Back in the day, while I was growing up in the 80s, retail landscape was vastly different from what it is today. That was the time when retail was bounded by geographical constraints and variety was the USP of retailers. You walked into a store, pointed at things and the man behind the counter served you. There was discoverability for the customer, but filtered through the sales person. It worked in its own way.
Sometime between my childhood and adulthood, I blinked and the retail scenario changed completely. Retail, as we know today, has evolved since the days of supply driven market. Today, it is not only driven by demand, but convenience too. What retailers offer isn’t enough; it’s also about how they offer it. It’s all about the consumer’s need and how it influences their buying decisions. With the advent of newer technologies, newer business models and predictive analytics the retail process is on the verge of a paradigm shift.
Retail industry has been in a constant flux as the focus shifted from brick and mortar stores to the internet business models. Amazon happened, smartphones happened, conspicuous consumerism happened. For the last decade, we’ve all travelled the riptide of online businesses boom. We got click-happy. Online businesses have succeeded for many reasons, one of them being the ‘legacy’ of brick and mortar retail. This legacy of brand trust and association, which has been cultivated for decades by companies, came in handy when consumers decided to cut the line and simply order online. The companies knew their customers, and vice versa.
But now that the markets have opened up completely, newer businesses, which do not have the luxury of legacy, find themselves on the back foot. The demand and supply are in place, but the buying decisions have hit a blind spot. We haven’t interacted with these products, haven’t made a tangible connection with them yet. And therein lays the conundrum. It’s a risk. The distinct feature of physical retail space is conducive to making purchase decisions, which is sorely lacking in the internet models of business. The retail industry has caught on to this. With the arrival of stores like Amazon Go, the emergence of click and mortar model has come full circle. Amazon Go allows customers to scan their smartphone as they enter the store, pick up the products they want, and leave. Computer vision, sensor fusion, and deep learning technologies automatically detect when products are taken from or returned to shelves and keep track of items in a virtual cart. After consumers leave the store, they are charged and sent an automatic receipt. All customers need is a smartphone, an Amazon account, and the Amazon Go app.
Where is retail headed?
I think that the click only model isn’t sustainable on its own because retail is all about tangibility. The consumer needs to form an association with the product, experience it, and evaluate it. The future of retail will be integration of physical space with the technology to make the experience seamless for the customer. The retailers will move on to not only offering the merchandise, but an experience as well. It’s possible that some retail formats would exist in virtual space only, but consumer durables market will definitely see an upgraded integration with retail tech.
I envision a retail experience that will make it worth my while to make the trip to the store. Our phones will be integrated with the retail space; will act as a personal assistant, make suggestions and give in-depth information of the product (much like how it is online). Logistics will move from ‘seek-buy’ to ‘seek-buy-deliver’. The stores would be digitized to offer the most compelling experience to the customer. Robots will take on the more repetitive tasks, freeing up staff to offer more expert and personalised advice. Stores will become more like a showroom for people to discover and try new products. We’ll also see the emergence of ‘mass personalisation’– it is about understanding who our customer is, what they would like to buy and how they would like to buy it, it will be about making our customer’s shopping experience completely unique.
We might also see growing trend towards brand partnerships – for example womenswear brand Argent is selling its clothes at a co-working space in San Francisco – the store of the future might be around capturing customers in other spaces they already exist in.
When it comes to the future of retail, I’m convinced that stores will take centre stage once again. But the way these physical stores operate and service their customers will change; it’ll be about a seamless merge of a fantastic physical experience with powerful, yet subtle technology. In another two decades, it might be impossible for us to make a distinction between physical and digital. There may be a time when one would wonder about the ‘once upon a time’ stores that did not have a digital point of access, or the websites that did not have a physical outlet.
Brick, meet Click. You’re made for each other.