Six things you need to know about the future of retail

Six things you need to know about the future of retail

 

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Shopping is changing and so is customer behaviour. Here are the ways that the retail industry will be heading towards in the future

What was the last item you bought online? You probably won’t have to think too far back. Browsing for new headphones on Amazon or buying a 10-pack of socks in one click off ASOS: it seems as natural today as going to the nearest tailor would have been decades ago. Shopping is increasingly happening online, and for an industry like retail – worth £366 billion last year in the UK – the implications are big.

While retail sales are looking healthy, with a growth of nearly five per cent year on year in August, saying that the relationship between retailers and consumers has changed would be an understatement. New technologies and innovations such as the transition to digital have transformed the nature of shopping. This week, at WIRED Smarter, we looked at how retail is set to change.

It is not the end of physical shops

It’s not all about online payments and chatbots. Emilie Colker, executive director at IDEO, strongly believes in the future of physical shopping. Except the stores of the future, she says, will step away from being places of pure transaction, to being places where retailers build a relationship with shoppers. “Future retail is moving from transactional to relational,” says Colker. “Brands will use the offline space to create more opportunities for people to connect with the products.”

Innovation will help retailers stay relevant

Retailers are still relevant – but they can be left lagging behind new customer expectations, suffering from the difficulty of launching new products fast enough. “In the current climate, speed is all that matters,” says Kerry Liu, CEO of Rubikloud.

“New projects used to be carried out in one or two years – they should be carried out in one or two quarters.” The solution? Artificial intelligence – a tool that can give retailer insight into inventories, financial forecasts or technological skill.

The consumer will be king

“Everything we do needs to be done for the customer, to remove friction – whether that means integrating Google Pay or working with startups to develop technologies we don’t have the capacity to work on ourselves,” says ASOS’s chief information officer Cliff Cohen. That is good news for shoppers: they are now making the rules of innovation. That is why ASOS is working, for instance, towards integrating a recommendation chatbot within its online platform. The technology is beyond the retailer’s technical capacity, so the company has teamed up with a startup called Action.ai – all with the goal of making customer experience better. And so, consumers take the lead.

Zero friction will be the new norm

If the retailers of tomorrow fail to listen to the needs of their consumers, and more importantly to keep up with their ever-increasing expectations of a shopping experience that is completely seamless, that will be the end of their businesses. Because consumers don’t like friction – in fact, it is estimated that two thirds of consumer dropouts when buying a smartphone are caused by a bad bad consumer experience.

In 2017, UK shoppers were three times more likely to get a bad customer experience than they were the year before, according to Facebook’s group director Martin Harbech. “That’s not because retail has got worse,” he continues. “It’s because expectations are rising incredibly fast.” To survive, companies will have to keep up with the standards set for customers by the top brand in the field. And the way to do so is to completely remove friction from the shopping experience – “become friction-obsessed,” is Harbech’s tough advice.

We won’t have to think about cash anymore

People love spending but often hate thinking about paying. The process can be messy and take too long. Florence Diss, head of EMEA partnerships at Google, sees the solution as a unified commerce experience for retailers. This means giving users the opportunity to leverage the payment details they have already provided for third parties, in a digital wallet.

“Look at Uber,” she says, “where users pay without even knowing. They’ve effectively made payment invisible. That seamlessness should happen when we pay in store, when we pay online, when we pay in every possible situation.” And when it comes to making spending easier, it is likely that entrepreneurs won’t be short of innovative ideas.

The future is sustainable

We live in the age of circular economy, recycling materials instead of letting them go to waste at the end of their life. It’s an upcoming trend in retail, according to Kresse Wesling from luxury fashion brand Elvis & Kresse. Wesling started her company as a way to tackle a ten-million-tonnes-a-year problem in London. That’s the combined weight of all the fire hoses that need to be disposed of every year in the capital. She turned them into luxury products and then tackled leather waste.

“One tonne of leather costs £410 to bury in the ground,” she says. “Transform it into our system, and it will be worth a £100,000 product.” Wesling’s company is a Certified B Corporation: an organisation that meets a certain standard of environmental sustainability. And she certainly believes those are the companies of the future.

Article from Reuters.com

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