Six predictions for the future of retail

Smart Supply Chains by 2030?

The rapid pace of change currently reshaping retail is expected to continue post-coronavirus, but in what way? Here’s what to expect in 2021, 2025 and 2030

The coronavirus pandemic has accelerated future retail trends as many businesses rapidly adopt new services and technologies. Small businesses have been forced to develop digital platforms, in-store payments have moved away from cash and orders delivered by drones no longer seem worlds away. So what will shopping look like in 2021, 2025 and 2030?

By 2021
1. Return of physical stores

“We will experience our own version of the Roaring 20s,” says Natalie Berg, retail analyst and founder of NBK Retail. While the coronavirus crisis has shuttered many high street stores and seen retailers and consumers flock to ecommerce, physical stores will be the focus again, but with a new emphasis, by late-2021. “We’re all craving to go into a store again,” says Berg.
While COVID-19 has undoubtedly accelerated the rise of ecommerce, there will always be a place for bricks-and-mortar retailing. However, Berg warns that mediocre 2020 players won’t survive the pandemic and are unlikely to return as traditional retailers.
“There will be fewer, but far better stores,” she predicts. The stores that thrive will need to tap into emotion, human connection, discovery and community. “Bricks-and-mortar retail will become a high-touch, sensory-driven experience,” she says. “There’s an opportunity for retailers to start innovating with the physical space again.”
Berg also says physical stores will need to become frictionless in more ways than one. This includes contactless payments, reducing physical touchpoints, and expanding and simplifying click and collect. “So, more convenient by using technology to reduce friction in-store and making it easier and quicker for customers to get in and get out,” she says.

2. Personalised offers

One of the key future retail trends, personalisation engines will become more sophisticated by the end of 2021. Data that feeds into personalisation will hone the ability for retailers to suggest offers and content to consumers right at the moment of consideration.
“In the old days, people visited local shopkeepers who knew them by name and could predict their needs based on what they wanted through a personal relationship,” says Riyadh Bhyat, head of Quantium in Europe, Middle East and Africa.
Bhyat says in 2020 some retailers are recreating that experience at scale using data-driven algorithms taking in hundreds of factors to drive hyper-personalised offers and service for national retailers. “2021 will point to the future when retailers will do your shopping for you,” he says.
“When you opt in as a customer, they’ll predict your needs and deliver them, thereby minimising search time. In fashion, this will extend to selecting items that perfectly fit you, based on the body scans you’ve shared.”
By late-2021, data will be integral to the way businesses hear the voice of consumers and understand customer expectations. “It allows them to engage the people they serve not as demographics or segments, but as individuals and at scale. Whoever does this best over the next decade in any given market will undoubtedly win,” says Bhyat.

By 2025
3. Blended retail experience

The 2020s will be a decade of disruption; COVID-19 was just the curtain opener. In 2025, we’ll still be experiencing the tail end of the pandemic in terms of its impact. “Hybrid working models, reduced business travel, commercial buildings at lower occupancy and discretionary spending will remain cautious,” says futurist Dr Richard Hames. Future retail trends will see “retail theatre” develop at this time.
By mid-decade, the conventional retail model of just hanging rows and rows of clothes on hangers and supplying a couple of changing rooms and a mirror will be on the way out. “A resurgence in shopping malls, offering a richer range of experiences by blending retail, music, dining and entertainment will take its place,” says Hames.
Development of partnerships between different retailers, from hairdressers and spas to clothing retailers and office supplies, will see ‘unlike’ providers collaborate as part of a blended retail experience.
Midway in the decade will also be an inflection point in ecommerce, according to retail analyst Berg. As the decade started, ecommerce was focused on reducing friction and aiming for a seamless experience, but it will move to being more engaging and immersive. Traditional retailers and online retailers will transition towards a convergence point. “Consumers have come to expect fast and free delivery and returns, and then post-COVID; it’s about immersion and discovery,” says Berg.

4. Customer expectations rule

In 2025, more retailers will tap into local communities, developing hyper-personalisation and hyper-localisation to attract consumers with suitable offers. The trend towards hyper-personalisation could see more retailers deliver a “white glove” service in a digital way to meet rising customer expectations.
“In lockdown, retailers have recognised the need to connect online consumers with in-store staff and this will become more of an opportunity to differentiate and develop customer loyalty through superior service,” says Berg.
Future retail trends will see stores evolve and follow the example of Starbucks and Nike to play three roles. These are as a transactional hub for immediate consumption, as an experiential venue and as a showroom to communicate about the brand and support online sales as ecommerce fulfilment points, according to Kanaiya Parekh, expert retail partner at Bain & Company.
Parekh predicts new digital solutions will enable retailers to meet rising customer expectations. Devices such as facial scanners will analyse skin to suggest personalised care based on individual needs and prior experiences. Virtual reality will enable customers to browse, interact with and read information about products in a virtual environment.
“Digital kiosks, powered by artificial intelligence (AI), at fast food restaurants, equipped with automated facial recognition, will let customers navigate the menu, self-order and use contactless payment,” says Parekh.

By 2030
5. Smart supply chains

Smart supply chains applying AI to predict demand and calculate supply will result in a direct benefit to the environment by 2030. “Stores used to be run by people who would gauge how much of each product they needed. Today there are deeply integrated systems managing stock replenishment, but these systems result in huge amounts of waste. Mountains of food and clothing get destroyed each year due to the difficulty of predicting what customers will want and when,” says Quantium’s Bhyat.
“In 2030, entire value chains will be aligned to accurate predictive models of consumer needs,” he says. Bhyat predicts retailers will gravitate to suppliers with value chains more responsive to consumer behaviour. “They will seek to collaborate with more progressive suppliers and potentially look to integrate supplier and customer AI capabilities,” he says.
“This kind of AI-to-AI integration will result in automated supplier-customer sales negotiations in closed business-to-business digital marketplaces and upstream integration with suppliers of raw materials and financing solutions.”
Instead of mountains of waste, data and AI will predict stock requirements, thereby limiting wastage and reducing the impact on the environment. And by 2030, retail in developed markets will have environmental issues embedded in it. “Customers will be able to understand and offset the carbon emissions of their retail spending through their bank,” says Bhyat.

6. Seamless shopping

Consumers will have seamless shopping experiences through social platforms in 2030, shrinking waiting time for customer service queries with smart chatbots and bringing highly personalised experiences through user-generated content.
Prompted by COVID-19 a decade earlier, which helped propel online retail towards true omnichannel social commerce, discrete sales channels will have dissolved. Highly immersive retail experiences will be provided by virtual and augmented reality. “In 2030, sales channels will include virtual reality and fulfilment will include drone delivery,” says Bhyat.
Brands will enable customers to move from offline to online, while providing a personalised experience. “Social commerce can combine the personal touch consumers used to find in a store with the convenience of an online purchase,” says Luis Baena, principal at Oliver Wyman.
“Consumers are increasingly using social media to engage with brands across the entire customer journey, from discovering new brands and products to writing reviews, comments and feedback.”
When it comes to the effect on future retail trends of social commerce, it will be a leveller between large brands and challenger brands. “Social commerce will increasingly become a powerful tool for small brands to access their well-targeted customer segments and make them able to compete with large brands,” says Baena.

About the author:
Rosalyn Page is an award-winning journalist covering tech, marketing, business and culture, with stories published in Which, HomeWork, CMO, Choice and specialist publications.

Source: www.raconteur.net   -30/11/2020 – Rosalyn Page