Although it’s only April, 2014 is proving to be a transformative year for retail. Every aspect of the industry — from manufacturing to ecommerce — is on the brink of a fundamental shift.
To stay competitive, you must learn how to use these customer- and tech-driven megatrends to your advantage.
1. Curated Shopping
Trunk Club’s stylists will hand-pick clothing for you, Gilt will tell you which discounted designer pieces to buy, and Tisket allows you to present your own collections for your friends’ review. Here, trust in the curator’s judgment matters more than anything else, including price.
2. 3-D Printing
3-D printing is a supply chain game changer. Converse is poised to save 70% on shipping and logistics costs by incorporating 3-D printers into its manufacturing process. Soon, when a customer needs a replacement part for an AC unit, she’ll be able to simply print it at home.
In the meantime, anyone can walk into a MakerBot store and walk out with a custom-printed object. And as 3-D printers become cheaper, they’ll revolutionize manufacturing.
3. Amazon Prime
Thanks to Prime, it’s impossible to compete on service or shipping price. Not only does Prime guarantee free two-day shipping, but it also offers access to the Kindle Owners’ Lending Library and Amazon Instant Video.
Although the annual membership fee spiked from $79 to $99 this year, the increase won’t scare off customers.
4. Increased Broadband Penetration
Merchants who want to provide on-demand entertainment now have access to the biggest audience ever. However, the importance of broadband means cable companies have become the gatekeepers, and their actions will impact the entire sector.
Shopify provides an off-the-shelf service that lets anyone launch an online store. Shopify’s new partnership with Apptive will allow customers to browse and purchase from Shopify-based stores through third-party apps.
With the tech barriers to ecommerce falling, expect to see more nontraditional retailers hawking their wares online.
6. Digital Currencies
Overstock.com and TigerDirect recently began accepting Bitcoin as an online payment option. These companies aren’t alone. There are more than 3,000 global merchants who now trade in the digital currency.
At this stage, Bitcoin remains volatile and unpredictable, but the concept is gaining traction. As it stabilizes, the technology could have a major impact on the way we process international and digital transactions.
7. Smarter RFID Tags
Radio-frequency identification technology allows for better tracking up and down the supply chain. Smart RFID tags communicate with each other through a central network, eliminating the need for a large warehouse staff to scan individual items. This has the potential to drive down costs and save time.
RFID technology will soon transform the in-person shopping experience as well. Instead of waiting in a checkout line, we may soon be able to walk out of the supermarket with a cart full of groceries. The RFID tags will tell the store what we purchased and charge our accounts automatically.
Rob Biederman is the co-founder and CEO of HourlyNerd, a service that connects businesses to top MBA students and alumni to solve critical business problems at affordable prices. Throughout his career, Rob has consulted with companies such as Omaha Steaks, American Apparel, and Michaels Stores on their retail marketing projects. Connect with Rob on Twitter and Google+.