The future of retail: How the industry is changing in 2021: part 2
Evolving technology and an omnichannel revolution
Blending in-store and online retail experiences is the holy grail for today’s retailers. Superb advocates for companies embracing an omnichannel approach – a trend rapidly accelerated by the pandemic. The return to bricks and mortar won’t be as we know it. If technology improves, traditional retail will become a lot more of a browsing experience – somewhere to see the products and maybe take back returns.
A connected online-offline experience will require the development of sophisticated mobile and app experiences. Mobile apps are such a big opportunity for retailers. If you can get customers to use them, you can use push notifications rather than emails, meaning you have a direct connection and can merchandise to them.
This will be driven by data and if retailers have access to everything you’ve browsed online and in store, everything you’ve purchased in either location as well as when, why and any defining habits, they can introduce you to new products and make ever more relevant recommendations. Automation will become increasingly relevant and will be able to make instant trending decisions based on algorithms.
The most exciting part is using technology to enable merchandising. This could take the form of apps utilising GPS corridors and Bluetooth beacon technology, first trialed nearly a decade ago, to trigger notifications based on proximity. Here, the opportunity to highlight offers based on browsing history, send voucher codes, alert consumers to product availability or even help them navigate department stores are endless.
A better connected online/offline retail experience might also shape retail spaces themselves. Our client Boxpark is an interesting example of a marketplace model. It’s really expensive to have a retail store but if you could centralise distribution and have a smaller offering retailers could afford to have a Boxpark storefront in far more locations around the country.
Customers could go to collect products or browse lots of retailers’ offerings in one place, so you could provide that retail experience without the need for much inventory to be held there. And if centralised distribution can get to the level everyone was predicting it would in the next 10 years, they would potentially offer same-day delivery as well so customers could go in store and the items would be waiting for them when they get home.
Social growth and brand loyalty
For a glimpse of the near future, look to China, which is about five years ahead of the UK e-commerce market, with about 80% of all retail sales via mobile. What’s exciting about China is that all retailers push consumers towards using their apps, while adoption of social media and user-generated content is huge. Social networks such as WeChat also double up as retailers. Over here brands have to hire influencers and get them to work for you; over there people do it because they want social standing.
The predictions seem to point to a major shake up in the app market with Tiktok in particular as a growth area. Everyone talks about TikTok but up until now the sales experience has been pretty poor. I think we’ll see that change. Are we going to see brands asking people to start dancing with their products on? I can imagine we might. It only needs one brand to start running with these trends for it to evolve and TikTok would welcome the commercial opportunity.
A brighter future
For now, though, it’s likely that most innovation will be based around recovery and attempting to catch up with the audience. All of the workflow blockers that challenge us right now will force the direction of tech change. Many retailers need to increase agility by centralising product data with improvements to their ERPs and Product Information Management systems. Besides, the industry needs to become more carbon aware and prioritise employee wellbeing following the detrimental effect of the past year on people’s mental health.
Ultimately, a lot will depend on how our economy recovers, but we have to go with the cards we’ve been dealt: keeping stock levels low and reconsidering pricing to ensure a decent margin. Luckily we’re good at making stuff in this country – we have incredible brands and stuff that’s wanted worldwide.