It’s an incredibly exciting time to be working in the retail industry. Ten years from now, consumers will look back and say: “Did shopping really look like that in 2019?”
It’s no different than looking back about a decade to the introduction of the smartphone, which has changed our lives in countless ways by making the internet available anytime, anywhere for just about anything. Or 10 years before that when we were still in the very early days of the internet, and cordless phones and portable CD players were all the rage.
It’s a Time of Great Opportunities and Challenges in Retail
Those organizations that lead the way with disruptive propositions will reap outsized rewards. But the effects of retail’s transformation will not be evenly distributed among today’s players. Some will successfully follow the leaders and secure key benefits, but many will fail to keep up and decline. Simply put, those that try to address exponential change with incremental innovation stand to lose the most.
To understand the magnitude of the coming changes in retail, it’s critical to take a long-term view — progress shouldn’t be measured only at specific points in time, such as year over year or one holiday season to the next. Why? Because it’s human nature to overestimate the change that should happen in short-term cycles and underestimate the change that will happen in longer-term cycles of 7-10 years or more. While it might seem that progress is always frustratingly slow, the reality is that retail is on track — like every other industry — to evolve fundamentally as we approach 2029.
Below we list 75 key ways we at Shoptalk see retail shifting — yet these capture only a small fraction of what’s changing in retail. We’ll address these themes plus more at Shoptalk through our many sessions and curated interactions.
The New Digital Retail Organization
1. Running a retail organization — whether digital or physical — will increasingly mean running a technology company, mandating changes in skill sets, hiring, culture and more.
2. New titles will emerge at the most senior levels of the organization that reflect the shift to a technology-driven organization, including more data scientists and AI experts.
3. The culture of retail organizations will shift as millennials move into leadership roles and Gen Z makes up a larger part of the workforce.
4. Digital expertise will be a hiring factor in every role across the organization.
5. There will be more moves between departments as employees look to improve their understanding of all aspects of the business.
6. Concerns over privacy and the use of customer data will create new roles in the retail organization.
The Transformation of the Retail Industry
7. The next generation of retail leaders will be more likely to hail from digital or startup backgrounds–and will be more female as well as more diverse.
8. Retail industry stalwarts will continue to go under, leaving opportunities open for retailers that have invested and adapted to meet changing consumer demands.
9. The retail real estate market will continue to evolve to feature smaller footprints, pre-built-out stores, and shorter-term leases.
10. Shopping center operators will offer far more digital in-store options to their tenants, providing less tech-savvy retailers with the ability to provide new services.
11. Marketplace offerings will only become more critical to retailers.
12. Rental and preowned options will increase as consumers regularly update looks for social media and as consumer attitudes toward ownership and sustainability change.
13. Chinese companies will remain at the forefront of global retail innovation, outpacing their American and European counterparts.
The New Era of Marketing ROI and Attribution
14. Marketing campaigns will adapt automatically to reach the right person in the right place at the right time.
15. The lines between social media and other forms of marketing will blur.
16. Paid, owned and earned media will all become just media.
17. Marketers will gain a new level of insight into the exact path to purchase.
18. Marketers will become more adept at measuring the value of influencers they work with.
19. Reaching consumers in-store or at point-of-purchase will become an increasingly important marketing campaign KPI.
20. Mass media campaigns — and mass media — will become less and less important.
21. Direct-to-consumer startups will look for new ways to scale as customer acquisition costs rise.
Next Generation Ecommerce and Omnichannel Retail
22. Pick-up options will become more diverse and widespread, and there will be greater focus on drive-through offerings.
23. Search results and customer service responses will increasingly be generated through natural language text and voice, and will nearly flawlessly match the intent and preferences of the shopper.
24. The returns process will be simplified, making it far less painful for retailers and consumers alike.
25. Technologies that enable shoppers to visualize products on their faces and bodies, and in their homes and gardens, will become table stakes in categories like beauty, apparel, furniture, home improvement and more.
26. Mobile-enabled shopping experiences will play a bigger role in stores as they allow shoppers to learn more about products and add them to their baskets.
27. Social networks’ e-commerce offerings will finally hit full stride, with buying options being seamlessly integrated into feeds.
28. Visual search will become widespread.
Technologies Creating New Retail Experiences
29. Every aspect of the store — from shopping carts to coolers — will become more intelligent.
30. Robots will become increasingly common in store aisles.
31. Digital shelves will proliferate.
32. Automated warehouses — combined with new pick-up and delivery options — will reduce fulfillment times, changing consumers’ definition of immediacy.
