For the past decade, retailers for the most part seem to have finally embraced online and all-channel commerce. The question is, are the days of going back to a brick-and-mortar store to browse through merchandise and shop behind us?
Today’s world of retailers are faced with a host of new and existing challenges. Even before the pandemic, many brick-and-mortar retailers were struggling. Though, Covid19 has only pushed this economic spiral, store closures and industry bankruptcies defining much of the shopping landscape and a time of reckoning for retail.
Technology has been re-setting the bar faster than most businesses can keep up, this is truer today than it has ever been. Retailers who remain to keep at a steady pace are no longer sufficient for success or survival, as this is evident in the public struggles of many high-profile retailers and famous brands.
In a world of economic uncertainty, the long-term outlook for buying and selling online is bright. So, if you are selling something, and plan to continue doing so for the foreseeable future, you’ll want to pay attention to ecommerce. Read our guide for more information.
In 2020, as high as 87% of UK households made online purchases within the preceding 12 months, making this the highest online purchase penetration rate in the country in the past 11 years.
Will that still be the case in 10 to 20 years from now? It seems most likely.
“By as early as 2033 the majority of our daily consumer will be transacted online” according to retail futurist Doug Stephens.
Ecommerce has overall, been trending in a positive direction since many users enjoy the convenience of purchasing online in the comfort of their own homes or as on-the-go activity. Besides this, many will still be reluctant to return to old ways post-pandemic.
The growth of ecommerce has not only changed the way customers shop, but also their expectations of how brands approach customer service, personalise communications, and give customers choices.
Retail does have a bright future, but the successful retailers of the future will be very different to today. As the next 10 years unfold, will we completely move away from retail stores and shop entirely online?
To view our complete predictions for what’s to come for the next decade in retail, click here.
The Adoption of Digital Technologies can Significantly Help Businesses
Technology will undoubtedly continue to play a major role in the future of retail. With the help of Big Data and AI, retail is proceeding to be much more hopeful.
Big data enables companies to generate a 360-degree view of their customers. Allowing many to create customer recommendations based on their purchase history, resulting in personalised shopping experiences, as well as forecasting trends and making strategic decisions based on market analysis.
Retailers are increasingly using big data to learn more about consumers, to know their exact needs, sizes, and preferences to automatically provide the products we need. For example, UK retailer Missguided uses big data to understand the quantity of clothes that they need to produce by utilising data on the level of interaction they see on their current site.
This ensures the retailer only manufactures the number of garments that they would sell, allowing them to reduce the number of unsold items, reducing waste, improving their environmental impact, and keeps profit margins as high as possible.
To read more about how big data benefits businesses, click here.
AR and VR also benefits online retailers and makes it possible to see items in our homes and on our bodies from the comfort of our own space. This means that instead of having to go to physical establishments to try on clothing or browse for the best item, we’re able to preview items virtually and then make the purchase from home once we’re satisfied.
New technology and more ecommerce options also opens the door to lower prices. Without having to support a brick-and-mortar store and more employees, many online stores can offer much lower prices. In the next 10 years, this may continue to grow and create a larger gap between in-store and online prices.
In the future, it could come to the point where shoppers move away entirely from the in-store shopping experience for less expensive and more convenient items.
What Mistakes are Retailers making with their stores?
Many retailers have been set in their ways of relying almost exclusively on paid media and advertising to drive consumers down the purchase funnel to physical stores to buy goods. Sadly, this was built to fail in the 21st century.
To survive, stores need a fundamental re-think to completely transform the shopping experience and to change the market the same way ecommerce did. Millennial and Gen-Z consumers are much more tech savvy than older generations, they have grown into the digital age with devices that always provide all round digital access. As a result, individuals are constantly pushing the boundaries of what to expect and what they are willing to share with brands.
The adoption of cutting-edge technologies will be one of the key factors that dictates which retail chains survive. Ecommerce is more personal, accessible, and data-driven than ever before. Online merchants can display more products, provide more accurate and robust product information, and transact seamlessly in one click.
