Launched in 2007, the iPhone is a teenager now, and the overall smartphone marketplace is beginning to show signs of age. The modest growth in app downloads follows a jump during the height of the pandemic, with the current rate reflective of the space’s maturation, coupled with recession fears, changes to Apple’s privacy policy and a broader digital retraction. 

After dropping precipitously in 2021 as app developers adjusted to Apple’s App Tracing Transparency (ATT) framework, iOS installs grew 16% last year. The ATT framework, however, has hit one of the most profitable and largest categories — gaming — the hardest. After dropping 10% year-over-year in 2021, gaming installations bounced back in 2022, rising 4%. 

On the other side, Android installs grew 9% year-over-year, thanks in large part to the platform’s growth in India and developing markets. India’s 18% surge in downloads, however, was offset by a download decline of 18% in Russia, a result of the war in Ukraine.

The challenges in tracking and remarketing in iOS have also led to a surge in owned media marketing from app developers. Consumer messaging, such as push notifications, email and in-app messaging, has jumped 45% on Apple’s platform since April compared to only a 17% gain in those tactics on Android. It helps that owned media is a low-cost channel for developers to build a brand image, AppsFlyer explained.

Meanwhile, ID matching rates increased 10% as app marketers discover that having users provide consent to advertising and tracking delivers a better overall ad experience. This past year’s 26% IDFA, however, is down significantly from the pre-ATT days, when ID matching rates were above 80%. 

At the same time, many users may be seeing more irrelevant ads. Social networks like Instagram, YouTube and TikTok have introduced new ad units across their inventory. The increasing ad load is leading to more irrelevant ads per user and will eventually impact the overall user experience, according to AppsFlyer. 

The ATT is also affecting revenues from in-app purchases (IAP), particularly for gaming apps. Gaming apps saw a 16% drop in IAP, largely because they are more affected by privacy restrictions. Non-gaming apps saw a 20% jump in IAP revenue.

This article was written by Aaron Baar from Marketing Dive and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to legal@industrydive.com.

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Going forward, marketers cannot afford to ignore combating misinformation, ethical AI use, product placement and loyalty programs, per Gartner’s report, “Predicts 2023: AI, Social Toxicity and Disappearing Consumers Forge the Future of Marketing.” Taking a long view, Gartner predicts that AI’s role in marketing will continue to expand and that those departments with widespread AI use will be able to streamline the creative process and reduce friction. By 2025, this will enable them to shift 75% of operations to more strategic activities, resulting in more dynamic marketing organizations.

The coming year, however, could be a tough one for marketers who will face significant challenges to growing brand value and loyalty amid an economic rough patch and changing digital habits, Gartner forecast in a separate report from earlier this month. By next year, 60% of CMOs are expected to cut marketing analytics teams while forecasts for ad revenue in 2023 have recently started to shrink.

Product placement is one trend whose impact could be more significant in the months ahead, with a Gartner survey from October indicating two-thirds of surveyed consumers prefer product placement over separate ads. Product placement could garner more of brands’ budgets as they attempt to address ad-averse consumers. Brands such as Coke and Lacoste have seen success with product placement in shows such as Netflix’s “Stranger Things.”

“Brands pay top dollar to reach high income consumers via digital advertising, but such impressions become less meaningful as this audience figures out new ways to tune them out,” said Kate Muhl, vice president analyst at Gartner, in a statement. “Marketers who cling to traditional digital ad formats will increasingly reach an audience composed largely of digital have-nots.”

Movies and television are not the only areas getting interest from brands. Video game advertising, such as on in-game billboards, has gotten a lot of attention. Hershey found success with the method for its Oh Henry! candy bar, increasing recall by 15.9 points.

This article was written by Sara Karlovitch from Marketing Dive and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to legal@industrydive.com.

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With their widely used loyalty programs, credit-card partnerships and other data-gathering initiatives, hotel brands are sitting on a wealth of first-party data that can be used to better cater to target consumers. Sojern’s study, which surveyed 74 executives representing a cross-section of hotel companies in North America, Europe and Asia Pacific, indicates how hotels are already seeing results from leveraging their first-party data. 

Hotel brands surveyed reported a slew of benefits aside from boosted revenue that seem to stem from the implementation of a first-party data strategy. Fifty-seven percent of respondents indicated they saw an increase in guest satisfaction at their properties, 76% reported that they saw an increased campaign performance, 68% reported stronger customer relationships and 64% said brand value increased. 

The survey also indicated that 59% of hoteliers have already implemented a first-party data strategy, 62% of whom said the strategy was “very important” for digital marketing. Of those who had not yet built a first-party data strategy, 75% said they want to build one. Eight-six percent view a first-party data strategy as being useful in maximizing overall revenue. 

