With the after effects of Black Friday and the Christmas frenzy fresh on our minds, retail is moving full speed ahead in 2016. There are some very interesting trends to look at for the coming year.

 

  • Consumers have more money to spend and they expect it to stay that way

     

    Based on the most recent U.S. Department of Commerce Bureau of Economic Analysis that was released at the end of November 2015, annual disposable income rose 1.0% since late 2013. Consumers’ confidence that their income would continue at their current rate is up 36% over that same time period. That translates into $1,006 real disposable personal dollars per capita to be spent in the marketplace.

     

  • Brick and mortar retailers using online order systems with in-store pick up will continue to grow.

     

    Retailers will follow the example of Walmart and Macy’s “In Store Pick Up” model. Retailers are leveraging their physical footprint to grab market share in the online space with convenience to their location as a big selling point, while others utilize it to get more in store sales. In fact, Macy’s divulged last year in a MediaPost interview that consumers may make the decision online, but they see an increase in purchases of 25% for additional items when the consumer picks up in store. This trend will continue and expand in 2016.

     

  • Online will venture inland.

     

    In an interesting twist to the move for Brick and mortar retailers to expand in cyberspace, once online-only giants like Amazon, Birchbox, and Warby Parker will continue to see expansion into physical stores. As an example,Warby Parker started as an online-only retailer in 2010 and now has 26 stores in 16 states.

     

  • Millennials will drive the growth of technology in retail.

     

    According to Accenture Research, Millennials are currently spending $600 billion a year in the U.S. and by 2020 that amount will reach $1.4 trillion. If retailers want to catch this wave of spending power, they will need to go online to do it. Based on the Accenture’s data, 41% of those surveyed said that they frequently check out merchandise at a retail store but then check online to find the lowest price. This trend is only increasing, especially due to smartphones, which allow customers to easily search for items anywhere.

     

    2016 has the potential to bring a rebound for retail sectors that have struggled, with increasing consumer confidence and disposable income. The biggest winners will be those who study their market segment and know how their customers like to buy better than their competitors do.