Manhattan Associates predicts mobile commerce, millennials and faster fulfilment will drive retail innovation in 2016

Manhattan Associates, Inc. predicts a rapid migration to customer-centric retailing, more personalised shopping, and the pervasiveness of mobile commerce will present some of the biggest challenges and inspire some of the greatest innovations shaping retailers' strategies during 2016.

Consumer spending shows no sign of slowing and will, according to new forecasts, help fuel UK economic growth in 2016, despite the current global economic turmoil. However, this increase in spend means mounting pressure for retailers that are frantically trying to keep up with consumers and their rising expectations. With millennials in particular, demanding seamless experiences across multiple channels, as well as more and slicker order and fulfilment options, retailers must make informed choices about not only what is right for the consumer but also right for the business.

Craig Sears-Black, UK managing director at Manhattan Associates, commented, "Growing consumer demand, expectations for a more personalised shopping experience and increased mobile use will cause retailers to make some fundamental changes in 2016. We have therefore identified five key areas in which retailers can focus attention, to not only achieve customer satisfaction but also to drive business growth and profitability."

The five key areas to address:

1. Make the shopping experience personal and frictionless
2. Re-define the role of the store assistant
3. Recognise the power of Millennials
4. Embrace mobile to achieve customer-centric retailing success
5. Deliver faster, and be more flexible with returns

1. Make the shopping experience personal and frictionless

The anonymous shopping experience has had its day. On the back of digital personalisation success, retailers are turning their attention to the in-store experience, recognising both the rise in customer expectation and the differentiation personal service can offer. But what does that experience look like in 2016? From individually created recipe ideas and ingredients lists in supermarkets, to intuitive, customer inspired fashion recommendations, retailers have the chance to transform the in-store engagement.

Research conducted by Manhattan Associates in January 2016 revealed that a tailored shopping experience will encourage a significant number of shoppers to be more engaged with the in-store experience: 49 per cent say they would interact more with store associates if the shopping experience was personalised. So when a shopper reaches the point of sale, why not give them tailored discounts, recommendations based on their shopping history and even style tips matched to their recent purchases?

Personal shopping is back. It is time for retailers to redefine the role of stores, embrace technological innovation that drives both service enhancements and operating margins, and engineer a cultural shift that will enable staff to reinforce brand value and deliver a personalised service experience across every channel.

2. Re-define the role of the store assistant

Whether a discount retailer or a luxury brand, retailers are beginning to understand how important the store assistant is to the overall shopping experience and the business. And as consumers become ever more connected, store assistants must have the knowledge, skill-set and desire to offer the best possible experience. 54 per cent of UK shoppers say store associates are either 'very' or 'somewhat important' to a good shopping experience.

But it seems store associates don't have the knowledge and tools to provide great customer service. In fact 71 per cent of shoppers believe they know more about retailers' products and services than store associates. Retailers can fix this by educating their staff, but they need more than just product information. To provide a great customer service they need access to stock levels across your network, helping them offer a full set of delivery alternatives, such as next-day in-store collection or online ordering.

We predict that many retailers will begin emulating the experiences of retailers like Apple, and change their structure so the store assistant plays a fundamental part in the buying process from start to finish. Why such companies in particular? Because they have invested in their staff and technologies to ensure the customer not only feels looked after, but also leaves the store with everything they wanted and more.

However, a cultural change such as this cannot happen unless it is championed from the top down. Board level executives need to buy into the potential results that investment in staff and customer experience initiatives can have.

3. Recognise the Power of Millennials

Millennial's or Generation Y have a connection with the digital world, meaning they treat their mobile phone like an extension of their family and are always looking for an Internet connection. This desire and ability to instantly interact with the online world makes them a frequent and demanding shopper, leaving some retailers struggling to keep up.

In 2016 we think it is time for Millennials to take the lead on what they would like from a retail experience and help retailers drive new strategies and initiatives. With 40 per cent of Millennials showing a desire to give up cash completely and 91 per cent of them opting to use a self-service checkout, it is clear that these 18-34 year olds shop in a different way to the traditional retail model. They are always adapting to technology quickly, and they expect retailers to do the same.

4. Embrace mobile to achieve customer-centric retailing success

With those shopping via their mobiles spending up to 66 per cent more than those who shop just in store, having a successful mobile presence is a no brainer for many retailers. However, as mobile now plays a more important role in not only browsing and buying but also paying for goods, the potential is larger than ever before.

Take, for example, the use of beacons. We predict that 2016 will see retailers using these more and more to augment the in-store experience. Not only are they cost effective, these devices communicate with smartphones directly through Bluetooth; meaning stores can lure consumers in with offers and discounts as they pass by.

And mobile doesn't need to stop at the consumer; store assistants can also use mobile technologies to enhance the shopping experience. With tablet-based mobile selling solutions, store associates can deliver a personalised selling and service experience unified across digital and physical channels. Store associates can access an online product catalogue automatically populated with a shopper's cross-channel purchasing history, wish lists, online shopping cart and return history. This type of capability makes it simple and efficient to offer the entire network of available inventory and dramatically improves the associate's ability to up-sell and cross-sell.

With modern POS solutions, which are transitioning from fixed point systems of record (capturing orders) to mobile systems of engagement (facilitating engagement with customers), store associates can accept payment "on the go" for all of a customers' orders in one single transaction, including credit card, cash/check tender or Apple Pay/NFC mobile payment. What's more, today's advanced mobile POS solutions can handle the most complex return situation with the least amount of friction, and mean store associates have the ability to accept returns, regardless of which channel initiated the order and how the customer chooses to receive credit.

5. Deliver faster, and be more flexible with returns

Across both online and in-store shopping, price is the number one attraction for two-thirds (67 per cent) of shoppers. No surprises there, but what's next on the list? Fast delivery, at 51 per cent, and flexible returns at 42 per cent, take the second and third spots. The message is clear: if retailers aren't competing on price, they're competing on speed of deliveries, their returns policy and making things just as convenient as possible for the consumer. To this end, previously pure-play online retailers like ASOS and Missguided are seeking build a physical presence on the high street by leveraging Asda's recently launched ToYou service as well as opening their own stores.

Focusing on these areas of change will not only strengthen customer relationships, but also increase loyalty, revenues and business growth. With the right approach and technology, retailers can expect huge success in 2016.