While the first-party data is clearly important for hotels’ marketing efforts, it could also prove valuable should any more hotel chains opt to create their own media networks. Already a growing channel for retailers, proprietary media networks offer companies an opportunity to use their owned media channels — like in-room television and digital screens in hotels — to host paid advertising from other brands. 

Marriott International launched the Marriott Media Network earlier this year, the first such network for the hospitality industry. The media network will initially target travelers in the U.S. and Canada, but Marriott said it would expand the platform globally giving advertising access to the 164 million members of its Bonvoy loyalty program. 

“It’s no surprise that three-quarters of hotel executives want to build a first-party data strategy,” said Kurt Weinsheimer, chief solutions officer at Sojern, in a release. “With a cookieless world coming, it will disrupt the entire industry, and marketers must use this time wisely to prepare.”

This article was written by Aaron Baar from Marketing Dive and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to legal@industrydive.com.

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Walmart hasn’t been shy about touting its omnichannel efforts and why catering to meet shoppers’ needs across in-store and online channels can boost profitability. 

“We’ve shared before — if people buy in-store and online with Walmart.com, they generally spend twice as much and they shop in-store more often,” McMillon said. The retailer giant is “very excited” about automation as it builds out its e-commerce fulfillment, McMillion added.

McMillon’s sit down with Morgan Stanley Analyst Simeon Gutman provided more details into the role automation plays, which fulfillment methods the retailer is relying on and how e-commerce connects to its alternative income streams and overall profits. 

High-tech supply chain

McMillon said his confidence in Walmart growing its top-and bottom-line growth is partly driven by the chance to improve productivity through automation, particularly with its supply chain. 

“There’s more in front of us to do with the supply chain in particular and we’re very excited about automation. And I think it’s going to really help our store associates and help us with productivity,” McMillon said.

He continued: “Specifically, what we’re seeing is — after a number of years of work — there are opportunities to use automated storage and retrieval systems in ambient distribution centers, food distribution centers, e-commerce fulfillment centers and eventually market fulfillment centers next to stores.”

Automation can create customized e-commerce orders for customers or as department- and store-specific pallets, McMillon said. In the U.S., the retailer already receives grocery products on pallets, which make freight handling easier. Now, the retailer wants to use that model for general merchandise and enable stocking from the pallet, he said. 

“It’s a different process, eliminating a lot of the hours that we invest in today in the back room of our stores,” he said.

Walmart is turning to automation to not only boost productivity but also to help reduce labor costs. “One of the biggest costs that we have in our e-commerce businesses is for store-level wage investments to pick orders,” McMillon said. 

McMillon said Walmart is working with four different partners on the four types of fulfillment centers. As Walmart has layered on those different types of fulfillment centers, starting with ambient and then adding food and e-commerce with different operating systems, the retailer has worked to sync them together and optimize inventory. Data and algorithm improvements and robotics with its supply chain are allowing for better demand forecasting, allowing for new ways to reduce costs, McMillon said.    

Walmart has also focused on outfitting its existing distribution centers with automated storage and retrieval systems to avoid having to build more facilities, McMillon added.     

In some cases, the retailer is choosing to add new facilities where they’re needed, including a recently opened one in Chicago — the first of four high-tech fulfillment centers Walmart is building over the next three years.        

“There’s not a lot of human engagement with that product,” McMillon said about the Chicago facility. “There’s still some, which eventually we’ll work through to an even greater degree, but it is really slick and also more accurate.”  

Walmart is also using store-level fulfillment in other cases, leveraging the last-mile advantage of store locations near customers and carving out space for micro-fulfillment centers (MFC) while retaining in-person shopping, McMillon said. 

This fall, the retailer bought MFC developer Alert Innovation, following work on a multi-year pilot of the company’s robotic grocery order-fulfillment technology, known as Alphabot. Walmart Chief Financial Officer John David Rainey told investors during its third-quarter earnings call that the retailer is expanding its buildout of MFCs that are attached to or inside its supercenters. 

Evolving business model

The multi-year investment in revamping its supply chain is happening in tandem with changes to the retailer’s business model to focus more on omnichannel strategy, McMillon said.

Walmart has long focused on its stores. But as the retailer built up its e-commerce business, in-store and online shopping felt siloed as recently as last year, McMillon said. Through organizational structure changes, the retailer has achieved a more seamless shopping experience by doing away with channels, McMillon said.

The company is using income from its fulfillment services, advertising and Walmart+ membership to help support its investments in areas that are not yet profitable, while also running its retail business, McMillon said. Among its alternative businesses, Walmart’s marketplace is the top priority due marketplace seller fees and its connection to the retailer’s fulfillment and advertising offerings, he said. 

Building out digital relationships with customers can help the retailer steer people toward its Walmart+ memberships. 

“The primary reason why someone would want to become a Walmart+ member is for free delivery and our food and consumables customer value proposition is attractive. … Our challenge is to take that frequently purchased set of items in that relationship and have it extend into more discretionary items and build the basket out over time,” McMillon said. 

