12 Trends That Will Cause Bricks and Mortar Retailers To Lose Sleep in 2012

December 15, 2011

It’s customary to look ahead at the retail trends that will shape 2012 and the buzz, profits and challenges to profitable retailing. Here then are the good, the bad, and the ugly...
1. Expect renewed interest in customer experience. Many brands, having come off of two successively better holidays than anticipated, will free more money to improve training for their employees.

2. At the same time, expect more technology to debut making employees into call centers with legs. From the fitting room to the kiosk to the smartphone, retailers will roll out technology fraught with unforeseen consequences that will give the impression of increased speed of service but build resentment in the employees. Here’s one example.

3. Suppliers and manufacturers will be squeezed even more to make a deal so expect more dating so that manufacturers can push more of their merch to the retailer, inhibiting their competitors from being able to do so later when the merchandise actually could sell. (Think toy stores here.)

4. More frustrated writers, looking to save a penny, will cover even more stories about how “deals” are the only way to get people to buy. This trend continues to ramp up with the perception that since everyone is offering them, they must be working. It's just that a lot of people are getting less creative and discounting even more.

5. Expect sales managers to put more pressure on the field sales force to deliver orders and expect more retailers to hold back. You can't just call on them with dollar signs in your eyes, you have to do a better job being a business partner.

6. Expect the popularity of social media of course to increase. This will allow many retailers to think it is just as important as their sales floor. Which it isn't. While F-commerce will get more buzz, the well-trained salesperson will still be the primary way to get the sale.

7. Expect luxury customers to continue to increase. Brands are status and products which make us feel important will continue to give us the illusion of safety in an increasingly complex world.

8. Expect more stalking by companies on the web who install cookies in your browser and continue to show you ads for something you may have only searched once for.

9. Expect increased retail vacancies as retailers, strapped for margin, give up. As mobile technology pulls the price down to online warehouses, costs for shipping the product to the store and from the store will be assumed to be eaten by the smaller retailers. Which they can’t.

10. Expect the hype around mobile to again be pitched as a great thing. Except that Amazon is the 800 pound gorilla in the room no matter how many points you virtually give a customer who “checks in,” no matter your fancy app, your “omnichannel strategy.” All of that falls by the wayside when your bricks and mortar boutique is made into Amazon’s showroom. Yes, we’ve had big boxes devour independents – now big boxes who have the most name brand product, have the potential of being devoured by Amazon.

11. Expect greater turnover at the top of larger retailers as investors become more vocal about poor performance and about those who haven’t turned it around to be given the boot.

12. Retail therapy will still be very much alive. The best retailers will realize the customers go to stores to meet interested and interesting employees who can help them ultimately feel smarter and better about themselves. Figuring out how to achieve that and deliver it again and again is the hard work they are committed to solving.

The best retailers will show the ultimate engagement of a customer is not a website, the palm of a customer’s hand, or an app, it is through the human being that has been carefully trained to deliver an exceptional experience.

The worst retailers will continue to come out with geewhiz technology that masks the hidden truth that fundamentally, they believe people are too hard to manage. Their marketing messages will be pinned on the house of cards deals.

It will be this fundamental difference between banking on technology or people that will make the difference in 2012.

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