Forecasting the future of retail
This article was originally published on InternetRetailing.net.
Who better to predict what lies ahead for retail than the stars of the UK’s leading multichannel retail event? We asked speakers at IRC 2019 for their retail predictions for the next five to ten years. This is what they told us.
THE ROLE OF THE CUSTOMER
Customers will continue to take the lead, says Stuart Heffernan, head of business at Pernod Ricard UK. “Shoppers will find new ways to challenge retailers,” he says, “and those that don’t listen and proactively change to meet shopper needs and/or think long term then they will struggle.”
Chloe Thomas, founder of eCommerce Masterplan, says retailers will need to develop strong connections with those who buy from them in coming years. “I think things will continue to shift in how consumers choose to shop and the experience they expect via different channels. Keeping up with and responding to that is going to be an exciting challenge. The retailers who win will be those with the strongest connection with their customers, which suggests it might be the direct-to-consumer and manufacturer brands who do the best, but I think there’s still plenty of space for a great curated range.”THE CHANGING BALANCE BETWEEN ONLINE AND THE STORE
Speakers working in retail categories from toys to footwear see shoppers making more of their purchases online in the future, while shops evolve into showrooms where customers go for the experience . Lucy Shamdasani, VP, head of engagement technology and analytics at Lego Group, says: “Online channels will become more important and generate more revenue than physical retail stores for most retailers. There’ll be a widespread move to marketplace ecosystems for online retail, while physical stores will become much more experience-focused with the purchase less important.”
“I think the role of a multi-brand retailer will change hugely,” says Ashley Hubbard, ecommerce manager at Grenson Shoes. “They feel like expensive businesses to run with a model based on a limited margin that I don’t see fundamentally changing anytime soon. It’s not all negative however. The death of the high street has also led to the growth of brands selling direct to consumer which is a fantastic environment and an opportunity for the entrepreneurial thinkers out there that I think will continue to grow as tech becomes an enabler to making this simpler. Retail is an indicator of social and economic behaviour change to me.”
Hubbard says that while some products more easily lend themselves to buying online, shoppers will want to see larger and more expensive items for themselves – and that’s where retail theatre and experience-based shopping can be most relevant. “Not everything needs the same treatment,” he says. “I think the merging of social media and shopping will continue. Before long I can see Instagram being a shopping channel based on the early brand adopters in this space already offering shoppable content. Again, this is an experience being delivered to the consumer but without the need to go anywhere near bricks and mortar retail.”AUTOMATION IN DELIVERY
Automation will start to be used in delivery, according to two of our speakers. Stephen Honight, global ecommerce and performance marketing lead at Pukka Herbs, says: “Driverless vehicles will significantly reduce delivery costs and unlock new ecommerce business models in CPG.”
Meanwhile Chris Conway, head of ecommerce at The Co-operative Group, says: "My best guess would be an increased move to automation, especially around delivery and last mile operations.
The use of technology in store is also likely to increase, not just to save costs but to improve the experience for customers as new generations of customers grow up and expectations change.”RETAILER PARTNERSHIPS
Robin Phillips, previously of Boots and Waitrose and now chief executive of Watch Shop, says the benefits of working together will become a new theme for ecommerce and multichannel retailers.
“I think we’ll see a lot more partnerships and I don’t just mean retail partnerships but partnerships between retailers, technology providers, fulfilment providers, data providers, because I don’t think most retailers can afford or have the bandwidth to think about all those things. I think you’ll see people concentrating on what they’re expert at, their brand or product, and looking to other experts as partners to make sure that overall you can compete against the likes of Amazon.”
One example of how that might work is around data partners to make sure personalisation works well. “We have to be careful about respecting the sanctity of privacy and data,” says Phillips, “but I think increasingly you’ll see customers giving permission to share some of their data with a combination of retailers, mobile operators, shopping centres, individual stores who’ll work together to provide a more personalised and rewarding experience through sharing that data – a value exchange with the customer.” Indeed, Watch Shop itself is becoming a B2B partner by working with brands that want to outsource retailing, fulfilment and stock holding. It’s already providing drop shipping services to Goldsmiths and is looking to expand on that.THE RISE OF SUSTAINABLE BUSINESSES
Stephen Dowling, vice president, digital growth, at Adidas predicts an “exponential decline” among “bad retail, bad retailers and bad customer service”.
He says: “Good retail, good service and good offerings will continue to prosper regardless of the channel. If and when the credit wave goes out, businesses built on featherweight and dubious consumer propositions will be seen to have their pants down.” Businesses that ensure they are sustainable will work in the long-term. “Sustainability and society will become part of the extended retail P&L as in consumers will brutally judge those who are either part of the solution or the problem.”
Polly McMaster, chief executive and co-founder of The Fold is thinking on similar lines. “Brands with a more agile approach and a stronger sense of purpose will flourish,” she said. “We are already seeing a wave of consumer change on everything from shopping habits, environmental awareness and inclusiveness. But with all of that, it always comes down to – are you selling product that a customer wants to buy?”
Hear from these and more speakers at IRC 2019, where they’ll be contributing to the debate on how to improve the customer experience and meet customer expectations at the same time.
IRC 2019 takes place on October 10 at the Business Design Centre in Islington, London. A full-price retailer delegate ticket costs £495, but as an InternetRetailing reader we can offer you 75% off full price tickets if you use discount code IRMSEB100 (for retailers only). Vendors can get up to 20% off full price tickets by using the discount code IRMEBDP100.