Ultimately, Walmart can “see all the pieces” of the technologies it’s leveraging adding up to a profitable model, McMillon said.

So far, the work appears to be paying off: For its U.S. business, Walmart recorded e-commerce sales growth of 16% and 12% in its third and second quarters of fiscal year 2023, respectively — a jump from the 1% increase it recorded in its first quarter. 

“Now, I think we are truly an omnichannel retailer,” he said. 

This article was written by Catherine Douglas Moran from Retail Dive and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to legal@industrydive.com.

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What is it? And where do you find it?

Some consumers might have those exact questions. A Piper Sandler survey of 7,100 U.S. teenagers from April found that 48% said they are unsure of or not interested in the metaverse. Even more, a September report from Wunderman Thompson Intelligence found that only 38% of global consumers were familiar with the concept.

Whatever it is, retailers are diving head first into it — and there are plenty of users watching.

Companies across the industry are increasingly holding activations on platforms deemed to be part of the metaverse. Definitions of what the metaverse actually is (or is meant to be) can vary, but generally, it is a virtually immersive version of the internet. Roblox, Decentraland and Sandbox are all spaces retailers are exploring to tap into the metaverse, even if they aren’t as interoperable as some want them to be at the moment.

Roblox may be one of the biggest platforms with 58.8 million daily active users, a 24% increase from a year ago, according to its latest earnings report. The platform is resonating with younger users as well: As of Q2, 24.2 million daily active users were under the age of 13, according to Statista.

With that age group destined to gain buying power over the next decade, it’s no wonder retailers are trying to reach them where they are.

Companies from Gucci to Walmart to Gap have launched activations on Roblox, ranging from well-designed virtual pop-up stores to interactive games.

But is the metaverse just a virtual billboard for brands, or is there a way to connect real-world merchandise and revenue to it? Here’s a look at how some retailers are using the space for tangible benefits.

‘Consumers continue to prioritize physical interactions’

Beyond developing aesthetically pleasing activations in the space, retailers have started to incentivize benefits such as real-world apparel collections, discounts and loyalty perks to it.

Accessories retailer Claire’s launched ShimmerVille in Roblox last month, with a focus on self-expression using virtual accessories that are also sold in its real brick-and-mortar stores. Victoria’s Secret’s youthful sub-brand Happy Nation collaborated with Roblox in June by launching a virtual obstacle course, where users could help donate actual pairs of underwear from the brand to Undies for Everyone, as well as view the latest capsule collection. Ralph Lauren announced a clothing capsule for players on the gaming platform Fortnite earlier this month, which is tied to a physical clothing collection with a limited edition version of the brand’s iconic logo.

These brands could be clued into what’s important for consumers when it comes to virtual worlds, according to Forrester data. In a survey from April, Forrester asked more than 1,500 adults to rank what mattered most to them when considering visiting a metaverse space. Behind respecting data and privacy, U.S. respondents indicated that “receiving an offer/discount/coupon on physical products from the brand” was the second most important considering factor.

In April, restaurant chain Chipotle even released a burrito-making interactive game within Roblox that yielded users in-game Burrito Bucks which could be exchanged for real-world entree codes.

“The whole point here is that out of a list of maybe 10 things, the top four were all related to physical environments,” Mike Proulx, vice president and research director at Forrester, said. “What this tells us is that consumers continue to prioritize physical interactions over immersive or virtual interactions. Where the space becomes interesting is when it becomes more of a hybrid.”

Deloitte’s Digital Principal Kevin Rose would agree that there is a lot of potential in connecting more tangible benefits with the metaverse. The space can also be great for product testing, according to Rose.

“If you think about the way you had to really test products in the past, the only real way to test features and attributes of many products was to develop a batch of those products and get them out to market, which is expensive,” Rose said. “But the ability to launch that from a digital perspective … allows you to do things that scale in a much cheaper way.”

Definitions of what the metaverse is and could be may differ, but Deloitte sees a hybrid environment as the more likely case in the future, meeting somewhere between fully immersive day-to-day life and augmented physical interactions.

Justin Hochberg, CEO and co-founder of Virtual Brand Group — the company that worked with Forever 21 to launch its Shop City on Roblox — agrees that product testing is a helpful way to use environments like Roblox, where dressing up avatars is a fundamental part of the experience.

“What about things that really are not part of your product category, but really could be if time and money were no object?” Hochberg said. “In the metaverse, I can create a race car as quickly as I can create a T-shirt … That is the power of using the metaverse as a virtual research and development lab. And we’re doing all of that to great success.”

What about an immediate ROI?

Whether or not these virtual worlds can bring in real revenue for brands in the near term is less decided by experts.

Certainly, there is money being put into platforms like Roblox. In its most recent earnings report, the virtual world showed revenue was at $517.7 million, up 2% year over year.

