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DirectBuy takes a look at the state of retail, etail and m-commerce and where the industry might be headed and what could drive it forward.

By Mike Bornhorst, CEO of DirectBuy

Based on eMarketer’s latest forecast, total retail sales in North America reached $5.254 trillion in 2015, including $4.785 trillion in sales in the United States alone. The same report predicts that U.S. retail sales will approach $5 trillion in value this year.

So, where is the industry headed and what should retailers be focused on in the coming years? There is no shortage of data points out there pointing to the state of retail today, but rounded up below are what stand out as the most meaningful insights that will continue to drive the industry forward.

Subscription Takeover

Online subscription retail services are undoubtedly here to stay, and they are responsible for the creation of many new e-commerce brands, as well as entirely new offerings from some of the world’s most recognized retailers. A recent report from Hitwise, a division of Connexity, found that visits to the sites of online subscription retailers topped 21.4 million in January 2016, compared with 722,000 visits in January 2013.

Perhaps most interesting about the successful offerings in this category is that service is always at the forefront – not necessarily product. To be considered consistently valuable to a consumer, these brands must create a culture of earning business month after month since the products being offered can often be found on store shelves anywhere. Instead of massive advertising budgets, these brands invest and allocate the majority of their resources to service.

Subscription retail services are creating an increasingly demanded approach to retail, and traditional brands must take note and deploy efforts that spark the same level of commitment and sustained value in their day-to-day shoppers.

Mobile is Multiplying

In the past, mobile was predominantly utilized to research product reviews, compare pricing and discover coupons and offers. Today, that couldn’t be further from the truth, with more than 82 percent of the 1.91 billion smartphone users utilizing mobile devices to shop.

In 2015, consumers spent more time inside mobile applications than watching television, according to a report from Flurry. Additionally, research has also found that nearly a quarter of consumers said they have between six and 10 retail apps on their smartphone as of April 2016, up three percentage points from October 2015. As mobile shopping app usage continues to grow in an exponential fashion, we can expect to see more and more retailers innovate through the development and evolvement of mobile apps.

Today’s consumers expect retailers to offer mobile apps that make shopping on a smartphone even easier than in a store or online. With that said, shoppers want any and all touchpoints to be consistent no matter the chosen channel. Delivering a robust and unified omnichannel approach allows retailers to track consumers’ interactions regardless of whether they are purchasing via a brick-and-mortar store, desktop or mobile device. When done right, the collected data allows for endless personalization opportunities, creating the relevant, one-to-one communications shoppers are seeking. And with all signs pointing to consumers spending more when shopping on mobile devices, this trend that will play one of the largest roles in customer retention and increased ROI.  

Customer Experience is Key

It’s been reported that it takes 12 positive experiences to make up for one poor and unresolved one, and that a customer is four times more likely to defect to a competitor if the problem is related to service rather than price or product. But some retailers simply fail to understand the sheer importance of customer service, when the reality is a retailer’s actions so often equate to consumers’ overall brand sentiment. And it’s widely known that consumers promote negative brand experiences far more than positive ones.

These metrics are a testament to the impact an inspired team of customer service representatives can have on the customer experience. The service level, processes and technology they implement are critical for retailers to continually improve the customer experience while reaping the associated monetary benefits.   

The key to meaningful customer experiences is achieving the proper balance between customer service and value. It’s no secret that retailers like Nordstrom, who commit significant focus and resources to customer service, can demand a higher price since shoppers feel they are receiving value in return that extends beyond the tangible items they are purchasing. Analyzing target audiences is critical to implementing the proper methods, as some groups’ value will be solely based on the price a retailer offers.

Once the appropriate balance is achieved, it is integral to have a perfected service recovery process in place. Issues are guaranteed to arise through the customer’s journey, but retailers must anticipate what these issues are likely to be so they can be prepared to fix them immediately. Sometimes the most satisfied customers are those who have been won over after a problem was handled efficiently and effectively. 


Mike Bornhorst is the CEO of DirectBuy, where for over three years he has been transforming the savings club’s member experience to enhance lifestyles through savings, selection and service. As a trusted and decisive leader, Bornhorst’s years of executive leadership have centered around the establishment of sustainable growth opportunities and operational excellence.

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