to Forbes, 90 percent of consumer spending is done at brick-and-mortar stores. When comparing sales, in 2016, online sales only accounted for 7.8 percent of total US retail sales. Additionally, some brick-and-mortar retailers are reporting large sales numbers per sq. foot, representing major profits despite real estate costs. For instance, Apple reports $5,546 in sales per square foot while Generation Next Franchise reports $3,970 in sales per square foot.

2. Factors in growth
Consumer preference continues to push the growth of e-commerce. In December 2017, the Entrepreneur reported that 51 percent of Americans prefer to shop online while 49 percent preferred to shop in-store. Those who like to shop online enjoy the convenience. However, the survey shows that consumers still prefer to visit retailers in-person for the experience such as trying on clothes, testing products, and the social aspect.
When looking at online sales, consumers mainly shop for apparel and computers. The Washington Post reported that 17.2 percent of online spending was on apparel while 16 percent of spending went on personal computers and accessories. E-commerce has even grown into the grocery retailers. In 2015, the economy saw an increase in online grocery retailers. It was then that grocery stores were starting to see a loss in business as a result of online grocery retailers.

CONCLUSION

In summary, e-commerce continues to grow and gain shares in the retail industry. Despite the continued growth of e-commerce, brick-and-mortar retailers continue to thrive. According to Forbes, both online and brick-and-mortar retailers have seen gains in the past years. Even though brick-and-mortar stores continue to thrive, e-commerce has impacted major brick-and-mortar retailers within recent years. In 2017, over 300 retailers had plans to file for bankruptcy and over 6,000 stores closed. Though predictions expect this trend to continue, consumer responses indicate a preference for brick-and-mortar stores due to the need for instant gratification rather than convenience.
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Part
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Retail - Important Milestones and Successful customer experiences in Brick and Mortar stores

Overall, the biggest change brick-and-mortar stores have seen since the early 1900s is a shift in the use of technology for creating a more personalized, targeted, and customized shopping experience, which is what customers are demanding. This trend is expected to continue into the future as emerging technologies will allow the shopping experience to become even more personalized and customized, along with the addition of retailers offering certain types of bonuses and special offers to reward customers for shopping in-store.

We have relied on historical timelines, industry reports, consumer surveys, and trusted media sites in order to identify the important milestones, from the 1900s to the present day, which have shaped modern retail. In doing so, we have focused primarily around cultural and technological milestones. We have focused exclusively on brick-and-mortar developments, as opposed to e-commerce, since brick-and-mortar is your stated area of interest.

In addition to creating a customized timeline of milestones, we have also analyzed current and projected trends within this space to provide an understanding of which types of customer experiences are on the rise for brick-and-mortar stores.

Below, you will find a deep dive of our findings.

EARLY 1900'S-1950'S

DEPARTMENT STORES EMERGE
At the turn of the century, department stores were emerging, including Marshall Field's and Macy's. These stores resulted due to customers who were able to travel farther distances (thanks to railroads and refrigeration), and department stores thereby offered customers a wider range of products to choose from. Department stores offered convenience, a centralized location, were open longer, and offered more competitive prices.

SHOPPING MALLS EMERGE, CUSTOMER SERVICE IS A FOCUS, AND STORE CATALOGS OFFER A NEW WAY TO SHOP
Around the 1920s, shopping malls began to emerge. The very first 'shopping center' was located in Missouri. During this time, consumers were looking for a more personalized, customer-service oriented shopping experience, and the ability to pay for items easily. The 1920s also witnessed the emergence of the store catalog. In 1929, the first supermarket chains emerged.

THE INVENTION OF TELEVISION IMPACTS ADVERTISING, AND CONVENIENCE STORES EMERGE
In the 1940s, television broadcasting is invented, which eventually leads to the establishment of the television commercial. 7-11 becomes the first known 'convenience store.'

THE INVENTION OF THE COMPUTER PAVES THE WAY FOR THE FUTURE OF RETAIL, WHILE CREDIT CARDS AND INDOOR MALLS ARE EMERGING
During the 19050's, the first computer was invented, and credit cards were being used for the very first time. The first indoor regional-level mall is built in Minnesota.