The metaverse could create $5 trillion in impact by 2030, according to a McKinsey estimate from June. The report said the metaverse would have a $2 trillion to $2.6 trillion market impact on e-commerce. And in March, Citi estimated the addressable market for the metaverse could reach between $8 trillion and $13 trillion by 2030.

But can brands see more immediate returns on their investments?

For Forrester’s Proulx, he sees it as more of a space to learn and test out at the moment, where brands can focus on garnering the attention of new audiences.

“In only rare circumstances is the brand going to see a monetizable return on investment,” Proulx said. “We’re bullish on testing and learning. But temper both your expectations and your investments in the metaverse… If you promise your CEO that there will suddenly be a 2% increase in revenue, that’s just not going to happen today. That’s not to say that it can’t or won’t happen in the future. But today, it’s just way too nascent.”

And Hochberg thinks the metaverse as it exists right now could be useful beyond marketing for brands.

“I think that is one of the biggest myths that is hurting the metaverse right now, is that it’s just for marketing,” Hochberg said. “In general, I think that that is a faulty assumption … What you’re telling me is that you’ve gone into a world that has no physical constraints, where you can create anything, engage people in any way and the only thing you’re doing is creating a more sophisticated Time Square billboard?”

Hochberg looks to his work with Forever 21 as proof of the revenue possibilities on Roblox.

When someone searches Forever 21 on the publicly available Roblox Avatar Shop, the top rows of results are all virtual avatar accessories and apparel, all sold by the retailer. These items are available for purchase using Robux currency (which is purchased with actual money) and can generate real-life revenue for the sellers. Thousands of black Forever 21 beanies sell on Roblox every day, according to Hochberg.

Not all brands on Roblox are opting to sell their own virtual goods. When searching for other brands who have held activations in the space, such as Nike or Gap, the top results are items designed and sold by individual creators rather than the brands themselves.

But whether or not profits can come from the metaverse immediately or in the future, many agree that the concept itself has lasting power, regardless of what it ends up looking like.

“Even though it seems like that hype cycle [around the metaverse] has ended, I would actually say that companies are probably as invested and as focused now as they’ve ever been in the last six months and I think that’s going to continue,” Rose said. “I think the reality of this is that these technologies are going to change our lives. This is here to stay. There are those people who thought that the internet was just a hype cycle … And I think this is going to have a similar impact.”

This article was written by Dani James from Retail Dive and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to legal@industrydive.com.

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In fact, the one thing they might agree on is that they are all different and have niche interests that set them apart from each other, according to a report from Horizon Media in October.

Additionally, 60% of Gen Z agree that the brands they shop with are an expression of who they are and 77% don’t want to feel like they’re put in a box, according to 2020 survey data from Wunderman Thompson Intelligence shared with Retail Dive.

That sets up a conundrum for retailers hoping to reach them where they are, since “where they are” might be completely different depending on which Zoomer you speak with. The age group — defined by Pew Research Center as those born between 1997 and 2012 — has the industry in a chokehold, upending what traditional brands know about marketing and merchandising.

Retailers certainly care about what this generation wants. As this group gets older, their buying power gets bigger within the industry and so does their influence on how well brands perform.

Teens’ self-reported spending increased slightly by 3% year over year to $2,331 according to research firm Piper Sandler’s fall 2022 Taking Stock With Teens Survey of 14,500 U.S. teens. Female teens led that spending increase too, with that group’s overall spend up 10% year over year and clothing being 30% of their wallet share — the highest it’s been since 2012. 

Despite that, Gen Z is not immune to the throes of macroeconomic pressure. Inflation seems to be putting a dent in the group’s ability to save, according to Bank of America data from September that surveyed those ages 18 to 25. It found that 73% of Gen Z say it’s hard to save money right now, and 56% say inflation has created more financial stress in their lives.

With Gen Z’s spending power increasing and budgets potentially tightening, retailers might be wondering how they can earn the demographic’s loyalty. Taking a look at the brands Gen Z currently favors might shine a light on what actually motivates their purchase decisions.

‘A fantastic gardening shoe’

Despite loyalty looking different for this generation, many of their favorite brands are familiar faces (with a few exceptions).

Amazon, Walmart, Target, Dollar Tree and Nike were all ranked among the top 15 favorite brands by Gen Z, according to a survey conducted by research firm Morning Consult of about 2,031 Gen Z adults born between 1997 and 2004.

When compared to the favorite brands of millennials, though, several companies were much more favorable among Gen Z. These included Crocs, Fenty Beauty by Rihanna, Shein and E.l.f cosmetics.

Shein was a high-ranking apparel brand for Gen Z women according to Morning Consult’s data, and a similar pattern of results was found from Piper Sandler.

