Context-aware computing – technology that seamlessly blends different communication channels – is expected to have a big effect on how consumers spend their hard-earned money. Retailers can capitalize on changing shopping behaviors by preparing for them well in advance, helping them to stay ahead of the curve.

Speaking at the Gartner Symposium/ITxpo, analysts from the company forecast that context-aware technologies will affect $96 billion of annual consumer spending by 2015. As much as 15 percent of all payment card transactions will be made on the back of contextual information.

Over the next four years, consumers are expected to use context service providers more often. Nearly half of the globe's smartphone user base (40 percent) will subscribe to a service that tracks their activities. As Gartner notes, this comes out to approximately 720 million prospective consumers – 10 percent of the total global population.

"Context-aware computing is the method by which new experiences are constructed that blend information from mobile, social, digital and physical world sources," said William Clark, research vice president at Gartner. "The disruptions caused by context-aware computing will include major user, technology and business shifts."

Right now, there is a division between payments and activity – social platforms such as Facebook track social activities, but not payment trends. Meanwhile, credit card providers do the opposite. Mobile devices, which can be used for both services, are expected to be the harbinger of context-aware computing. Retailers need to take note of this trend now and devise strategies to capitalize on it when context-aware technologies become more prevalent.

"Enterprises can leverage context-aware computing to better target and deliver on the promise of increased customer intimacy for millions of consumers," Clark explained. "For CIOs, the timing of investment in context-aware computing will be critical."

As it stands, few retailers have felt the need to incorporate mobile devices into the shopping experience. While many have smartphone-optimized websites, that tends to be the extent of their mobile integration.

For example, Square recently noted that only 800,000 merchants used its hardware to accept credit card payments through smartphone, compared to the millions that used standard point-of-sale terminals. Additionally, few retailers have NFC devices in place that can be used with services such as Google Wallet.

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Retail stores using Twitter to promote their products and services will be able to get more value for their social media marketing efforts. The social site recently announced it would be extending its Promoted Tweets function to newsfeeds, InternetRetailer reports.

Previously, branded tweets would only appear if Twitter users searched for terms related to the company or if they followed it. Under the new system, Promoted Tweets could appear in a user's newsfeed, even if they didn't have any relevant interactions with that company before. The promotional tweet will still be identified as an advertisement.

"Impressions are free when a consumer retweets the message, and the microblogging service says that’s a good reason for marketers to make their messages engaging," InternetRetailer explains. "Twitter is slowly rolling out the new format. It says roughly a quarter of users will see Promoted Tweets in their Timelines today."

To date, there are more than 200 million Twitter users. This makes the social site an attractive advertising tool, regardless of whether businesses are trying to drive consumers to their ecommerce websites or into retail stores.

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Karen Katz, CEO of fashion designer and retailer Neiman Marcus, recently asserted that customers need to be the center of every action luxury retailers take to maximize the experience.

Neiman Marcus does this by engaging customers through a variety of channels. While some retailers would call this a multichannel shopping experience, Katz was quick to note that moniker doesn't accurately describe the company's approach. Instead, she terms it as having an "omni-channel presence."

"Omni-channel presence is delivering a much more seamless experience all across the board in one clear message," she told Luxury Daily. "It will deliver that message to [shoppers] anytime and anywhere [they] choose to experience Neiman Marcus."

Neiman Marcus first started engaging consumers through multiple brands after it realized 70 percent of shoppers research online before setting foot in a physical location. The company hopes to satisfy those consumers' needs at each step of the buying process, from research to purchase.

Consumers are doing more pre-purchase research now than ever before. This is partially because it's even easier to do now, thanks to mobile devices such as smartphones and tablets.

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Square, the manufacturer behind the dongle that enables smartphones to accept credit card payments, has seen significant growth in merchants using its hardware solution, FierceMobileContent reports.

Keith Rabois, chief operating officer at Square, says the payment system is now used by more than 800,000 merchants. While this trails significantly behind mass-market point-of-sale credit card terminals (MasterCard and Visa combined reach 8.2 million retailers), it is up nearly double from the 500,000 Square units used in May 2011.

Additionally, the company is processing nearly $2 billion per year through the hardware solution, further illustrating the growing prominence of mobile payments.

Rabois admits there are some troublesome aspects with the system – such as the $1,000 transaction cap for new merchants – but the company hopes to have those issues taken care of soon.

"We're not going to sleep until we improve the entire experience of buying and selling," Rabois said. "Every month we'll have improvements to the product."

Now, other tech companies are beginning to enter the quickly expanding market. For example, both Google and Moneris recently launched their own mobile payment solutions.

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Now more than ever, consumers are turning to the web to research products and services. Retailers can target these shoppers as they look for products on search engines through paid search advertisements.

Google has introduced a new feature, called Dynamic Search Ads, that makes it even easier for retailers to reach consumers with relevant advertisements. Traditionally, brands had to set predetermined ad copy and keywords to reach consumers, but the new feature can pull data dynamically from the retailer's website to generate up-to-date ads.