1960'S-1970'S

DISCOUNT STORES EMERGE AND BAR-CODE SCANNERS ARE INVENTED
The very first Wal-Mart opens during the 1960's, which begins the next big wave in retail transformation -- the shift to discount stores.
In 1967, the first bar-code scanner is used for retail purposes by Kroger.

COMPUTER NETWORKING TECHNOLOGIES ARE INVENTED, WHICH TRANSFORM RETAIL OPERATIONS
In 1968, networking hardware and software is invented. In 1969, Wal-Mart becomes the first retailer to integrate a computer system into their business model, which allowed them to "set up an independent distribution system to gain the volume necessary for negotiating with suppliers, track inventory, and allow for just-in-time replenishment."

THE FIRST ATM MACHINE IS PUT INTO USE
In 1969, the first ATM was installed in New York.

ECONOMIC RECESSION ALTERS CONSUMER PRECEPTIONS TO DEMAND LOWER PRICES, AND MICROSOFT AND APPLE ARE FOUNDED.
In 1970s, the U.S. was facing an economic recession, the result of which was consumers demanding lower prices. In 1975, Microsoft is founded. In 1976, Apple is founded.

1980's

"CATEGORY KILLERS" AND CLUB STORES EMERGE, RETAIL STORES ARE MERGING, AND PERSONAL COMPUTERS BRING BUSINESSES ONLINE
In 1980, stores such as Toys 'R' Us, Circuit City and Sam's Club become popular shopping destinations. A lot of mergers and acquisitions are taking place in the retail space. A huge rise in the adaption of personal computers allows businesses to go online, and communicate via the web.

DEPARTMENT STORES MAKE A COMEBACK IN A MORE PERSONALIZED WAY
During the 80's, department stores were changing from a more consistent, one-size-fits all approach to a more personalized approach. Loyalty programs began to be utilized in order to provide a point of engagement for customers, and the traditional service model was re-imagined to focus more on "the customer's wants than how the monolith could fit into the customer's stated need."

1990'S

SPECIALTY STORES AND BIG BOX STORES EMERGE
During the 90's, lots of specialty stores emerged (e.g. stores exclusively dedicated to movie posters, stores exclusively dedicated to scents, etc.). This decade also introduced the 'box store,' a very large specialty store which offered a wide selection of items within a specific vertical, such as office supplies, or home improvement. These 'category killers' represented one-third of all revenues from retail in the U.S.

FOCUS ON BRANDING BECOMES THE NEW STRATEGY
During the later part of the 90s, heavy focus was being placed on the idea of promoting a store as a brand, which was seen as a strategic move.

2000-present

E-COMMERCE CHANGES THE WAY CUSTOMERS RESERACH PRODUCTS
Online shopping made it possible for customers to research products and read customer reviews instantly using the web.

E-COMMERCE CHANGES THE WAY BRICK-AND-MORTAR ASSOCIATES ENGAGE CUSTOMERS
In order to compete with online shopping, retailers in the new millennia focused on upgrading the environment of stores. Associates were trained to be more proactive about engaging with customers, and were required to be far more knowledgeable about products.

PERSONALIZED SERVICE GOES DIGITAL
In order to offer a more personalized form of service, B and M retailers encouraged customers to sign-up for loyalty programs and newsletters which would allow the store to communicate with the customer electronically, thus encouraging them to re-visit the store.

overall trends since the 1900s

Here is a high-level overview of how technology has altered retail over the last century:

1) Previously, customers had to interact with a salesperson to get product knowledge, however this is no longer the case thanks to modern technology.

2) Personalization used to be done on more of a one-on-one basis, however technology has allowed retailers of the modern age to "deliver personal, relevant suggestions at scale."

3) Today, people locate retail locations using their mobile devices, whereas previously, people had to rely on word-of-mouth, familiarity with an area, or happen upon a store by chance.

4) Within more recent times, brick and mortar stores have served as a location where customers could inspect merchandise in a physical way, which is an experience the internet could not offer. However, interactive video and 360 degree cameras are beginning to disrupt in this space.

TYPES OF EXPERIENCES ON THE RISE

Looking at the current and future landscapes, here are some types of experiences which are gaining popularity with customers:

1) AI will find many applications in brick-and-mortar retail, especially where customer service is concerned.

