What's in store: 5 ways retail will change in 2020
It’s predictions season.
This year’s forecasts carry the extra burden of looking ahead to both a new year and a new decade.
That said, it’s not so hard to make predictions in this fast-changing retail industry. The real challenge is making forecasts that are actionable. That’s what I try to do here, with 2020 predictions on topics from e-commerce to health care. Some of my points are curated from other industry forecasts, and I’ve credited those accordingly.
1. Technology Transforms
Technology advances will bring about more unique consumer experiences, from stores to homes. Especially on the radar now will be advances from augmented reality, or AR, and 5G technologies, as Nielsen states in its forecasts for 2020. One result, as Nielsen pointed out, is that “try-before-you-buy will come into consumers’ homes.”
Retailers need to be ready for all the impacts of these technologies. For example, the in-home trial phenomenon will give new meaning to the concept of sampling, and smartphones will become more useful in-store tools as consumers shop.
2. E-commerce on Steroids
Consumers are ramping up their expectations about the speed of product deliveries, now insisting on one-day or same-day delivery service, and even within hours. These expectations are fueled by strategies from players ranging from Amazon to Uber Eats, as noted in an August Forbes piece by Daniel Newman of CMO Network.
All this puts huge pressures on retailers trying to meet customer needs. Retailers should ask themselves essential questions: Will customers pay for the extra services? If not, do we need to make these investments anyway just to remain competitive?
3. Sustainability Grows Up
Consumers are demanding more sustainable products, and this trend has moved well past fad status. A few months ago, I wrote in DSN about how such retailers as Kroger and Walmart are stepping up sustainability efforts on the food side, making it more central to their missions and communications.
Likewise, sustainability now is a bigger deal on the beauty side, as well as a driver for trial and brand switching, according to a September Forbes article by Pamela Danziger. The sustainability stakes in 2020 for retailers will become greater because it’s their younger customers who are the most insistent.
4. Health Care Accelerates
Retailers have made large commitments to in-store health care, from pharmacies to clinics. A recent DSN article outlined stepped up retailer commitments to in-store services, ranging from optical to lab work.
Many retailers further will need to accelerate and upgrade such efforts in the coming year or two because retail is on the front lines of making health services more available. Walmart’s recent launch of its “Pharmacy of the Future” pilot is a great example of how to combine technology, services and customer experience into a meaningful effort.
5. Physical Gets Experiential
By now, it shouldn’t surprise anyone that e-commerce is changing the future of brick-and-mortar retail. In some cases, that will mean fewer stores, but just as important is how in-store strategies will change. Shoppers still want physical stores, but increasingly they want different experiences than before. We’re already seeing new store sizes, layouts and personalized retail approaches.
But here’s the thing, no retailer has yet cracked the code on what brick-and-mortar retail will need to look like. It’s probable 2020 will bring new and innovative lessons for how in store can transform in the age of e-commerce.
One last point: Predictions don’t help if they aren’t actionable. Retailers can take action on each of the five points I’ve made here. This can lead to competitive advantages in the quickly transforming retail arena.