Customer habits are changing and retailers need to stay ahead of the game, says Richard Baker

During the heat of the festive trading season, future-gazing is not necessarily front of mind for harassed retailers.

Nevertheless, as we head into 2011 it’s the perfect opportunity to reflect on emerging trends for the coming year and make some predictions of my own. Given the tough and uncertain conditions, the focus for retailers will be on cutting waste, driving innovation and exploiting the increasing amount of information at our disposal.

In ecommerce, you ain’t seen nothing yet. As increased broadband usage makes the web more accessible and customers increasingly trust internet brands with their details, online browsing and purchasing will become even more widespread.

Asos is now a veteran of online retail and this year Boohoo.com and The Outnet reach have reached cult status among fashion fans. Each site profits from lower cost structures, displaying stock in an appealing way that people previously thought was only possible in-store.

What’s surprising is that customers are increasingly likely to make large and personal purchases on the internet, such as beds and furniture, whereas conventional thinking was that the preference would always be to see, touch and test these kinds of products before buying. The winners of the coming years will be websites that can recreate the environment or almost the theatre of in-store shopping online.

An increased demand for efficiency will mark the end of the previous scattergun approach of mass marketing to an anonymous consumer and all marketing will be direct marketing.

Retailers will need to undertake personalised and efficient targeting, strengthening loyalty and spend. Customer insight organisation LMG I&C’s ‘Coupons at till’ initiative with Sainsbury’s is one great example. To give ourselves a competitive edge, retailers need to know who their customers are and what they want by getting to grips with purchasing patterns, preferences and trends.

As budgets continue to be challenged, I would recommend retailers invest in more astute use of data and science in marketing to maximise the success. Justin King talked earlier in the year about “the haves and the have-nots” of data and I predict that soon all retailers will have to become ‘haves’, even those that have resisted so far. Retailers that understand the role data can play in their organisation will continue reaping the associated rewards.

Over the coming years, I expect retail spending to be robust and increasingly linked to the sustainability agenda, particularly with packaging. This will be more than an environmentalist issue as all consumers will question why they pay a premium for the presentation of their goods.

The opportunity is there for retailers that commit to this and strip needless packaging costs out of the supply chain, stopping their customers returning to the market stall for package-less value.

Times are still tough so rather than worrying about what we can’t control, we should focus on what we can change to drive efficiency within our businesses.

Richard Baker is chairman of the European advisory board of Groupe Aeroplan, operating partner at Advent International and chairman of DFS