Nike, Lululemon and Shein were among the top brands to shop for clothing, according to Piper Sandler’s survey. Ulta, Sephora, Target, Walmart and Amazon were top retailers for beauty products, and 52% of all respondents said Amazon was their number one shopping website.

A brand winning with Gen Z in both studies is footwear company Crocs. Additional data from the Morning Consult Brand Intelligence platform, which tracks consumer attitudes, found that purchase intent for Crocs has been building up for years. In 2019, Morning Consult found that overall purchase intent was at 18% and by 2022 it reached 40%. 

Morning Consult attributes some of this growing interest to strategic and unique brand partnerships with Post Malone and Bad Bunny, as well as 7-Eleven and Hidden Valley Ranch.

“Crocs serve the purpose of a fantastic gardening shoe. They also serve as an extraordinary element of self-expression,” said Morning Consult Retail and E-commerce Analyst Claire Tassin. And through the use of Jibbitz (charms used to decorate Crocs), Tassin said they become “very visible. So wearing Crocs in and of itself out and about is sort of making a statement.”

That element of self-expression is a core part of the brand based on Crocs’ purpose webpage, which emphasizes creating a “welcoming environment for everyone.”

Diverse and inclusive self-expression is a value that somewhat sets this generation apart from others, according to Wunderman Thompson Intelligence Editor Emily Safian-Demers.

“I think this is a pretty universally acknowledged truth by now that among Gen Zers, they’re really rewriting a lot of the traditional identity narratives,” said Safian-Demers. “Identity for them is much more nuanced and multifaceted than it has been historically for older generations.” 

The focus on individual decoration and strategic celebrity marketing seems to be working for the footwear company as well. Crocs has been doing well by the numbers, with its namesake brand’s third-quarter earnings showing revenue jumped 14.3% year over year to $715.7 million.

Gen Z’s healthy skepticism

Even though Gen Z might still favor some traditional retailers, that doesn’t mean their affection is easy to earn. 

The generation is harder to please overall, according to Morning Consult. Their average favorability rating for brands across the country is 27%, compared to 33% for all adults and a rating of 36% for millennials. 

“We can just see that Gen Z gives brands lower favorability ratings,” said Tassin. “One of the hallmark characteristics that I see with Gen Z is some really healthy skepticism that I think is born from being our first truly digital native generation, where you can verify all the information that brands are putting in front of you.”

Ultimately, this generation has access to more information and brands to choose from than perhaps ever before. Tassin says this is one reason brands just need to work harder to gain that favorability.

Beyond just having more access to various brands, Safian-Demers agrees that Gen Z is adept at finding more information about a company — and they are quick to share such information with friends. 

“It’s maybe not just that they have more options available to them, but that they also have access to all of this information that people definitely wouldn’t have had access to pre-social media and pre-internet. For that reason, they’re able to see a little bit more deeply into brand behavior,” said Safian-Demers. “They’re able to dissect how brands are behaving, and if they’re actually putting their money where their mouth is when it comes to things like sustainability and diversity.”

Gen Z certainly cares about a variety of social causes that can impact their decision-making. The environment, abortion and racial equity were indicated as social causes teens expressed interest in for Piper Sandler’s survey.

This generation is also more passionate about inclusive branding, including more gender-free selections. A majority (61%) of Gen Z respondents in the Gen Z Fashion Report by student affinity network Unidays this March said they think brands should do more to prove that “style should not have a gender.” Just under half said they are more willing to buy from a brand that has better gender inclusivity through their marketing.

But exactly how much sway do these values have on purchase decisions?

With more sustainable products often costing more than other options, not everyone can pay for them despite their values. A study from last October by pricing consultancy Simon-Kucher & Partners showed that around a third of respondents were willing to pay more for sustainable products, but 60% of the participants said sustainability was an important factor in purchase decisions. 

At the end of the day, price is still a major determining factor, according to Tassin.

“I think that Gen Z, when they look at the drivers of environmental damage and what is causing our temperatures to get warmer, they are very much aware that these larger institutions have more influence than their own individual behaviors,” she said. “You also have to factor in the economics of it all, since Gen Z consumers are still starting out and they’re not making huge salaries.”

But those values Gen Z is attracted to — self-expression, transparency and authenticity — don’t completely go down the drain, Safian-Demers said, even if pricing is still such a large consideration for the group. How a brand actually engages and demonstrates transparency with Gen Z is instrumental to its success among the age group.

“It’s not just the words that brands are using or the imagery that they’re showing,” said Safian-Demers. “I think that the idea of inviting Gen Z into the process of the brand, into product development, product ideation and giving Gen Z a seat at the table is a really good way to engage this generation.” 

This article was written by Dani James from Retail Dive and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to legal@industrydive.com.

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The rising popularity of secondhand retail is hardly news. Even this report notes previously published research, including a study from GlobalData and ThredUp estimating that resale will grow 16 times faster than the broader clothing sector. In fact, in the U.S., the secondhand apparel market will more than double by 2026, reaching $82 billion, according to ThredUp’s most recent report.

