To devise the forecast, Edited reviewed more than 660 million online products through its artificial intelligence analytics-powered platform in addition to insights from international retailers.
Though shoppers might be gobbling up discounts, Edited’s analysis suggested that this shouldn’t be a long-term strategy. “In 2018, brands will experiment with ways to use prices to attract customers,” said Katie Smith, Edited’s senior analyst. “This includes giving customers a discount if they remove the ‘free returns’ option or buy multiple items, or are transparent about supply chain costs, like Everlane to align with consumer values.” This is an especially crucial approach when targeting Millennials who notoriously value authenticity.
To endure Amazon’s cataclysmic market takeover, Smith also underscored deploying AI to deliver hyper-personalized product recommendations and shopping journeys to consumers. “The continued expansion of Amazon into groceries, apparel and other consumer goods mean AI will be essential for retailers’ survival,” Smith continued. “In 2018, new AI applications including more chatbots, voice activated devices, real-time analytics and systems to detect payment fraud will flood the industry.” This requires employing trusted professionals to select and launch the most appropriate apps.
Next year will be the year to develop meaningful and purposeful relationships with consumers, according to Edited’s analysis. Retailers and brands across categories no long have the luxury of resting on any remaining laurels — instead those that proactively take the next step to understanding their consumers, and conversely, expressing their identities to target audiences, will be the most likely to succeed.
“In 2018, the onus on retailers is to educate shoppers on the value they deliver beyond their wares, helping to build an emotional connection and sense of community,” said Smith.
Premium merchants are set to secure the most growth, Edited’s research forecasted. Due to an influx of Chinese consumers, Millennials and quickly maturing Generation Z, the luxury category is geared to achieve the highest gains. “The average cost of luxury items is up 15.4 percent compared to three years ago,” said Smith. “The luxury retail market continues to grow more than any other category.”
In the face of the overwhelming amount of store closures that occurred this year, Edited proposed that consumer demand for expedited shipping will put an emphasis on delivery staff — transitioning the relevance from in-store associates to warehouse workers. “As demand dwindles for in-store retail staff, the demand is shifting from the shop floor to delivery,” explained Smith. “Consumers will expect quicker — even same day — delivery, the convenience of scheduling a time, and easy return policies, which retailers will need to support without sacrificing margins.”
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