What does the future of retail look like?
Anyone who’s ever indulged in a little ‘retail therapy’ knows that shopping can be an enjoyable experience. Sitting on your sofa and adding items to your virtual basket-while amazing in its own right-isn’t the same. Just as ordering a takeaway isn’t the same as going out to your favourite restaurant.
This idea that people still love physical retail is more than simply a hunch. As recently as last year, a study by the Office of National Statistics (ONS) found that, despite a stronger online presence, consumers are still spending most of their money in stores.
UK retailer, Argos is a great example of this. Despite being the UK’s 3rd most visited retail website after Amazon and eBay (receiving 1.2 billion hits annually), 80% of orders are fulfilled in-store. John Rogers, the CEO of Argos, puts this success down to “combining physical and digital propositions.”
A great option to look into to optimise your retail business and make sure your payment service is futureproof is to join with SumUp.Contact us
But what else can retail businesses do to draw people to their stores? What does the future of retail really look like?
We decided to ask experts in the industry for their opinion on the future of retail. Here’s what they had to say...
In the hyper-connected world of the future, convenience is set to become a need for customers rather than a want. According to Marc Gringras, the CEO of Foko Retail:
“The future of retail will revolve around offering customers the utmost convenience while creating memorable in-store experiences.“
Foko Retail is a visual communication and retail execution platform used by retailers like Whole Foods, Indigo, and Converse. The platform helps retailers to increase convenience for customers by streamlining internal communication to help employees give customers the best in-store experience possible.
Gingras elaborated on his view of increased convenience:
“Self-checkouts and scan-and-go (as Amazon is already doing with their Amazon Go convenience stores) will allow customers to move through stores seamlessly and leave their wallets at home thanks to the rise of mobile payment apps."
Amazon Go, set to open a London store later this year, gives us a glimpse of just how convenient retail stores of the future could be. Customers use the app to enter the store and then all items taken are detected by artificial intelligence. When a customer leaves with their shopping, their Amazon account is charged through the app. No checkouts. No queues.
Queues seem to be one of the biggest deterrents for customers of the future. According to Flore Dutron of Wishibam, a fashion and beauty app offering shopping assistance:
“Too often the customer will find that he waits too long to access fitting rooms or the cash registers. At a time when he is hyper-connected, he no longer accepts it and then turns to the Internet, even if he feels an attachment to the shop.”
Queue busting is becoming a priority for retailers who want to increase convenience, and mPOS readers are making this incredibly easy. Point of sale readers, like those offered by SumUp, can improve payment efficiency and reduce queueing time, especially if given to floor-staff in addition to cashiers. People can pay where they stand. You can’t ask for much more convenience than that.
The rise of A.I.
Whenever anyone mentions the future, talk of robots and other cyborg-like human replacements usually follows. But, according to Tobias Goebal of SparkCentral, it’s not something we should worry about:
“With Artificial Intelligence as an overarching new paradigm of software and technology, we are now in an age where computers are learning to ‘speak human’, vs. the other way around."
Chatbots have already revolutionised customer support and, as the technology continues to evolve, so will their ability. This will free up existing employees for more complicated tasks and help them to be more efficient.
The Marks & Spencers wardrobe inspiration service, Tuesday, connects customers with real stylists. But, before that, their chatbot gathers all of the important information from their style preferences to their body shape, size, and age.
When their (human) stylist is ready to step in, they already have all of the information they need and can concentrate on creating a personalised experience for the customer. This helps to improve efficiency and the customer experience as a whole because the stylist can pick outfits tailored to the customer’s preferences based on their answers to the quick and easy multiple-choice questionnaire.
Brands are already starting to embrace personalisation, and, according to Rick Watson, CEO & Founder of RMW Commerce Consulting, this is set to reach new heights in the future:
“Biomedical firms can build products that fit the unique chemistry of customers, customised on a per-order/per-customer basis. Gone are the days where a shampoo manufacturer sells one product to an entire market. Each item is customised for the chemistry of one shopper-particularly in beauty, baby, mothers, and other major consumer products. This might involve DNA, body scanning, mirrors, augmented reality, virtual reality, or all of the above.”
This prediction is based on Watson’s observations as a consultant for commerce businesses. Retailers like Thryve (a probiotic supplement) and Prose (custom hair care) are already creating products that are personalised to the needs of individual customers.
An A.I. stylist called Trendy Butler (think M&S’s Tuesday, but for men and without the human element) is able to pick out clothes for customers based on their personalities and lifestyles.
In the future, we could see this personalisation going to the next level. Instead of quizzes, personalisation could come directly from our DNA.
How much cash do you have on you right now? You don’t have to tell us (it’s not the most polite question to ask, after all), but chances are it’s not a lot. With mobile payments and contactless cards, nobody carries cash anymore.
According to James Henry, Head of Sales & Partnerships at SumUp:
“The future of retail is about creating the most seamless and interactive buyer experience to further drive customer retention. We’re seeing today the merging of in-person and online shopping and foresee a shift to a more consultative and personalised sales approach with each customer.“
Customers are becoming less patient when shopping in-store. By equipping your store associates with card readers, like those provided by SumUp, you can make purchasing more convenient for your customers and eliminate queues. A great way to equip your retail business for the future is to look into a partnership with SumUp.Find out more
Increase in transparency
Customers are becoming more aware of who they give their money to and the businesses that they support. According to Carlos Castelán, Managing Director of retail consultancy firm, The Navio Group:
“Product transparency and sustainability is increasingly important to customers and a trend we saw continuing to grow in 2019. Customers want to know how products are being sourced, what ingredients they contain, and a view into the supply chain. As an example, RX Bar, a protein snack bar made with healthy ingredients, became popular because of the simplicity of the product and having transparent labels that highlighted the bars’ limited ingredients on their packaging.