Still, WD Partners was taken aback by the depth and breadth of consumers’ enthusiasm for resale, according to Lee Peterson, executive vice president of thought leadership and marketing.

Secondhand sales have evolved from a niche aspect of retail into the mainstream, with a diverse and growing set of retail chains like Walmart, Ikea, REI, Amazon, Home Depot and a slew of specialty apparel players offering or at least experimenting with resale. That also includes many “sophisticated online retailers like The RealReal and Kaiyo,” WD researchers said in the report.

Resale e-commerce is likely to continue to grow and attract investors, though online sales remain unprofitable, they said. That gives physical stores an operational advantage.

“Everything is multi-channel now, so I could see some form of resale or even donations done online in order to be authentic about circular commerce, but clearly, the best results are going to be taking the hard road and doing it in stores,” Peterson said. “Which means training and programs and new ‘shops’. But according to this study, and I’m sure more to come, it’ll be worth it, just like BOPIS is now for retailers who resisted it.”

More, physical stores enable the treasure hunt valued by secondhand shoppers. Buying used items has become normalized — a way to save money and the planet — and is likely to drive traffic and bring new customers into most any store, according to the report.

“What’s evident from these stats is the fact that both department stores and specialty retail rank high, meaning that the mall itself would increase traffic by having used,” Peterson said. “Not only in existing stores, but by attracting tenants into their properties.”

This article was written by Daphne Howland from Retail Dive and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to legal@industrydive.com.

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Despite the frequent complaints from consumers and media reports about self-checkout lanes, grocers are continuing to push forward with the technology as labor challenges persist and consumer shopping habits evolve. Catalina noted that more retailers are pivoting from manual to self-checkout lanes. 

Self-checkout lanes are becoming more popular due to social distancing measures sparked by the pandemic and the availability of automation technology, the firm said. A few retailers, such as Walmart, Kroger and Dollar General, have even started testing self-checkout-only stores, per CNN reporting cited by the firm. 

Offering a mix of both manual and self-checkout lanes can appeal to a wider variety of shoppers and serve different types of shopping trips, Catalina noted.

“In our view, retailers should evolve to create a balance of self-checkout and manned lanes to accommodate more multi-dimensional shopper profiles, improve customer experience, enable cost efficiencies and maximize sales for the long term,” Wesley Bean, U.S. chief retail officer for Catalina, said in a statement. 

Catalina found that the group of shoppers who used both methods includes a mix of demographics, with consumers tending to have a higher annual household income compared to shoppers who used one checkout type exclusively.

In 2021, 39% of shoppers identified as using both checkout types depending on what they were buying, with usage evenly divided between self-checkout and manned lanes. People who used a mix of both methods had the highest customer value ($1,720) and completed the most shopping trips (36) per year in 2021, compared to people who used only one of the methods. 

Of the 12% of surveyed shoppers who said they only use self-checkout, Catalina found they tended to fill smaller baskets, which the firm said suggests they are likely buying household and pantry items in other channels, like at mass retailers or online. Catalina also pointed out that some retailers cap the number of items shoppers can buy using self-checkout.

Self-checkout-only tends to draw 19 to 24-year-olds and also people born between 1928 and 1945, known as the Silent Generation, the firm said. 

Meanwhile, 49% of consumers prefer only using manned lanes. That group mainly consists of baby boomers and Silent Generation consumers with household incomes under $100,000 and a high school education, Catalina’s research found.

“Until recently, shopper profiles generally grouped consumers by demographics and where they are on the purchase funnel,” Bean said. “Now, retailers can layer in check-out preferences and shopper affinities to create a more personalized shopping experience and reach individual shoppers with messages that matter.”

While manual checkout remains popular, the study’s findings underscore that grocers can reach more consumers and meet more shopping needs by mixing in self-checkout. Grocers who only offer one method over another may discourage certain customer demographics or purchasing behaviors, such as consumers using self-checkout for quick trips or baby boomers preferring traditional lanes. 

One factor to consider with the findings is that Catalina analyzed shopper behavior in 2021. As consumer concern about safety with the pandemic has waned, the appeal of self-checkout for maintaining social distancing or speeding up the amount of time spent indoors or in crowded lines may have lessened. 

As retailers boost the presence of self-checkout options, they shouldn’t neglect allowing customers to use coupons at those stations. Catalina’s test of coupons with self-checkout found that the incentives brought in new shoppers, engaged lapsed buyers and resulted in more store visits. This finding goes against industry presumptions that customers don’t want to spend time using coupons in self-checkout lanes, the firm noted. 

Catalina recommends that retailers consider the mix of checkout options, use UPC-level data to better understand how shopper behavior ties to lane choice and create multi-dimensional shopper profiles that factor in checkout preferences. The firm also suggests retailers collaborate with brands on personalizing offers and hone their marketing for different purchasing options. 