2) Customers will have more power with regard to "defining their shopping experience."

3) To lure customers into brick-and-mortar stores, many retailers are now offering free gifts with in-store purchases and special in-store-only discounts.

4) Seventy-eight percent of consumers report that an employees' knowledge of the retailers products is highly important.

5) RFID systems are becoming increasingly important to the in-store experience.

6) Cloud-based POS technology is seen as a way to provide better customer experiences.

7) "82% of shoppers expect wearables to enhance their in-store experience by notifying them of long lines and reminding them of promotions."

8) AR/VR technologies are expected to drastically alter the way customers are able to experience products.

9) Retailers are offering classes, celebrity meet-and-greets, and personalized services such as wine tastings and make-overs to bring customers in-store.

conclusion

In closing, we have provided an overview of the important milestones in brick-and-mortar retail since the early 1900s, and have also provided an overview of rising trends with regard to the customer experience in brick-and-mortar stores.
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Part
11

Retail - Trends

Key trends emerging in the retail industry include an importance surrounding personalization and technology as it relates to reaching consumers on a meaningful level. Those trends are incorporated into both brick and mortar stores, as well as online with e-commerce. Upcoming trends in 2018 and trends that have been successful and will continue in the following year for the retail industry in the United States are as follows: Personalization, Robotics, Voice Activated Shopping, Experiential Marketing, Collaboration, Mobile Payments, Mobile Commerce, and Augmented Reality.

Brick and Mortar vs. E-Commerce

Forbes.com describes the different predictions of trends for brick and mortar and e-commerce retailers. With the closing and bankruptcies of many brick and mortar retailers in 2017, known as the Retail Apocalypse, stores are creating personalized and experiential shopping and driving promotions to bring the customer into the store in person. E-commerce trends are focusing on autonomous shopping and ease of shopping from the comfort of home or on-the-go in today's mobile and fast paced world. SmallBizTrends.com reports that, although the e-commerce surge of 2017 is strong, "Customer experience, product transparency, curated collections, mobile payments and Voice search (Alexa-enabled devices) are predicted to be key trends for the Brick and Mortar Retailers."

1. Personalization

Personalization is a trend that has been growing since last year and is key to the retail industry going forward. The trend of personalization is leveraged by allowing the customer to build a unique and customized product, leveling up the consumer experience down to the niche detail of a product. Dresden, a retailer of eye healthcare and aware products, "lets shoppers create their own pairs of sunglasses by enabling them to interchange the lenses and frame parts (which come in a variety of colors and sizes)," reports VendHQ.com.

2. Robotics

Robotics trends, especially in the form of AI, have been helping retailers for several years now. In the next year, robotics will be used in retail for driving autonomy and fast accuracy in the form of packing goods and consumer facing AI, such as those used in Chatbot, SMS Apps, and What's App. Medium.com shows examples of how Robotics are being used to enhance the retail shopping experience in both brick and mortar stores and e-commerce, "Walmart is testing retail robots for shelf-scanning and cleaning quite aggressively. JD.com has invested in retail automation of the E-commerce warehouses that may be ahead of the likes of Amazon and Alibaba. Drone delivery is increasingly becoming an option."

3. Voice Activated Shopping

A trend of the future in the retail industry is Voice Activated Shopping, which aims to leverage smart electronics, such as Amazon's Alexa and other smart speakers. Medium.com describes the trends in Voice Activated Shopping coming from Amazon and Google, "In fact with regards to retail and advertising, Amazon is likely to out-duel Google in the future of Voice-AI and voice mediated spending. This is because while Alexa skills have a direct utility and wake-words, Google Home excels rather in logistics and integration with the likes of Google Maps. There’s no real competing with 30,000 Alexa Skills."

4. Experiential Marketing

Experiential Marketing is a retail trend placing the focus on creating a unique and memorable brand experience for consumers. This trend is especially incorporated into the customer experience while visiting brick and mortar retailers. Medium.com describes experiential marketing for the in-person customer, "offline experiences are those “analog tech” nuances that build retention and grow brand trust. Many of these “offline experiences” will also be about how data and AI is used to collect and re-target customers in new ways. What is an experience in the digital age? It’s a cluster of how a brand reaches you; and data-driven approaches that are immersive is the key. But these can also occur in-person, and retailers are learning how in 2018."

