The Top 10 Trends for Retail and E-commerce in 2017

By Hana Krijestorac Published on May. 16, 2018

1. E-commerce

In 2016, it was reported that 51% of shoppers preferred to shop online. E-commerce is growing 23% year-over-year, yet 46% of American small businesses do not have a website. At the same time, younger customers, such as millennials and Generation Z customers, are seeking physical stores where they are able to try on products rather than simply relying on e-commerce sites; however, shopping often begins with an online search before consumers even step into a store.

Customers, specifically millennials, are more likely to buy more in-store rather than online because of impulse buys, so tailoring the customer experience to include more tactile and interactive measures can potentially be a problem for e-commerce sites. Certain brands, such as Warby Parker and Bonobos, are noticing this trend and are adopting the strategy of creating physical stores to accompany e-commerce sites. As it stands, the majority of shopping begins online; $385 billion of US retail sales in 2017 are bought exclusively online, $1,677b are online-influenced, and $1,506 billion is offline (according to Forrester). As a result, customers are demanding a single platform to fit all of their needs, including simple checkout systems.

E-commerce retailers need to find platforms that are able to service the online shopper without any issues, such as complicated checkout procedures. At the same time, customers are demanding a seamless shopping experience that is highly correlated with efficient supply chain, logistics, and inventory management.

2. In-Store Customer Engagement

As e-commerce and digital platforms become increasingly popular, customers’ expectations as to what a good customer experience is becoming more stringent. Retailers need to focus on what is going on within the store rather than focus on beating competition within e-commerce.

At the same time, it is difficult for brick and mortar retailers to gather information on customers if they are only interacting with them a couple of times per year (usually through transactions). 0.56 of every dollar spent within a store is through digital interaction with a digital device (desktops, tablets, mobile payment devices, kiosks).

In addition, 93% of consumers report using a digital device to browse and research. Retailers need tech that is able to gather information on customer preferences and can better personalize the in-store experience, as opposed to sites like Pinterest which can personalize the online shopper experience in a just a few hours. Retailers like Wal-Mart and Target realized this and implemented in-store digital kiosks to give real-time inventory and product information, similar to how Apple stores provide iPads as another customer service channel.

Focusing on experience allows customers to “try on” a kind of digital experience rather than just a piece of clothing. For example, retailers that are pioneering this change like Bonobos and Warby Parker, focus on e-commerce; however, they created guideshops where customers can come in and try on clothing.

These shops are simple, closet-like spaces that resemble a showroom. Retailers need to capture friction or inspiration moments within stores in order to increase conversion. In turn, better in-store customer engagement can help consumers better engage with brands and increase conversion and loyalty.

Interactive Mirrors

OakLabs is pioneering the smart mirror trend. These mirrors can be used to engage the customer, collect in-store data, and provide information on inventory. Prices and inventory are transparent on the internet but in-store customers have to go through a salesperson to get a different size or color. Interactive mirrors can tell potential buyers what types of items are available, as well as give recommendations based on what the user has selected by scanning RFID tags.


The use of augmented and virtual reality to be at the forefront of innovation within retail; this extends to the use of AR and VR with in-store customer engagement, virtual modelling, brand interaction, and advertising technology. A recent JDA software survey found that 26% of retailers surveyed said that AR that provides shoppers with a personalized shopping experience was at the top of their priority lists; however, the use of AR and VR have various applications within retail such as within advertising and in-store customer engagement. For example, Walmart uses VR in the form of training tutorials as a way to train employees.

3. Supply Chain Automation & Tracking

retail supply chain

As retailers are becoming increasingly omnichannel with the growth of e-commerce and mobile shopping, they need to synchronize and optimize their supply chain and inventory to better respond to customer demands in real-time. Generally speaking, better supply chain allows for better theft control, financial management, customer service, and product tracking.

Supply chain automation can help salespeople better respond to customer questions and improve, as 73% of consumers use multiple channels when shopping. This can help brick and mortar stores better compete with online-only stores. Better tech can also be used to track which products are popular and which are not. Many retailers believe that they face pressure to have same day or next day deliveries; however, focusing too much on free delivery could be costly as most customers are willing to pay for shipping.