For example, if consumers searched for a specific shirt and retailers weren't using the feature, their ad would show up regardless of whether the item was in stock. The new function would disallow that ad from being shown if the shirt was out of stock, which would prevent consumers from visiting the site and then being disappointed.

The number of searches conducted by Americans each month continues to grow. Retailers can capitalize on this trend by leveraging paid search. More than 19.3 billion queries were performed by consumers in the month of September alone, according to comScore.

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Despite a stagnating economy, consumers are still planning to spend big this holiday season, a new Deloitte report notes. This bodes well for retailers, many of which had been stocking inventory cautiously in light of the high unemployment rates and rising commodity costs.

Despite the fact that two-thirds of Americans (67 percent) believe the economy will stay the same or weaken within the next year, 59 percent are putting these concerns aside as they do their 2011 holiday shopping. While this is a slight decline from 2010, it also marks an 8 percent improvement from 2009.

"Lackluster employment growth, debt crises and stock market fluctuations have battered consumer confidence while inflation left many with lighter wallets this fall," said Alison Paul, vice chairman at Deloitte. "Consumers will be conservative this holiday season, but remain resilient and maintain a more positive interest in holiday shopping."

With that in mind, it's crucial that retailers stock up for this holiday season. Nothing tarnishes brand allegiance like not having the gift consumers want ready for purchase.

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Consumers are increasingly browsing and making purchases from ecommerce websites, according to a new report from MarketLive.

In the three month quarter ending in September, online revenue among analyzed retailers was up 18.14 percent. Similarly, traffic to these websites marked a 15.95 percent improvement. As MarketLive suggested, this bodes well for retailers as they approach the busy holiday season.

"As the crucial holiday season approaches, merchants are once again poised for solid gains in online sales," the report notes. "Forecasters are predicting a 13.5 percent increase in online sales – slightly less robust than 2010, but still potentially a bright spot amidst what may be an otherwise tepid season."

MarketLive also found that cart abandonment has dropped over the past year from 62.25 percent to 61.48 percent, meaning fewer consumers are shopping but not finishing orders – another positive trend for retailers.

Abandoned shopping carts can be a key source of lost revenue for retailers. The Email Marketing Institute suggests sending emails to shoppers to remind them to complete purchases, but as few as 30 percent of retailers do that.

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Consumers earning an annual salary of $100,000 or less are paring down their holiday spending budgets, a new report from SymphonyIRI Group notes.

Nearly three-quarters of consumers (71 percent) who make less than $100,000 annually are trimming their spending this holiday season. Seventy-four percent of consumers plan to spend less than $800 in total.

With that said, these consumers are looking to shop early and take advantage of comparison shopping. Eight out of 10 respondents said they would be shopping online to save money, while 73 percent plan to begin before December 1.

"Consumers are going to shop for gifts that help make the holidays bright, but they are going to do so with an eye toward keeping costs down," said Susan Viamari, editor of Times & Trends at SymphonyIRI. "The internet is going to play a big role in helping consumers stick to their budgets."

Overall, the National Retail Federation expects spending to improve by 2.7 percent compared to last year. While this is half of the near 6 percent boost in shopping observed in 2010, it still bodes well for retailers.

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New legislation that is currently in circulation aims to collect more taxes from internet and catalog retailers. A new study suggests the move, if passed, could result in the creation of new jobs in the retail industry.

The study, conducted by the University of Cincinnati, found the legislation could create as many as 11,000 new jobs in the Ohio alone. The state has a local sales tax rate of 6.7 percent, but because online retailers don't need to collect that tax, Ohio loses upward of $200 million per year in tax revenue.

Retailers located in Ohio suggest the loss is even more severe because the lack of taxes make in-store purchases less expensive online, and this lost revenue affects retailers' ability to hire or expand.

"Given the difficult economic circumstances affecting Ohio's retail businesses and its state and local governments, finding a way to bring fairness to the online sales tax process would be a huge economic boon to the state," says Jeff Rexhausen, associate director of research at the University.

Employment is growing increasingly crucial during the holiday season, with many brands increasing staff levels to serve the influx of Christmas shoppers. 

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Despite the rampant growth in smartphone ownership over the past year, few retailers are choosing to engage mobile consumers, a new Retrevo study suggests.

Nearly half of smartphone owners have downloaded and used a retailer's application, showing some degree of interest in leveraging this software for making purchases. However, only 14 percent have actually bought products using these apps, which means retailers aren't using their mobile software in a way that encourages purchases.

"Retail industry experts unanimously agree that the mobile economy will revolutionize commerce over the next five years, but there is no indication that America's top merchants are even close to ready – or viewing mobile technology as a positive force that can be used to their advantage," the report notes.

According to separate data from comScore, more than 84 million Americans have smartphones – approximately one-third of the country's total mobile subscriber base. Nearly half of these users – 41.6 percent – have downloaded apps, which means retailers can gain access to a customer base of 42 million by simply having a downloadable app.

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