As the industry evolves and consumers become increasingly technologically established, there is an opportunity for business professionals to make a profound impact on the future of online shopping and cater to their audience’s digitally driven shopping habits if they were to survive in physical establishments by blending platforms in-store.
The most likely scenario is a blend of these two ideas, the more integration between the physical and ecommerce spaces.
Physical Stores Can Be Reimagined via Digital Technology
Even with new technology, it is very possible that retail stores will survive. There is still a desire to physically look and touch items and try them on before you make a purchase.
Since the Millennial and Gen-Z generation will age, their buying power will increase, and these consumers will crave far more and better physical retail experiences.
In this instance, retailers need to implement more technology and data-centric solutions to stay ahead of the game. Those with an established and robust digital strategy have been better prepared to react to unpredictive behaviours.
The purpose of brick-and-mortar retailing will shift from transactional to primarily focusing on service and experience, as either showrooms, marketing platforms, loyalty building environments and brand experiences.
Retail stores that survive can move towards this experiential approach. For example, instead of endless aisles of products, physical stores can become more like showrooms that allow shoppers to touch and feel the products and have them delivered straight from the warehouse. These stores have less inventory but can still meet the needs of customers.
There is also the possibly of storefront windows to be used in conjunction with smartphone devices in the foreseeable future. Smartphone technology already enables the creation of digital experiences in the physical space and is being used to create animated content when aimed at QR codes or links.
Sports retailer Adidas had previously trialled this in Nuremberg. The display enables customers to manipulate life-size images of new products and drag them to digital shopping bags. The items then appear on mobile devices after users visit a URL and enter a one-off PIN login. The brand’s desire to target digital natives with store-front displays creates the integration between digital and real-world.
The Adoption of Omnichannel
As for the recent surge in digital and omnichannel adoption, a lot more retailers in every industry have been relying on technology already to keep their businesses afloat.
Omnichannel is built on multiple methods of promoting & distributing products. Therefore, improving customer service by providing multiple communication options that offers more flexibility as the consumer can seamlessly switch between channels throughout an interaction, enabling them to further reach out with problems or concerns using multiple channels.
The omnichannel consumer on average spends more than a single-channel shopper, encouraging a need for retailers to invest in blending platforms in-store. 82 % of customers consult their smartphone when making a purchase in a brick-and-mortar store. This fact alone provides a glimpse into the importance of omnichannel marketing & why brands need to make sure each of their own shopping channels work instantaneously with one another.
Businesses constantly need more & more options to fulfil the needs of what consumers want at a specific time.
The best way for a customer to perceive everything is to allow them to intentionally own their data & experience. By using retail data analytics to interpret online & instore shopping patterns, retailers can keep track & stay ahead of the shopper trends and can deliver the unique brand experiences that become their unique selling proposition, to better stand out from competitors, and to survive and thrive through uncertain change.
At Data Clarity, we have worked with retailers like Paul Smith to develop ClarityOmnivue – a full end-to-end data management and analytics solution that enables retailers to get to know their customers and offer personalised and relevant brand experiences to deliver value.
For more information on how ClarityOmnivue can be of benefit to your business, click here.
Final Thoughts: What Can We Expect in The Future?
Physical stores are going through a different but corresponding evolution. Brick-and-mortar retailers are no longer simply a channel for the distribution of products, and no longer act as the final point in the purchase funnel.
Technology will play a new role and allow customers to see and try items before they make a purchase. Basic needs could be met with subscriptions and automatic refills, and the rest of the leisure shopping could be done in an updated retail store.
As we are unsure about the presence and relevance of physical retail establishments in the future, customer experience will still transition in this uncertain future. No matter if we’re shopping in showrooms, virtual storefronts or picking out items at home, the experience will always make a difference.
At Data Clarity, we are on top of the challenges and opportunities this presents for retailers. We conduct data audits for organisations to highlight the current capabilities, strengths, weaknesses, and opportunities.
For more information, contact our experts today.