In order to streamline the omnichannel experience, supply chain automation and tracking are becoming increasingly important, especially for big and international retailers with big warehouses and stores. Ultimately, there needs to be an organizational structure that supports omnichannel retail in order to boost profits.

4. Workforce Tech

As e-commerce threatens the brick and mortar type stores, retailers need to find a way to better the customer experience. One way to do that is through workforce technology, or technology that will better acquire, train, and equip in-store employees. This problem is exacerbated by the emergence of in-store automation, which threatens to kill 4 in 10 positions. 66% of customers would rather find items by themselves through a digital device than work with sales associates.

The Bureau of Labor Statistics reports that employment within retail industry has gone down by 6,100 jobs in the latest quarter while employment in online stores rose by 2900 last quarter. Retailers need to come up with innovative ways to educate their employees and help them to interact with customers better given that customers prefer less in-store sales associates.

This problem is exacerbated by the buying power of the millennial and generation-z type customers has increased, and as a result, are demanding a more interactive, engaging customer experience that can be revitalized by better training employees.

Tech used to equip employees to better analyze of retail and know what is available within stores is becoming increasingly important. According to Gallup, employee engagement is highly connected to positive business outcomes, thus better educating employees can help increase profits for retailers. In addition, workforce tech can also help retailers cut down on training and hiring time, as well as reduce turnover; ultimately, helping retailers reduce costs given the high turnover rate of the retail industry.

5. Community-Based Retail

According to RetailNext, community-based retail will help brick and mortar type stores stay competitive, similar to Lululemon’s use of yoga classes in-store or Williams Sonoma’s in-store cooking classes. Consumers are demanding a type of store that services a community and brings them together. Community-based retail invites customers to participate in culture rather than just buying merchandise.

Community-based retail also functions with data analytics, as retailers need to use data, especially social media data, to gather information on what a specific community wants. Again, this relates to the overarching trend of better customer engagement, particularly within the store. Consumers increasingly want to embody the brand and would occasionally rather buy an experience as compared to just an item. Ultimately, community-based retail helps create a space that is unique enough to stand on its own.

6. Data Analytics

As retailers transition into becoming omnichannel, data analytics tech needs to be able to understand and analyze omnichannel data. Retailers need to focus on cross-device analytics, online-to-store metrics, and cross-channel analytics in order to see how customers interact with brands both online and in-store.

Examples of new metrics to watch include understanding which items buyers purchase in-store or online, and whether or not they looked online before going to the store. This data can then be used to create predictive analytics given that tastes change so quickly due to the prevalence of social media.

Retailers should know demographics like gender, age, socio-economic class, location, search habits, and what kinds of products they tend to engage with. These should be tracked throughout multiple channels such as through TV, mobile searches, email, and display. About 40% of 100 merchandising professionals and merchandisers surveyed claimed that big data predictive analytics are on the top of their investment list.

The majority of responders also said that the retail industry is behind in terms of leveraging price and merchandising data as well as geographic and socio-economic data on customers in order to better target advertising and promotions.

Better data analytics can also help tailor advertising and in-store events that help the customer better engage with the community or brand. Retail is currently focused on pull marketing, or marketing that responds to trends, as opposed to pushing marketing which includes retailers pushing their trends onto the consumer; improvements within omnichannel data analytics will be key in effective pricing and promotion.

Heuristic data analysis can allow retailers to segment and identify customers better. Today, customers, especially millennials and generation Z type consumers, tend to focus on trends rather than ads. Retailers tend to focus on their own distinctive capabilities and should focus on outsourcing data analytics to other companies; this leaves room for startups to help fill that gap.

7. In-Store Analytics

Generally speaking, in-store data was somewhat of a black box until the recent development of in-store analytics technology. In-store analytics is becoming increasingly important within retail, given that customers are now demanding a better in-store experience.

