Greg Satell, author, Mapping Innovation: A Playbook for Navigating a Disruptive Age
In 2018, retailers are finally realising that e-commerce is not the enemy of bricks-and-mortar retail. The panic is dying down.
But it is important to acknowledge that the whole sector is undergoing a massive paradigm shift in which traditional principles of evolution apply: adapt or die. Brands and retailers will need to embrace seamless technology and reconsider the definition of a retail experience whatever the channel if they want to survive and thrive in this new landscape.
At our Retail Futures Forum 2018 we examined eight key macrotrends, including Digital Fit, Grocery AI-sles and Anti-showrooming, alongside our in-depth macrotrend Store-front Salvation. You can read a summary of the trends and insights below.
But if you want to survive the retail apocalypse, download our latest report, in which we provide the solutions that retailers need to implement if they want to survive and thrive in the future.
From taking the idea of the dollar store online to the rejection of big brands, retailers are exploring how they can democratise quality and bring premium products to the mass market.
One strategy is to use a direct-to-consumer model to make it more affordable to access items that were traditionally higher priced, such as organic food or products that are free from parabens.
‘[There is] a movement of real people who want to be treated fairly no matter what their economic status. It’s a movement of people who reject labels, legacy institutions and old ways of doing things.’
Tina Sharkey, co-founder, Brandless
Brands are increasingly creating experiential bricks-and-mortar offerings, but these creative, highly immersive environments have yet to be successfully replicated online.
E-commerce websites still tend to focus on features such as checkout and shopping basket functionality. But new design-centric retail platforms are emerging that enable a kind of digital escapism and increase page dwell time and the likelihood of a purchase.
In a US survey, 66% of 13–17-year-olds said they view brands that experiment with new ways to sell or deliver as innovative.
Source: Ypulse
With convenience a key priority for consumers, brands are exploring the potential of dynamic selling spaces in non-traditional locations. Start-up Cargo, for instance, is turning taxis into moving retail spaces, enabling Uber drivers to sell snacks, phone chargers and beauty products to passengers.
75% of British adults say that corner shops’ opening hours make it easier to fit shopping into their daily schedule.
Source: Mintel
New digital tools are helping to refine sizing options for shoppers buying fashion online. Solutions are varied, with Israeli start-up MySize showing how an iPhone’s accelerometer could be one way to capture accurate body measurements. Japanese fashion brand Start Today offers its customers a sensor-laden smart suit that captures 15,000 body measurements. This allows itse-commerce customers to determine their exact size before buying pieces online.
£251bn ($351bn, €288bn) The amount US retailers lose in sales each year due to product returns.
Source: National Retail Federation
Grocery brands are increasingly considering the potential of robots to optimise their services. Automation is taking over menial tasks such as checking inventory and stock while in-store. For Walmart, handing over repeatable, predictable and manual tasks is seen as a way to free up human time. Similarly, Ocado’s warehouses have turned into automated centres that are completely run by AI and algorithms.
From our perspective, [this] improves your service to your customers and is trying to make things simpler and easier for your associates at the same time.’
John Crecelius, vice-president of central operations, Walmart
With consumers becoming used to showrooming – viewing an item in a store and then buying it online – physical retailers are having to reconsider how they can encourage in-store shopping. One strategy is to stop showrooming altogether. Following its purchase of Whole Foods Market, Amazon was granted a patent that would help the brand to stop shoppers using their phones to compare prices in stores.
In a recent study, 75% of shoppers said they prefer to shop in-store, if an item is available both online and in a nearby store.
Source: TimeTrade
Instead of being forced into a cycle of sales, some brands are adopting a more reactive approach to discounts.
In a US survey, 67% of consumers said they have made a purchase they weren’t originally planning to make solely based on finding a coupon or discount.
Source: RetailMeNot
Once considered obsolete, QR codes are making a comeback. The technology, which was created to instantly connect a mobile device to more information, never progressed beyond being a gimmick after it was launched in the 2000s. But recent applications by brands such as Amazon and Snapchat have shown the potential for QR code commerce. Amazon’s SmileCodes, for instance, allows mobile users to access exclusive offers.
‘For a solution almost considered obsolete, QR codes are getting a second life as a cost-effective and powerful link in our increasingly
Julie Vargas, director of digital solutions, Avery Dennison
If you’re
Lack of purpose and a fear of new technologies are leading to an unprecedented number of store closures. Too many retailers chose to take a scattergun approach to opening stores, with the aim of reaching far and wide rather than being more considered. But as more digital-only brands open bricks-and-mortar locations, it is clear there is still hope for physical retail.
In a US survey, 56% of shoppers said they visit stores, at least occasionally, to see, touch and feel a product before buying it online.
Source: Retail Dive
In order to adapt their physical offering, retailers will have to combine the best technologies from e-commerce with the tactile, present quality of in-store browsing. They will need to invest in Software Support, create Click and Connect services and rethink their store layout to fit the many moods of shoppers who sway from desiring convenience to
‘The notion that physical retail is dead is just silly – the combination of digital and physical is most often what customers want and what yields the best financial results.’
Steven Dennis, president, SageBerry Consulting
As retailers embrace future stores that are not weighed down by
41% of consumers are happy for a retailer to monitor their shopping patterns.
Source: PwC
Help prepare your business for the changes ahead by downloading the Retail Futures 2018: Storefront Salvation Report now.
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