33. Facial recognition will be even more widely used to identify shoppers.
34. Consumers will expect personalized experiences both offline as well as online.
35. Shoppers will be less impacted by out-of-stocks as endless aisle capabilities and delivery options improve.
36. Cashierless checkout will become far more common, with scan-and-go or camera-based systems contributing to more frictionless retail experiences.
37. Augmented and mixed reality technologies will be used primarily for fun/experiential in-store applications, but also for navigation, promotions and product information.
38. Voice will be used far more extensively as a communication interface.
Leveraging AI and Machine Learning
39. Artificial intelligence and machine learning will be deployed across the supply chain, optimizing the most inefficient parts of retail.
40. Demand forecasting improvements will make DCs more efficient and reduce out-of-stocks at physical stores.
41. Serendipitous discovery will become more common as retailers and brands better predict which products and experiences will delight each shopper.
42. AI will help in-store staff give shoppers more relevant and useful guidance based on shopper preferences and past purchase information.
43. Shoppers will rely on AI to make product recommendations and will come to expect extremely relevant suggestions.
44. Brands and retailers will have a better understanding of shoppers’ intent and emotions, using optimized language and offers to create emotional responses from their customers.
45. Customer service and support will become much more helpful and proactive, alerting consumers before they are aware of problems.
Advances in Store Layout and Design
46. Stores will change their layouts in the era of cashierless checkout, with impulse purchases at checkout moving to strategically placed locations throughout the store.
47. Store success will be measured in experiences per-square-foot, as retailers leverage specific metrics like dwell time, engagement and social sharing.
48. A growing number of stores will evolve into showrooms for evaluating and selecting prior to ordering.
49. Stores will double as fulfillment centers, as sections are blocked off to shoppers and designated for filling online orders.
50. Experiential retail will continue to expand and evolve, but won’t be a replacement for products that meet customer demands for when and where they want them.
51. Retailers will no longer use cookie-cutter designs for their stores, but rather will customize each location for its specific market.
52. Shopper convenience will be key in new store layouts.
Improving Operational Efficiency
53. Shortened supply chains will mean faster access to cutting-edge products and design.
54. Robotics will handle repetitive human tasks like auditing store shelves, freeing up labor for more customer-facing tasks.
55. Self-driving cars and other autonomous vehicles will speed up customer deliveries.
56. Advances in scheduling and employee training tools will result in better customer service in stores.
57. Retailers will find ways to limit waste throughout the supply chain as consumers grow more concerned about sustainability.
58. Brands and retailers will look for sustainable packaging options to reduce their carbon footprint as ecommerce and delivery grows.
59. The supply chain will become increasingly transparent as consumers demand more information on where their products come from and how they’re produced.
60. Shuttered stores will be repurposed as warehouses and fulfill other parts of the supply chain as retailers push inventory closer to consumers.
Innovation Strategies for Brands and Retailers
61. Brands and retailers will strike unlikely partnerships with competitors to capture new consumers.
62. Successful direct-to-consumer startups will be highly sought-after as partners and acquisition targets for established retailers.
63. In-house startup accelerators/incubators will become a form of R&D for large brands.
64. Opportunities to innovate will spread to every role within retail organizations, empowering employees and creating more useful offerings based on insights from the field.
Building Brands for Today’s Consumers
65. New brands will go to market faster than ever before.
66. Brands will build out their direct relationships with shoppers and rely less on wholesale partners — at the same time, brands will value their best wholesale partners more than ever as the fastest way to scale.
67. Retailers will invest more in the development and marketing of their own private brands which will claim a larger share of shelf space and sales.
68. Brands will seek lucrative niche markets and deliver products tailored to them rather than the masses.
69. Brands will invest more and more to understand and meet the needs of Gen Z as they start to graduate from college.
70. At the same time, increasing life expectancies mean brands will need to pay attention to older generations who will be healthier and have new spending patterns.
71. Customers will play a bigger role in product design.
72. The number of new brands will increase at an even faster pace
73. Brands will create new products and experiences for a generation of health- and wellness-conscious consumers.
74. A growing number of brands will take a stance on social issues that are important to consumers.
75. Brands sold through retail will be evaluated for their potential to engage shoppers through experiences.
By bringing together the industry’s largest community of innovators and shaping an intellectually honest dialogue, Shoptalk plays a critical role in helping the broad ecosystem with its comprehensive agenda to Create the Future of Retail. We hope you’ll join us in Las Vegas in just over 10 days!