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Retail Predictions: Six Big Trends to Watch in Blended Commerce

It's no longer about bricks-and-mortar versus digital. When it comes to the changing retail landscape, it's all about where they meet. As we move into 2018, it’s time to look ahead and predict what’s in store, so to speak, as the retail experience continues its evolution to meet a new world of customer needs:

1. Fulfillment Options Expand to a Full Menu. Connected-store programs that enable customers to "click and collect" — shop and pay ahead and collect items either in-store or via home delivery — will accelerate as more retailers pilot, roll out and expand offerings. Many retailers will be launching V2 (version two) of these programs and offering customers many different options. On the rise: Same-hour pickup and same-day delivery. Retailers will develop new programs so that online and mobile customers shop from local inventories, tying it to a service that delivers to the doorstep.

2. Amazon's Physical Retail Strategy Will Reveal Itself. The juggernaut's acquisition of Whole Foods was one of the top business stories of 2017. So far, we've seen Amazon taking its price leadership into the grocery field — lowering prices on many items at Whole Foods and driving traffic to stores. Over the next 12 months, we'll see more of Amazon's grocery strategy play out as it expands grocery delivery services and lights up Whole Foods locations as mini fulfillment points for other goods sold on Amazon.

Next up: We wouldn't be surprised to see another big Amazon acquisition in 2018 – this time a retailer, possibly in apparel. The rationale: Both grocery and apparel fit well in Amazon's overarching strategy to drive sales and customer loyalty in high-frequency retail.

3. Retailer of the Future Will Look a Lot Like Wal-Azon. We’re not there yet, but if you look at Amazon with a much bigger physical footprint and Walmart with a much greater digital footprint you’ll get a glimpse of the mass retailer of the future. In the model that is emerging, digital matters but so do stores.

Walmart is a great example of an aggressive response by a retailer once it realized the urgency of the Amazon threat. The company’s acquisition of Jet and the Jet team helped unlock the path forward. Now, Walmart offers in-store and curbside pickup points and continues to expand and refine them. It is tightly connecting its online property to store locations and offering many different options for customers.

4. Retailers Respond with Product Leadership/Innovation. Consider it the retail equivalent of the Netflix/Hulu/HBO/Amazon Video media-battle royale. In the same way that entertainment platforms compete for consumer mindshare — and market share — with distinctive, one-of-a-kind exclusive programming, we can expect to see the same from visionary, creative retailers. Will see more retailers operate in the style of Zara and H&M, trading in lines and brands that are not being sold through broader retail marketplaces.

Also in 2018, expect to see more store-within-a-store concepts like the Sephora/J.C. Penney partnership as retailers work to offer up traffic-driving product lines with partners.

5. Servicing Traditional and Digital Shoppers. Just as it's not a great experience to wait in a fast-food line and see someone who has ordered ahead skip the line and grab their food, retailers in 2018 will be experimenting with how to get order-ahead/pick-up in-store just right for all customers. Initially, the focus is on running these programs effectively — getting the logistics down for in-store or curbside pickup. Then, it becomes how to answer the Starbucks question of who gets served first in an order-ahead world.

But also in 2018, retailers with more mature programs will be getting to the next order of business – working on revenue-enhancing strategies to attach sales and reward in-store trips for order-ahead customers.

6. Building a Better Box. Finally, physical stores themselves are beginning to take on new shapes. Consider the parallel trend emerging in restaurants: If a particular restaurant functions primarily as a kitchen for pickup, it doesn't need to look the same as a sit-down location. In retail, if a store is a convenient pickup or service location, it doesn’t need to have the same footprint as a big, mainline store in the chain.

The Bottom Line
As we turn the calendar to 2018 and enter a new chapter in blended retail, one part of the plot holds up in any era: Classic retailers and brands can win out by connecting with consumers in ways that offer value, convenience and confidence in the experience.

Jaron Waldman is CEO of Curbside, a Silicon Valley startup that connects stores and restaurants with mobile customers. He previously founded Placebase, a location technology company that was acquired by Apple in 2009. Curbside works with leading retailers such as CVS, Nordstrom and Sephora and leading restaurant chains such as Chipotle, Pizza Hut and Boston Market to scale their order ahead programs.
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