This article was written by Catherine Douglas Moran from Retail Dive and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to legal@industrydive.com.

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Live Activities launched in late October and allows third-party apps that track real-time activities to be pinned to the lock screen for eight hours of live tracking and four hours of inactive use. The new feature has the potential to offer brands a major boost in terms of visibility and ease of access, said Mike Herrick, senior vice president of technology for software company Airship in an email to Marketing Dive. Whether it be food delivery apps updating consumers on their order status, fitness apps highlighting live workout stats, ridesharing platforms sharing precise location information of drivers or even news sites sharing election results — all before consumers even unlock their iPhones. 

“Live Activities arguably offers third-party apps the most visible user experience ever on iPhones. That’s especially true considering the minimal — sometimes zero — effort required from app-toting customers to benefit from them,” Herrick wrote in a blog post.

The feature seems to be the marriage of push notifications and the Widgets feature, a tool that offers a continuous presence on consumers’ home and lock screens. Live Activities feed on push notifications in order to stay updated, and while they live on the lock screen, the tool will only last for a limited time after its allotted window of use. Perhaps a welcomed upgrade from push notifications themselves, which create a new slot on the lock screen per update, Live Activities will maintain all updates through one pin. 

The Live Activities addition follows other announcements by Apple that show similar investment in ease of visibility, for example, the tech giant in September unveiled its latest generation of iPhones that are equipped with options for an always-on display as well as a Dynamic Island, an interactive notification and activities tab situated near the phone’s front-facing camera which also can integrate Live Activities. 

The new features may help increase positive sentiment felt by brands during a time when many are attempting to recoup losses stemming from Apple’s App Tracking Transparency integration last year that gave iPhone users the ability to deny certain data-gathering measures. Live Activities could give brands another opportunity to make consumers swoon, which could in return lead to increased access. An Airship global survey of 9,000 consumers found that 36% are willing to allow cross-app and website tracking in the chase for personalized interactions, despite the data-gathering method being one type of information they are least likely to want to share, Herrick told Marketing Dive.

“The more useful an app is to a user, the more likely they can be convinced with proper onboarding to grant tracking permissions,” he said. Since the launch of Live Activities, Apple has already reportedly made plans to enhance the tool with its next update to allow for shorter intervals of time in between updates to keep consumers engaged.

Some mobile marketers have already explored Live Activities for themselves, including Airship client Fotmob, a sports-focused app delivering live scores and stats for soccer games globally. Sports has the potential to be among the most loyal to the new feature, especially with the rise of legalized sports betting, offering fans a chance to see live score updates spanning multiple games that could be happening simultaneously. 

It seems there is no max number of apps that can be pinned to the lock screen with Live Activities, though each app can only have five concurrent Live Activities running at a time, Herrick said. For brands utilizing the tool, Apple urges them to avoid displaying ads or promotions and only show information related to the Live Activity’s function. There hasn’t yet been a clearly defined line of what promotional efforts would be seen as too much, Herrick said, though, the determining factor is likely not in the hands of Apple but instead in those of consumers. 

“Brands need to ensure customers find these new front-and-center experiences rewarding and valuable,” he said. “Without that respectful focus, brands risk low usage and perhaps even deletion as customers seek out apps that focus on better serving their needs.

This article was written by Jessica Deyo from Marketing Dive and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to legal@industrydive.com.

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Given the pullback in e-commerce spend and retailers losing sales amid inflationary pressures, overall technology budgets might not be at the height they once were. This leaves in-store innovation in a predicament.

Global retail technology investment dropped 43% to $13.2 billion in Q2 2022 compared to about $23 billion in Q1 2022, according to a report from CB Insights in July. Additionally, retail tech deals were down 21% quarter over quarter, and only seven companies went public compared to 11 in the previous quarter.

However, in-store technology and innovation aren’t exactly dead. Shoppers may have eased their online buying habits to a degree, but brick-and-mortar stores aren’t immune to the longevity of digital transformation. In fact, the store management technology sector saw an increase in funding during Q2 with a 25% quarter-over-quarter bump to $3 billion compared to $2.4 billion in Q1, according to CB Insights.

Retailers can still benefit from innovating with convenience and might want to look at in-store personalization to differentiate themselves in the market, according to a Deloitte report from Rob Harrold and Adam York.

What types of technology brought convenience and personalization to the in-store experience this year? And which ones have the potential to stick around?

1. BOPIS

Buy online, pick up in store services continue to be sought after even as pandemic restrictions have waned. In March, data from Insider Intelligence predicted that U.S. shoppers will spend $95.87 million on BOPIS this year — a 19.4% increase year over year.

BOPIS, which is sometimes known as click and collect, seemed like a win-win during pandemic restrictions, as shoppers could support physical brick-and-mortar stores without having to spend time in closed public spaces.

