Article by: Alexandra Mae Jones
TORONTO — If you tried to describe the way we shop today to Canadians who lived in the 1920s, it would probably sound like something ripped from a science fiction novel.
As we reach the end of this decade, millions of shops can be accessed with voice commands, or by pressing a few buttons. Advertisements appear wherever you look online and are curated based on what you say and type.
But as we enter the next decade, John Torella, a senior adviser with retail consulting firm J.C. Williams Group, said Canadian consumers are looking for more than just stuff.
“Well, I think they want an experience more than just a product of the service,” he told CTVNews.ca in a telephone interview. “And you know, they’re really looking to take the friction out of the whole shopping experience, the confusion, the lack of trust.”
How can retailers do that successfully? CTVNews.ca takes a look at some of the trends that could shape the world of buying and selling in 2020.
According to a retail trends report for 2019/2020 from BDO, an international accounting firm with more than 100 locations across Canada, one of the biggest challenges for retailers will be defining which niche they want to fit into: convenience or experience?
Grocery stores are at the forefront of optimizing convenience, Torella said, with online order and in-store pickup starting to take off. Optimizing how customers move through the store is another thing retailers are working on, with some shopping carts now coming with floor plans or search functions built into them.
Sobeys’ “Smart Cart,” introduced at its location in Oakville Ont. in October, comes with a scanner that can register barcodes and allow shoppers to skip the checkout line.
“There’s a lot of experimentation and innovation being applied and I think it’s just going to accelerate as people become more time conscious for sure,” Torella said.
Outside of the food world, the biggest hurdle for retailers looking to offer convenience is high-speed shipping.
It’s easier than ever before for consumers to find products they want at cheaper prices, with online retailers such as Amazon providing access to a vast catalogue of items that can be quickly shipped to your doorstep.
“Why should I go to the store to get soap, cleaning (supplies), toothpaste and stuff like that?” Torella said of some shoppers’ mentality.
Torella said that as the demand for speedy shipping rises, we could start seeing more businesses offering not just same-day shipping, but “delivery within the hour.”
A SHOPPING EXPERIENCE
The way forward for brick-and-mortar stores could be to offer something beyond a physical item.
“Your store is more than just a place to display merchandise,” the BDO report reads. “Brick-and-mortar locations must tell your story and create a sense of community and belonging for your customers.”
Torella confirmed that “raising the experience bar” is one of the main trends that will affect the shopping landscape moving forward in 2020.
One example he gave was Eataly, the Italian food experience and lifestyle market, which offers shopping, food and cooking lessons.
For Torella, Eataly, which opened its first Toronto location in November, exemplifies a “celebration of food and products and experiences and people … a thing I call, ‘social shopping.’”
Social shopping, he said, is where the goal is not to purchase a specific item, but mostly to be out in the world, to see and be seen, and spend time not only with friends, but as part of a larger group as a whole.
Another example of this type of experience, Torella said, is a new Nike store planned for Toronto’s Yorkdale mall, which he said includes a restaurant and an area where people can play with a basketball.
One of the major trends is mixed use development,” Torella explained. “So this is the way shopping centers are moving, and they’re really moving to what you might call community centers. And the definition of community … and family is changing.
“So you’ve got developers building places where you can live and shop and visit.”
TECH AND THE IN-STORE EXPERIENCE
Over the last few years, we’ve increasingly seen the fusion of tech and physical shopping. Numerous coffee shops such as Starbucks offer the ability to order with an app ahead of time before picking up a product in the store, and Apple allows customers to physically find an object in their store and then pay with an app instead of having to go to a cashier.
Voice technology could start showing up in stores, the BDO report predicts. As the popularity of smart speaker devices such as Google Home or the Amazon Echo goes up, consumers often use this technology to do preliminary product research or make shopping lists at home.
Metro, a Montreal-based company, said in August that it plans to install electronic shelf labels which would display prices digitally and allow a faster update of a price change.
And one of the largest retailers in North America, Walmart, said in April that it is looking at introducing artificial intelligence to its stores in a way never seen before: through thousands of cameras suspended from the ceiling that watch what is going on and react to it in real time. One of the main ways this will streamline the shopping experience, according to Walmart, is that the cameras will be able to spot when items are out of stock as soon as it happens, and then send an alert to employees to restock it. The high concept is being tested at Walmart’s Intelligent Retail Lab in Levittown, N.Y.
Along with technology being more fully integrated into physical stores themselves, the BDO report emphasized how important it is for retailers to focus on the omnichannel experience — a term used to refer to a cross-channel strategy of making sure the business functions fluidly between online and offline activities.
Many consumers expect the same type of service, messaging and convenience regardless of whether they use a store’s physical location or online store. Retailers should think of online shopping at their company as part of the in-store experience and vice versa, instead of the two things being thought of as distinct entities that require different strategies.
Torella calls the “move to the seamless integration of in-store and online shopping,” the “major macro-trend,” affecting retailers currently.
Pop-up stores that are open for only a limited time are a trend Torella expects we’ll see much more of. Big-box stores and companies without a location within a particular city can use pop-ups to introduce themselves to that market and test the area’s interest in their products.
The holiday season is a particularly good time for pop-ups, as companies can create limited-time releases to feature within the stores.
Some retailers are taking the concept of a pop-up one step further by opening smaller permanent stores within cities in order to get closer to people, he said.
Ikea Canada announced in November that it would be opening its first planned smaller-format store in Toronto within the next two years. It would be the first of this type of Ikea store in Canada, following up on 15 smaller stores already opened in other countries.
A CHANGING CONSCIENCE
Consumers aren’t just changing their habits due to convenience or an enriching experience.
One of the ways that the online sphere is becoming more influential in consumers’ lives is that as global awareness of the climate crisis and the impacts of consumerism increase, customers are able to research which companies better align with their values.
“Beyond just the superficial stuff like demographics, you’ve got to understand their values and their beliefs,” Torella said of connecting to consumers. “And you know, things like sustainability (are) important to people today.”
A 2019 survey on consumer behavior in the U.S. showed that 68 per cent of shoppers were more likely to purchase a product that was sustainable. And 35 per cent of the respondents said they would pay up to 25 per cent more to ensure that they were purchasing the sustainable option.
Gen Z, the consumers poised to take over Millenials in terms of buying power, were more likely than other age groups to pay higher prices for eco-friendly or sustainable products.
LOOKING TO THE FUTURE
Torella said that high-tech shopping centres will likely become more widespread.
Even the ones that sound more like fiction than fact could soon be commonplace instead of extraordinary, such as voice technology in physical stores, virtual reality being used to optimize shopping experiences, or consumers being able to identify a product and find the website just by taking a photo of it.
“We’re past the tipping point on a lot of this stuff,” Torella said. “It’s now not, will it happen? It’s just, when is it going to happen?”
Retailers should also be “shopping the world,” he added.
They could fall behind, “if they don’t know what’s happening in markets like China and India and Korea where a lot of innovation is taking place,” he said.
“We’re in an era of dynamic change, and things will never be the same again.”