A glance at the future of retail
Will physical shops cease to exist? Have we reached the end of online shopping in its current form? Are new technologies such as robots, drones, virtual and augmented reality taking over the shopping experience?
These are some of the many questions that gathered retailers at the 2017 RetailDetail Congress in Schelle (Belgium), the pinnacle of the retail industry calendar. This event definitely resulted in food for thought on what to consider as a retailer in the very near future.
The event’s message, and probably a relief for many retailers, is that online and offline shopping are not dead; onlife shopping – a shopping experience where online and offline shopping become one – is the new word to remember. New forms of economies – such as circular, platform, glocal – are emerging and this is also what Wijnand Jongen (CEO of Thuiswinkel.org) explains in his new book The end of online retail. The world of retail is changing and comes with many challenges. Business models no longer are what they used to be, new retail models are on the rise and monopsonies like Amazon are taking over.
Tweetaway: New retail models like monopsonies are shifting the retail environment http://insit.es/2qMzwHP by @BoelsLeen via @InSites #retail #RDC17
“So far Amazon has not tried to exploit consumers. In fact, it has systematically kept prices low, to reinforce its dominance. What it has done, instead, is use its market power to put a squeeze on publishers, in effect driving down the prices it pays for books. In economics jargon, Amazon is not, at least so far, acting like a monopolist, a dominant seller with the power to raise prices. Instead, it is acting as a ‘monopsonist’, a dominant buyer with the power to push prices down.”
Paul Krugman, New York Times, 2014
These new challenges require retailers to tune their business towards the new consumer journey. New technologies such as Amazon’s Dash Buttons, contactless payments, robots and even drones influence how people search, select, pay and even receive their goods. This growing technological layer around retail brings many opportunities for the shopping experience, both online as offline.
Tweetaway: Retailers need to embrace the changing consumer journey http://insit.es/2qMzwHP by @BoelsLeen via @InSites #retail #RDC17
Physical shopping will remain important as, like Doug Stephens (Retail Industry futurist) points out, nothing beats the dopamine rush that consumers get from shopping. The serendipitous discovery of new things still transcends all the proposed items consumers are bombarded with (e.g. the emotion of discovering a new song by sheer coincidence vs Spotify’s Discover Weekly). In fact, every medium is becoming a store and every store can be used as a medium. This implies a lot of possibilities and stresses the fact that the future of retail is all about selling experiences, not products.
“As a retailer, you have to ask yourself the question to what extent consumers would consider it worthwhile to take a selfie in your store. When they do, your store experience rocks!”
Doug Stephens, Retail Industry Futurist
But the question remains: how? At RetailDetail, Doug Stephens proposed the following 10 actions:
- Build a story, not a store
- Be less static and bring more products alive
- Engage more areas of the consumer brain
- Focus more on the community feeling, less on commerce
- Be more unique and change the script of how to buy things
- Be more personalized
- Focus more on inspiration, less on inventory
- Be less predictable and more surprising
- Focus less on conversion and more on creating converts
- Take out frictions such as no more queuing
Yet changing the mechanics is not enough. Retailers need to keep connecting with their costumer, this implies a profound knowledge of their behavior and journey, identifying the ‘moments of truth’ and fitting these seamlessly into their lives. While doing so, retailers should also measure the success of the experience. Sounds difficult, but it shouldn’t be. The best way to go, is by applying the reasoning of online metrics in offline shopping, i.e. using the reasoning behind clicks, click-through rates, search terms, searching time, time spent on the platform, etc. to evaluate the success of your experience.
Yet one thing is clear, in this changing environment retailers can’t just sit back and relax, they need to adjust and the moment is now.