Other brands from food to apparel are starting to do the same to highlight sourcing practices and provide transparency into their supply chain.”
Doing good is great, but putting it out there as part of your branding is better. This level of transparency is going to attract conscious customers. And it’s not just food companies that can benefit from transparency. Apparel brand, Patagonia are well-known for their environmental efforts. This includes everything from creating sustainable clothing, to working with environmental action groups all over the globe.
Shopping with ethics in mind is something younger consumers are driving, so we can predict that this will continue into the future. According to the not-for-profit consultancy Ethical Consumer, the sector for ethical products and services in the UK has grown by more than £40 billion in the past ten years.
Same-day delivery is already a possibility, but it’s unlikely that speedy shipping will stop there. In the future, delivery time will shrink further and further as retailers battle to outdo one another. Rick Watson, CEO & Founder of RMW Commerce Consulting predicts:
“Any product in the world delivered in less than 2 hours will be the new standard. This will create a whole new view of commerce if you can order something as you leave work and by the time you're home, the product is also there.”
It’s hard to picture a future as convenient as this, but some companies are already on their way to making it happen. Amazon launched ‘Prime Air’ a couple of years ago, with their first drone delivery made back in 2016. Amazon plans to use drones to deliver packages under 5lb in less than 30 minutes. However, the company is struggling to get regulatory support to fly in certain countries.
Another company, Mole Solutions, has taken the opposite approach and is planning to utilise underground pipes to facilitate speedier deliveries. The Cambridge-based company wants to avoid congestion that would lead to delays in delivery and increased emissions. With London’s congestion currently costing more than £6 billion, this new delivery strategy could soon become the new norm.
An increase in A/R and V/R
Augmented reality (A/R) and virtual reality (V/R) have made vast advances in the past couple of years. A/R is the process of using a smartphone to view computer-generated imagery in the real world. V/R is similar but technology is used to create a fully simulated environment, rather than a superimposed one. Both technologies are starting to make their way into retail stores. On this topic, Beverly Friedmann of MyFoodSubscriptions says:
“We could see a more positive shift in retail via an integration of technology with more traditional shopping. We're seeing this already in stores like Sephora, who hire hundreds of workers but utilise clever in-house technologies (i.e. virtual makeup testing software apps) to keep their consumer base stimulated enough to keep coming back.”
Sephora’s Virtual Artist is an app that customers can download to virtually try on makeup and even complete looks put together by the Sephora team. Users can test make up on a model’s face or their own:
This smart use of tech is likely to increase customer satisfaction as well as sales.
“By integrating tech into retail stores, we can keep consumers that have become accustomed to constant virtual stimulation satisfied enough to continue shopping in-store.”
This prediction has already come to fruition in some stores, like Specsavers. The high street optician now uses tablets to collect facial measurements of customers before sending their frames off to be made.
A shift towards subscriptions
Subscription-based shopping is great for both customers and retailers. For retailers, it means a continuous, forecastable cash flow. And for customers, it means added convenience-and maybe a little surprise every now and then.
According to Cristina Arbelaez, co-founder of KAPUA Inc., subscription-based shopping is the future. She says:
“Think about it as utilities like energy and water, you only notice them when they are cut, but if the supply is there on an ongoing basis you don’t think about it."
From Arbelaez’s point of view, it’s all about making life easier for customers. For example, if those purchases we all make-salt, toilet paper etc.-were replenished automatically then our lives would be a lot easier.
But this prediction only really applies to ‘chore shopping’. Customers also shop for enjoyment, and subscriptions can play a part here, too.
Trendy Butler, the A.I. stylist mentioned above, delivers clothing to customers on a monthly basis. Every month customers receive a carefully curated outfit directly to their door.
This idea of signing up to receive a ‘monthly gift’ feeds into the “treat yourself” mentality of millennials. According to a 2018 Millennial Money Study, 86% of millennials said they treat themselves once a month.
Better in-store experiences
According to Marc Gingras of Foko Retail:
“[In the future], the physical experience will play a bigger role, as endless clothing racks and limitless items will no longer cut it for most customers. As anyone who’s witnessed the Instagram-worthy murals and moments in stores like Glossier, Guitar Center, and Starbucks Reserve can attest, there are few better ways to immerse a customer in a brand than by creating services and experiences that are worth sharing and talking about.”
Social media is becoming less about what we ate for breakfast and more about the brands we connect with and support. When customers have a great experience with a company, they love to shout about it on social media. And through this, social media influencers were born.
In the future, retail stores won’t just be giving special experiences to influencers, they’ll be giving them to everyone.
Kith is a high-end clothing boutique. But customers don’t just shop there for the clothing, they also grab ice creams and milkshakes from the in-store treats bar. One look at their mouth-watering menu and it’s easy to see why customers love shopping there.
Not only does this encourage people to shop with Kith and share their experience on social media, it also creates an extra revenue source for the company. So it’s a win-win-win.
Nobody can really say for sure what the future holds, but the experts we spoke to had some great predictions.
One thing seems certain, technology will have a place in the successful retail stores of the future.
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