The holidays have the potential to show BOPIS’ strength. This season 39% of shoppers expect BOPIS to account for 50% or more of their shopping, according to a report by Bluedot shared with Retail Dive.

That said, overall interest has somewhat decreased since 2020. About 78% of shoppers plan to use BOPIS in some regard this season, which is down slightly from 81% in 2020, according to Bluedot.

Not all consumers are more likely to use the option though. Millennial males in urban environments are more likely to use BOPIS, according to data from Morning Consult. Shoppers in higher-income households are also more inclined to use this purchasing option.

While several retailers added BOPIS and have reported positive results from the service — including Target, Sally Beauty and Office Depot — others are just now jumping on board. Five Below recently released its own buy online, pick up in store program.

BOPIS requires technology or a system that makes it efficient and successful for all parties involved, which is something many retailers are focused on.

Retailers are “starting to think about productivity, efficiency and cost that is top of mind for everybody,” Lokesh Ohri, a principal in Deloitte’s digital practice, said. “Buy online, pickup in store and all the tech involved around doing that efficiently at the store level, either picking front of house or backup backroom … has stuck around and is scaling pretty fast.”

2. QR codes

That weird little black-and-white square that looks like a Rorschach test? Yes, retailers — not just restaurants — are using those. 

QR codes are square barcodes that can be scanned using mobile phone cameras to be directed to more information or payment portals. The technology was actually invented decades ago, but quickly garnered adoption during the COVID-19 pandemic when menus and person-to-person payments were pushed aside.

“It’s become ubiquitous in the market,” Ohri said. “But if you and I were speaking seven years ago, there wasn’t this big hype about QR codes.”

QR codes have the potential to be a way in which customers can discover more information about a product, according to Ohri, who added it “gives them better insights into buying that product, into making that decision and into comparing information across other products.”

In January, Walmart launched an interactive store prototype at its incubator location in Arkansas that featured QR codes along with other in-store technology to help “create opportunities for digital exploration,” the company said at the time. Instacart recently began rolling out QR codes as part of an expanded connected technology suite of products with partner retailers. Additionally, Amazon included the technology in its first fashion retail location this May, where the codes provide more information on sizes and reviews. 

These cases show that QR codes can deliver personalization for shoppers who might want recommendations based on what they’re inquiring about, but also create a level of convenience for associates who can spend more of their time on operational tasks.

3. Store operations

In line with Ohri’s belief that retailers are thinking more about efficiency and productivity, the technology behind store management and operations continues to grow.

That encompasses anything from technology that helps automate tasks — freeing up labor — to using more data-driven approaches to understanding stock levels.

The top equity deals in the retail store management sector for Q1 this year involved a $500 million deal for inventory optimization company Relex Solutions, according to another CB Insights from April. Retail unicorn Swiftly Systems — an e-commerce technology company now focusing on brick-and-mortar optimization — got its second $100 million investment in September. For Q2, a wholesale marketplace platform for retailers to connect with brands took the top spot in the quarter with $416 million.

Labor management is top of mind for everyone right now with the potential to use technology for cost savings, according to Ohri. 

“They’re looking at labor management, communication, compliance store tasks, store audits, and using digital tools to simplify, as well as standardize those activities,” Ohri said. “So things that used to take 11 to 13 hours to do are now taking eight hours to do.”

A unique approach to store management technology is Lowe’s digital twin store. In September, the home improvement retailer announced it was experimenting with a digital replica of a store where associates can interact with and visualize store data. The concept was first introduced to two locations and allows associates to use augmented reality headsets for a variety of tasks, such as viewing items available on higher shelves instead of needing to climb a ladder.

4. Fitting room enhancements

Plenty of brands have experimented this year with enhancing the fitting room experience.

H&M started using a smart mirror in some COS stores in May, where customers can get personalized styling recommendations from the mirror as it senses what products — including their size and color — shoppers brought in. Customers can request new items to be sent to their dressing room without needing to leave the space. The retailer also started testing mirrors on the showroom floor that can assist with virtual try-ons, as well as returns.

Similarly, Savage x Fenty opened its first store in Las Vegas this January, which has fitting rooms with digital kiosks that shoppers can use to scan products to check prices and see similar items. 

This approach might be considered a way to free up associate time. However, it might not be that simple despite its increased adoption.

“I don’t see virtual fitting rooms work as well as we can always want them to work,” Ohri said. “I find that anyone who’s ever deployed them … they will tell you that the number of associate activities actually didn’t go down. Because first, consumers need to learn how to use that tablet, because it’s usually not as intuitive. Second, they need help with the products that they have anyway. And third, they’re kind of really concerned about the data and the privacy. So it actually has increased associated tasks at store rather than reduce them.”

This article was written by Dani James from Retail Dive and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to legal@industrydive.com.

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