Better in-store analytics includes tracking foot traffic, inventory, conversion, and analyzing which customers engage with brands and, how many pieces of clothing did the customer try on, which items did he/she pick up, etc. In turn, this allows retailers to better tailor the customer experience to someone’s personal preferences, as well as tapping into trends.

This also allows for better workforce tech, as in-store analytics can be used to help salespeople better respond to customer needs. In addition, retailers can use in-store analytics to better synchronize inventory between online and in-store inventory; this is often seen as a problem within omnichannel retail.

According to Netsuite, 27% of retailers are not able to identify customers when they’re standing in front of POS. Even with purchase history, companies rarely know how customers interact with items within the store. Sensor, wifi, and video technology can be used to solve this problem. Startups like Trax Retail and Bossa Nova are using robotics to automate the ability to analyze what is in-stock and if any items are mispriced.

8. Mobile

Mobile is increasingly becoming the “front door” of retail.

mobile ecommerce

In 2016, 37% of in-store retail sales are influenced by shopper’s use of a web-enabled mobile device. As Google puts it, retailers need to respond to “micro-moments” or when retailers respond in real-time to customer demands through a mobile device. Shifting to a mobile platform requires a good understanding of how to capture these micro-moments and capitalize on them.

Building easy to use mobile platforms with easy checkout procedures can help brick and mortar retailers adapt to an increasingly volatile industry. Google reports that mobile conversion rates have increased by 29% in the last year alone; this percentage is expected to grow. Similarly, those who use a mobile phone to shop spend twice as much on e-commerce as opposed to if they were not mobile.

The key is to make the mobile experience as quick, useful, and easy as possible since consumers will simply switch to another retailer. Mobile use within stores is generally categorized in the following ways: “I-want-to-know,” “I-want-to-go,” “I-want-to-do,” and “I-want-to-buy.” Therefore, the mobile interfaces need to be user-friendly. One of the biggest concerns for mobile users is efficient and easy checkout; Amazon’s one-click checkout option is something mobile developers should aspire to. Other problems include slow loading speed and security risks that are inherent with wifi-based mobile devices.

Retailers should collect data and anticipate what users will search for and then strategically provide search results for users based on this data. This can include price comparisons and interactive catalogues for both in-store and online purposes. Ultimately, making the online shopping experience as painless as possible is key in capturing the benefits to mobile devices within retail; those who used 4+ channels to shop increased conversion by 9%.

9. Brand Engagement

Brand awareness and engagement is mostly driven by mobile use. Google reports that more than half of smartphone users discover a new product or brand through the use of a mobile device, and brands can increase awareness by 46% by showing up in mobile search ad results. At the same time, brand engagement is highly correlated with in-store experiences, as customers are seeking more customization of products and personalization of the in-store experience. The use of brick and mortar type stores allow brands to better interact with local customers as well.

Fostering brand awareness is the largest problem for brands given that they lie within such a fragmented marketplace, and they’re looking to fill that gap through the use of digital devices. Going mobile, especially through the use of social media, can play a large role in revitalizing brick and mortar type stores through better loyalty and customer engagement.

10. Customization

Retailers like Nordstrom and Converse are among retailers that have created customization workshops within stores to not only better engage the consumer but also tap into the demand for more personalized products. The internet has fostered an increased demand for personalization and more niche stores.

This correlates to the digitization of in-store experiences and ultimately helps drive both conversion and loyalty. The “IKEA effect,” which involves the customer from start to finish can help increase brand engagement especially for millennials; 47% of people and 57% of millennials are willing to share data in exchange for personalization of the respective service.

Use of 3D printing and modelling using sensor technology are becoming increasingly popular and important for retailers to innovate. An example of this is Addidas’ use of 3d printing to cheaply create custom shoes through their German factory. Another example is ColourPop’s Qubit’s AI-based platform which allows for personalization of beauty brands that can also be used as a marketing and data analytics tool.

If you’re a startup interested in joining our world-class Retail accelerator, apply here. If you’re a corporation seeking innovation, join us here.