5. Consolidations, Mergers, Collaborations

Consolidations, Mergers, and Collaborations between different retailers is an industry trend that is expected to increase over the next year. Examples of partnerships that brought excitement to consumers last year are North Face with designer Junya Watanabe, IKEA's acquisition of TaskRabbit, and Supreme with Louis Vuitton. Additionally, Medium.com reports, "Amazon acquiring Whole Foods and Walmart scooping up fashion retail startups was just the beginning in the sector."

6. Mobile Payments

Mobile Payments are rising. Walmart Pay, Amazon Pay, and soon cryptocurrencies are expected to accelerate and will soon give way to Cashless economy. QR codes are also making a comeback. Medium.com reports that mobile payment trends in the retail industry in Asia are showing signs of prosperity in the United States and globally, "where China is already cashless in thanks to WeChat Pay and Alipay, the rest of the world is catching up with the likes of Walmart Pay, Amazon Pay, Apple Pay and soon payments in terms of cryptocurrencies."

7. Mobile Commerce

Mobile Commerce with social media has changed the way retailers interact with their consumers in recent years. Social media companies such as Instagram, Pinterest, and Facebook are being used by retailers to engage fans and consumers. The industry trend allows consumers to engage in fast, remote shopping, reducing the need for brick and mortar and making e-commerce more appealing to customers who place importance on convenience.

8. Augmented Reality


Augmented Reality is a new trend moving forward in the retail industry. Companies such as Apple, Google, Facebook and others are racing to become a dominant AR channel for consumers. Shopify.com writes, "reports even show that over 70 percent of buyers would be more loyal to brands who incorporate AR as part of their shopping experience, as Rachel Jacobs, head of content and partnerships at Pixc, points out." Apple is planning for release of their ARKit, a product that incorporates an AR experience for shoppers and allows the customer to "try-before-you-buy" products and services from retailers.

CONCLUSION

To wrap up, 2018 trends in the retail industry are centered around technology and electronics with robotics and AI interactions, as well as customized experiences for the consumer in both e-commerce and brick and mortal establishments. Current trends in the retail industry in the United States are as follows: Personalization, Robotics, Voice Activated Shopping, Experiential Marketing, Collaboration, Mobile Payments, Mobile Commerce, and Augmented Reality. Future trends and successful continued trends from recent years are being incorporated into both brick and mortar stores and e-commerce in the retail industry.
Part
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Part
12

Retail - Top E - commerce firms integrating physical stores.

Amazon, Bonobos, Warby Parker, Birchbox, Harry’s, ModCloth, and M. Gemi are the top e-commerce companies that have successfully integrated physical retail stores into their strategies or operations. Numerous online brands have been seen opening their own brick and mortar stores in the past year. Many have been successful in venturing into the platform of omni-channel retail and are taking full advantage of the $1,126.2 billion retail market in the United States.
To identify the top e-commerce companies in the United States that have successfully integrated physical retail stores into their strategies or operations, we reviewed industry reports, case studies, and other trusted media sites. We first compiled a list of the top e-commerce companies worldwide that meet the criteria of integrating physical retail stores with company operations. We then short-listed those that are based in the United States.

Overview

Although online shopping is convenient, consumers still believe that the best way to shop is to be able to visualize, feel, and try on the item before purchasing it. According to Credit Suisse, a brokerage firm, 8,600 stores were predicted to close during the year 2017 because they failed to modernize their business. Today, e-commerce companies are making sure to integrate their physical presence with apps, digital touch and brand host events like yoga classes and concerts, giving customers a unique shopping experience.
The following are the top e-commerce companies that have successfully integrated their physical retail stores into their strategies or operations.

