We all know — and keep hearing almost ad nauseam — all about how the rise of online shopping is changing the very face of the retail industry and consumer habits.
But what is that “changing face of retail” actually going to look like in a few years? Will consumers still shop at brick-and-mortar stores? How influential will mobile and social media be to their purchasing habits? And who will these increasingly web-savvy consumers be, and where will they be located?
A new study from PricewaterhouseCoopers, entitled “Understanding How U.S. Online Shoppers Are Reshaping The Retail Experience,” attempts to forecast just exactly what retail might look like come 2020.
“Today, global retailers have a huge opportunity to enhance the experiences necessary to stay ahead of shoppers who are demanding more customization in terms of product choice, delivery, return policies and the number of retail channels for shopping,” according to the PwC report.
First and foremost, think that, by 2020, retailers (at least the successful ones) will have “fully embraced” the use of digital technology. You’re starting to see this more and more now with a lot of successful brands and retailers as they grow out or place more emphasis on omnichannel.
By 2020, PwC predicts that retailers and brands will be experts in mining customer data so that they better understand purchasing behavior, social media channels will be stronger and more intricately woven into the brand and “two-way” communication channels between retailers and consumers will be fully leveraged.
Social media will also be a much more interactive and influential part of the consumer experience, which you are already starting to see with retailers experimenting with augmented or virtual reality that allows customers to “try on” products and share them on their social media channels so friends and family can give them feedback. Fab, the home furnishings and fashion accessories online retailer, is one of the companies already experimenting with this technology by developing an app that allows customers to “visualize” firsthand how a piece of artwork or home furnishings might look in their homes.
Brands and stores will become more “inspirational,” which you will see through more flagship stores or stores that offer a unique, one-of-a-kind shopping experience. Apple’s showroom stores have been ahead of this curve for years, but more and more brands now seem to be realizing this and opening up similar “experience” stores, like the new Dyson Demo store in London that lets customers experiment with vacuuming up dirt or the soon-to-be-opened NFL Experience in Times Square that, quite literally, tries to give consumers the closest thing they can get to an NFL experience without actually strapping on a helmet and set of shoulder pads and running out on the gridiron come Sunday.
These “inspirational” stores of the future will be “more prevalent in retail, emphasizing loyalty, excitement and innovation through highly knowledgeable staff, a high level of service and state-of-the-art interactive experiences that allow the consumers to see, touch and feel the products,” according to PwC.
The grocery store and the department store are also expected to undergo significant changes in the next few years.
“The grocery retail business model will emphasize convenience, range and efficiency and will be based on a combination of small, ultra-convenient outlets throughout each market and larger mega-stores in large population hubs,” according to PwC.
You are already starting to see this trend, too, in the stratification of the grocery store business and chains like Walmart and Whole Foods trying to capitalize on this by opening up new, smaller stores that offer items at lower price points in targeted locations as a way to appeal to new customers.
The traditional department store will also “evolve” over the next few years into a retailer “fronted by a small number of strategically placed destination showrooms, which will showcase only the best-in-class items but will also be able to arrange extremely swift and efficient delivery through online channels at the customer’s preference.”
Much of the growth in the future is expected to come from emerging markets, where a “burgeoning middle class” is eager to support the growth of multichannel shopping platforms, which will fuel “innovations and new products that will flow back to the developed market.”
In its study, PwC said that a whopping 62 percent of Chinese consumers surveyed identified themselves as “confident” online shoppers, who could easily find the best deals when shopping online, and another 24 percent described themselves as “experts” in this category, compared to 47 percent of American consumers who considered themselves “confident” online shoppers and another 25 percent who called themselves “experts.”
The study emphasized the need for retailers and brands to be “adaptive and agile with today’s digital technology and for them to embrace organizational structures that support multichannel sales, to offer a seamless — not siloed — multichannel shopping experience.”
Smart brands and retailers have already started to figure this out and are shifting their businesses in those directions; for those that don’t figure it out, the face of retail could look significantly different come 2020.