The main talking point of retail in 2019 remained the transformation of the industry, as e-commerce continues to grow and store-based retail shrinks. The latest research suggests that globally, e-commerce will account for 30 per cent of total retail sales by 2024. It’s important to remember that while this is a number on the rise, it highlights that in-store retail is not going anywhere, it is that its role is changing in the eyes of consumers and retailers need to continue to adapt to this to survive and flourish.
Professional services network company Deloitte has recommended some critical steps retailers should follow as we move through 2020. They suggest that retailers ‘Make it convenient’ because with the convergence of supply chain, digital technologies and other innovations, convenience is becoming a much more important piece of the equation. They suggest retailers adopt smart merchandising strategies, such as creating micro-brands aligned to specific lifestyle needs of shoppers and augmenting product available with resale.
Other suggestions include ‘Create the store of the future – now’, a point that retailers must provide the type of brick-and-mortar experience modern customers desire. This can include localised inventories, in-store automation, and equipping associates with concierge apps that combine real-time online access to products and information with human customer service. Finally, Deloitte suggest that companies should ‘Digitally enable the enterprise’, saying that a personalised experience, highly interactive engagement, and convenience in all shapes and forms require superior digital capabilities.
In 2020, retailers need to consider implementing leading-edge technologies such as augmented reality (AR), virtual reality (VR), and 5G network technology anywhere in the enterprise they can help improve operational efficiency or enhance the customer experience. While the majority of sales still happen in physical stores, customer expectations are increasingly being set by the experiences they have online. There’s a huge opportunity for brands and retailers to bring these standards to the offline world in the right way.
Green Room’s ‘Retail Trends 2020 Report’ suggests that as we move into 2020, we’re likely to see more retailer marketing activities becoming truly responsive, and in real-time, many activities will be driven by AI. Aside from its ability to improve customer interactions, AI will also help businesses in targeting new audiences across social media platforms. Research from ‘The Future 100’ report by Wunderman Thompson Intelligence shows some of the key trends in 2020 to be the following: Ethical edits – Online luxury marketplaces are elevating ethics as well as aesthetics when curating their collections.
Anti-excess consumerism – As scepticism of influencers and awareness of environmental damage rise, shoppers are consciously stepping back from the ledge of excess consumer culture. AR(etail) – Retail experiences are being reimagined by advances in augmented reality (AR), creating new windows for discovery. Subscription goes east – Subscriptions are no longer just for news and gyms. The ecosystem for a subscribed life may be most advanced in Japan, where you can now subscribe to everything from bar drinks to hair and beauty treatments, cars, suits and even regular stays in charming rural homes. New shopping worlds – From streaming channels to virtual landscapes and games, immersive retail has reached new heights for the next generation of shoppers.
New beauty playgrounds – As experience culture cuts a swathe through retail, there’s perhaps no sector better suited to a hands-on moment than beauty. No matter how alluring a product might appear online, there’s no substitute for consumers being able to test out shades or try a new texture IRL. Uninterrupted commerce – From social media to search engines, consumers can shop just about anywhere online and the process is becoming more seamless than ever before.
Death of the luxury department store – A string of long-established big-name department stores has folded under staggering levels of debt and bankruptcy, which begs the question: what does the future of luxury retail look like? Next gen retail spaces – With much of their lives spent on social media, millennials regard design values as being of paramount importance—and they have high design expectations on behalf of their offspring too. The super-convenient superstore – Chinese grocery giants are diversifying, developing a hybrid retail model to appeal to a wider range of lifestyles.
Meanwhile, looking at the market from a development point of view, Colin Brooks, Managing Director of Realm commented: “Of all the property sectors, retail has experienced the highest levels of change in recent years. This year was no exception, and I highly doubt 2020 will see the pace of change slow. This has proven how outdated the UK’s approach to retail property asset management has become and how archaic it is in comparison to the more flexible models adopted but our European colleagues and in the outlet market.
As the world moves into a new decade of technological advancements and engagement opportunities, brands who will have the properties to truly prosper in the future are ones who recognise now that the best return on investment comes only from investing in genuine human relationships with their customers and keeping these strong in a modern world of technology.