1. Amazon

The Seattle-based company opened its first physical store in 2015 and has grown considerably with over a dozen bookstores and 465 Whole Foods stores. Amazon has seen a great opportunity in expanding its e-commerce business to include a physical presence in the retail market. It has successfully combined its tech prowess and huge digital presence with its physical stores. Amazon has installed Amazon Locker package pickup hubs at its Whole Foods stores and is also planning on merging its Prime membership program for consumers who shop at the local grocer. Currently, the company is working to test “physical grocery concepts” with an experimental store called Amazon Go and two AmazonFresh Pickup sites in Seattle. Amazon has also succeeded in opening pop-up stores in various malls around the United States, over the past few years. According to a report by the New York Times, Amazon is looking to expand its retail outlets to include furniture, electronics, and home appliances.

2. Bonobos

Bonobos has been known to be an e-commerce heavyweight in the line of men’s products. With their success in the online realm, company CEO, Andy Dunn, decided to experiment with brick-and-mortar retail stores after acquiring numerous requests from their customers. Due to the positive response they received, the company worked out a method to optimize their online store and in-store experience for their line of men’s clothing. They opened up a physical store called the “Guide Shop” where consumers would be able to make an appointment, try on the products, make an order online, and have their products delivered to them the following day. Their first physical store was established in Boston in 2012. Today, Bonobos has physical retail stores in 48 locations across the country where they provide their customers with a “vertically integrated shopping experience”. According to Forbes, this personalized service model of their physical stores has resulted in their sales per square foot to average $3,000, which is six times more than that of a national retailer.

3. Warby Parker

Warby Parker began their eyewear business in the year 2010 and has reached a peak showing its full potential in providing high-quality products at reasonable prices. The company experimented with pop-up stores around the country, providing their customers with the opportunity to feel and try on the glasses before purchasing them. Warby Parker’s current retail store is called “Class Trip” where a large yellow bus drives across the United States and stops at different locations to “set up shop”. The company has also successfully installed kiosks in various hotels with a concept they call “The Readery” where they have paired their vintage glasses with books from the same time period (the 1960s). Warby Parker launched its first physical retail store in New York, in 2013. They currently have over 50 stores across the country, valued at $1.2 billion.

4. Birchbox

Birchbox launched its first physical store in New York in 2014. The company originally delivers beauty boxes filled with various product samples in the means of acquiring subscribers to purchase the full-sized versions from its online store. They considered the factors of consumers opting to purchase beauty products in brick-and-mortar stores and decided to take advantage of this channel. Their physical store spans over two floors with sections for beauty and a nail salon. Their consumers have the opportunity to use their touchscreen devices to create customized versions of beauty boxes.

5. Harry’s

This is an online razor subscription e-commerce company. The company launched its first barber shop in New York where their barbers introduced their various products to customers. They also incorporated the use of digital apps that allowed their regular customers to have the same haircut every time they visited. This unique model was designed to tap into the experience economy where consumers chose to purchase experiences rather than products.

6. ModCloth

ModCloth opened its first all size-inclusive physical store in Austin in the year 2016, with a focus on providing their customers with a positive and all-inclusive shopping experience. The company first experimented with this inclusive retail concept during their “IRL Tour” that featured various pop-up stores across the United States. These physical stores enabled their customers and employees to interact directly and in turn helped the company acquire a larger consumer base. Their physical inclusive retail store is a combination of a traditional store and a showroom, giving their customers a unique shopping experience that tells a story. The store provides a wide variety of apparel and accompanies them with matching non-apparel items (eyewear, handbags, beauty products, home gifts, and jewelry). Here, customers get their measurements taken by the in-store “ModStylists” and can later enter the detailed into the company’s “Fit For Me” app to receive professional attire recommendations. Overall, the company has done a marvelous job is taking the shopping experience beyond regular to something unique.

7. M. Gemi

This custom shoe retailer has also succeeded in optimizing their online store with their physical retail business. This Italian custom shoe crafting business began as an e-commerce company providing consumers with customized products at reasonable rates. They launched their first physical store in New York City providing their customers with the ability to feel and try on their product before making their purchase. The products they purchase in-store are then delivered to them a few days later.

Conclusion

To wrap up, there are numerous e-commerce companies in the United States that have succeeded in launching physical stores to provide a unique and satisfying shopping experience to their consumers. We have compiled a list of the top seven e-commerce companies that have successfully integrated physical retail stores into their strategies or operations. The companies included in this list are Amazon, Bonobos, Warby Parker, Birchbox, Harry’s, ModCloth, and M. Gemi.

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