2015's key retail trends


Discover what's happening with data use, shipping speed, mobile and other important drivers of consumer spending habits.

Encouraging economic news and upticks in consumer spending give retailers an opportunity to come out on top in 2015 and meet or exceed their revenue goals. The key is adapting to significant changes in consumer behavior. Bala Ganesh, UPS retail segment marketing director, shares six trends to watch:

Global e-commerce is estimated to reach 16 percent in 2015, largely from expanding online and mobile consumer segments in emerging markets.

1. Data can help you understand what customers are buying and when. Retailers who analyze transaction-level data get better at forecasting what customers will buy, and when and where. The goal is to improve inventory turnover and avoid markdowns.

"Some major retailers are using RFID technology to conduct a real-time inventory with a wand, walking up and down the aisles," Ganesh says. "That way you minimize the need to carry buffer stock, which gets expensive."

2. Speed to customers is key. UPS data show that 85 percent of online shoppers will wait five days for delivery – and two additional days if the shipping is free.

"But the same percentage want to see express shipping options because they may need to get something overnight," Ganesh says. "And if you look at Millennials, though, they expect two- or three-day delivery."

3. Free shipping has moved from novelty to entitlement. Today, nearly 60 percent of online transactions come with free shipping, according to comScore data. "Free shipping is so commonplace now that you can no longer count on getting a bump in sales revenue just from offering it," Ganesh says.

"Of course, free shipping is not free," he says. "The best strategy going forward is to tie free shipping to a higher cart threshold or to offer it as an incentive to sign on to a loyalty program."

4. Exact date of delivery is essential. Some 56 percent of consumers want to see the actual package arrival date, not just a range of days. "It's important for retailers to include pick-and-pack time in their time-in-transit estimate, and to not overestimate. Add too much time and you risk cart abandonment," Ganesh says.

5. Mobile's role is rising. U.S. retail mobile sales will top $132 billion by 2018, eMarketer predicts. Mobile devices have become essential tools for consumers whom UPS calls "flex shoppers" – they move seamlessly between websites, stores and smartphone apps. Consumers say they still prefer to purchase online with a PC, but 25 percent of mobile device users say they use smartphones or tablets for research at least weekly, before they enter a store. And 40 percent have used mobile devices to find or redeem coupons.

"Mobile phones are very useful for low involvement activities, such as research, but conversion usually happens online or in the store," Ganesh says. "You still need to have your site as browser friendly as possible."

6. Global e-commerce is expanding. Global e-commerce is estimated to reach 16 percent in 2015, largely from expanding online and mobile consumer segments in emerging markets. "In recent UPS/comScore global shopper research, nearly one in four (24 percent) of purchases worldwide were made with online retailers outside their own country," Ganesh says. "Half of these were made with U.S. retailers."

For more insight into the global retail landscape and consumer preferences, check out the latest UPS Pulse of the Online Shopper™ Global Study white paper, published in March 2015.

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