The new year is already around the corner with a number of innovative tendencies in the retail world. We are talking about a sector that evolves continuously and it seems to have no limits. But what will the future bring, with this new decade? The retail industry aims at augmented reality, at the instantaneousness and personalization of the customer’s experience, new tools, new concepts. The future is already here.
One of the most important aspects, the industry’s digitalization will continue to strengthen itself in 2020. It will no longer be an ‘end’ by itself but instead it will become a ‘means to an end’. The companies that had gone almost entirely to the digital side, now are going back to consider physical stores; even digital native companies (such as e-tailers) now are starting to bet on their own meeting point with clients.
A Business Insider study points out that 74% of these kind of companies, for items such as clothes, accessories, furniture and household appliances, are going to quit being exclusively digital in the next few years.
Retail’s revival to physical stores comes with an interesting twist. This is understanding the point of sale as a factory of experiences and entertainment in order to capture the client’s attention in every sense.
For instance, in China, the biggest retail market in the world (selling more than five trillion dollars in 2019, according to eMarketer), the in-store experiences are ranked as the most impactful ones among the 90% of young consumers (McKinsey & Company, ‘China Luxury Report 2019’). And they have even taken the term ‘retailtainment’ to whole other level. Nowadays it’s easy to see how something that is working so well in a country like China can set a trend in the rest of the world.
Accordingly it’s proven that also in the United States, Millenials spend a 30% more per month than older people regarding to these retail entertainment experiences. Brands have not missed this opportunity, with a lot of examples all over the United States and Europe; but also gradually entering Latin America, mainly at commercial malls in countries like Chile and Colombia, or the recent Dufry’s New Generation Store opened at Ezeiza International Airport, in Buenos Aires, Argentina.
The importance of today
What at first looks like a self-help quote is something basically important for the retail sector. In fact, PWC studies show that 88% of consumers are inclined to pay more money in exchange for faster (or same day) shipments. And this waiting time is getting shorter by the minute. Undoubtedly, a clear challenge to have in mind: on the spot.
Here is where some other important elements for the retail’s new decade come into play. 5G connectivity will allow a more fluent experience for in-store customers (through augmented reality) at the time of receiving information about products, analyzing and comparing them; and for retail companies which will obtain real time data about their clients, all at maximum speed.
And now’s the time to go back and talk about omnichannel. With Artificial Intelligence as the main character, companies will have to be able to prepare and send orders from anywhere at any time. Robotics in the production and distribution, chatbots to communicate with clients, and moreover, smart speakers that have come to stay. According to Gartner, at least 30% of online searches won’t be through the screen in 2020 but by other technologies such as voice search.
The future of retail is just beginning, constantly adapting to its client’s needs. It’s expected that there’ll be more than 2.14 billion of digital buyers by 2021. And that, only in the US, retail sales will generate around 740 billion dollars in revenue by 2023, that’s 200 billion more than back in 2018. The question is: what is your company waiting for to join this new retail generation?