What’s in store for the next 10 years of retail?
Retailing is a particularly dynamic industry, and in 100 years has changed from the butcher and baker ‘living over the shop’ via organised retail, self-service and big-box to today’s omni-channel. But what of the next 10 years – how will technology, innovation and the customer shape the future of the retail industry? Here are 11 likely developments:
- Hyperconnectedness As the internet of things exponentially increases, sensors and digital devices will be everywhere, including in our homes, as part of our clothing, and within our appliances.
- Genuine personalisation This will be driven by analytics from the data collected from our many devices and interactions. Within this, data privacy concerns will be well managed to create trust between consumers and retailers.
- Hyperconvenience Products and services will be increasingly available 24/7 on very short lead times, and food and foodservice boundaries will be increasingly blurred.
- Highly experiential Retailing for high consumer engagement items will be ‘high touch’, with strong product interaction, expert service and an ambience to match. Stores will become showrooms and store assistants will become shopper advocates.
- Auto-replenishment Routine purchases will be automatically ordered and delivered via subscription models, completed with simplicity and ease.
- Increasing automation There will be increasing use of robotics within the store and distribution network, which may include store and DC deliveries by autonomous vehicle, and intelligent store replenishment and checkout, such as Amazon Go.
- Well-trained employees A focus on training, educating and equipping employees will enable them to provide the great service and expertise the customer expects.
- Sustainable ‘last mile’ ecosystem This will be in place, with shared and green delivery networks, reduced and recycled packaging.
- Repurposed retail real estate Physical retail real estate will be repurposed for leisure and entertainment. This may mean that some secondary and tertiary shopping centres cease trading, with major implications for communities and local customers.
- Increasing impact of Artificial Intelligence AI chatbots are already replacing first line customer service, machine learning will improve forecasting and supply chain management, and it is likely that AI will replace many back office retail tasks.
- Changing employment models New models will incorporate freelancers (e.g. the Uber model) and customers as advocates.
So what should retailers do to embrace these developments?
Firstly, build a greater understanding of and connection to increasingly empowered consumers. It seems that few retailers have both a strong quantitative and qualitative understanding of their customers, and as the consumer innovates and changes more quickly this will become increasingly important. Consumers will expect even greater choice, convenience, control and service experience.
Secondly, rapidly adopt new technologies. In the last ten years, the retail CIO has moved from managing back of house systems to being a core driver of the customer experience. A strong technology team with great business leadership will become a major enabler of success in the future.
Thirdly, embrace new business models, such as the sharing economy, on-demand experience, and ‘do it for me’ services. As consumers migrate to these new models, retailers will need to move with them.
Fourthly, redefine and build the capabilities to enable these models, including advanced analytics and data management.
Fifthly, work with local and central government and retailing associations to help manage the societal impact of all these changes. It is likely that consumers and society will be increasingly concerned about the reduction of retail entry level jobs, fewer stores, fewer shopping centres and the environmental impact of home delivery.
For further reading on this topic, read Accenture’s report for the World Economic Forum at Davos – Shaping the Future of Retail for Consumer Industries.