Retailing will become more personalised, collaborative and socially-influenced in the future, according to new research by Planet Retail.

The report, titled ‘The Future of Retail: 10 Trends of Tomorrow’ and featuring case studies from retailers around the globe, warned that retailers should begin preparing themselves for another few years of significant structural change.

The future trends are fewer, but more impactful, stores; working together to stand apart; race for the most convenient store experience; personalisation to reach new heights; the end of points-based loyalty cards; power of the peer; cracking the final mile; death of pure-play; click and collect; and from one-click to no-click.

Natalie Berg, retail insights director and author of the report, said: “Retailing has undergone seismic shifts over the past five years and we believe that further fundamental changes are just around the corner.

“By 2020, we predict that shoppers will have to pay for home delivery, traditional points-based loyalty cards will become a thing of the past, pure-play retail will largely cease to exist and checkout-less stores will become a reality.

“A key theme across the 10 future trends is the need for collaboration. Retailers are finally beginning to recognise the benefits of working together both in bid for differentiation and providing a better service for the customer. We expect more retailers will join forces by 2020, primarily through instore concessions or collection points for online orders.”

Fulfilment

With regard to fulfilment of online orders, there is a growing disconnect between shopper expectations and retailer capabilities, said the report.

The competitive state of the sector has resulted in a proliferation of retail delivery services with lead times getting shorter and shorter. As a result, shoppers now expect delivery to be fast, reliable and – crucially – free, it said.

This is unsustainable, as the first signs of cracks in the system are being seen, according to the report.

Looking to the future, more retailers are expected to begin charging for services such as home delivery and for low-value click and collect orders.


“Click and collect will continue to bridge the gap between online and offline retailing. Our own research shows that half of global shoppers are now influenced by a retailer’s ability to offer convenient collection points for online purchases. Click and collect is no longer a nice-to-have, it’s now a prerequisite,” said Berg.

“Looking ahead, retailers must follow their own golden rule by putting the customer first. For many, this will require collaboration with some unconventional partners to improve speed and quality of service while providing additional choice for customers, she said.

The key will be to collaborate with non-competing chains that share an overlap in customer demographics, thus allowing the retailer to benefit from increased footfall and shopper satisfaction without the risk of sales cannibalisation.

It’s for this reason that more retailers are expected to compete in different sectors, for example, fashion and beauty - to join forces in the name of providing a best-in-class click and collect service.

In-store Technology

Meanwhile, the report expects the store of the future to be heavily influenced by technology.

More retailers - particularly the spacious, SKU-heavy hypermarkets - will invest in instore navigation capabilities. In addition to the opportunity to better understand shopping habits, this technology is incredibly powerful as it will enable the retailer to engage with shoppers just moments before potentially making a purchase.


“In the not too distant future, we also expect more shoppers to pay for items via their smartphones. The highly publicised launch of Apple Pay has certainly created a buzz around mobile payments, but we believe it will be some time before shopper usage catches up with awareness. In fact, our own research shows that only 20% of shoppers globally have used their mobile phones as a method of payment,” said Berg.

“Concerns over privacy and security must be addressed in order for mobile payments to be accepted beyond those early adaptors. Convenience, ease of use and providing tangible benefits for the shopper are essential. For example, some retailers have been testing checkout-less stores, allowing shoppers to use their smartphones to scan and pay for items as they add them to their basket,” she said.


“Retailers should also consider rewarding shoppers, potentially linking to loyalty schemes, as an incentive to make mobile payments. It’s for this reason that we believe in the long-term success of a more comprehensive mobile wallet as opposed to mobile payments as a standalone option. Although such technologies can help retailers to differentiate today, it’s important to bear in mind that this will also lead to greater customer expectations and in the next five to 10 years such technologies will simply become the norm,” she added.

Loyalty

“We believe the end is nigh for points-based loyalty cards. The rise of shopper promiscuity and general strive for more honest, transparent pricing has had a detrimental impact on traditional loyalty schemes,” Berg pointed out.

“That said, the notion of rewarding your most loyal, most profitable customers will never go away. The future will revolve around personalisation, digitisation and gamification. We would also encourage retailers to look towards value-added perks – as opposed to money-off vouchers - such as providing VIP checkouts for cardholders or free hot drinks in-store.”

Personalisation

Retailers must be prepared to enter a new phase of mass personalisation. Historically, bricks and mortar players have struggled to replicate the level of personalisation that can be found online. However, recent advances in beacon technology mean that targeted, real-time offers are now a reality, said the report.

“What’s more, Planet Retail research showed that 38 per cent of global shoppers want to opt in to receiving relevant discounts when in-store, compared to the 15 per cent of shoppers currently doing this,” said Berg.

“This combination of shopper enthusiasm and technological capability means that bricks and mortar retailers should be looking to take personalisation to new heights, driving both customer loyalty and spend,” she concluded. - TradeArabia News Service