RBTE 2016 comment: The future of retail

It’s no secret that today’s consumer craves greater convenience. Value for money, responsiveness, excitement, stimulation, transparency, trust and streamlined offers at the point of decision, are all integral parts of the customer journey.

Change and adaption is no longer optional for retailers. From retail labs to incubator hubs, innovation is beginning to reach the retail bloodstream and will be coursing through its veins over the next five years, as we become further gripped by the digital age.

Digital technology has been connecting people over the world for the last five years. Smart devices have been transforming the consumer world, helping shoppers save time and money and also promising greater convenience and control. The rise of the millennial has played a key role and propelled its uptake on a vast scale.

The next five years will undoubtedly have a firm focus on connecting things within an embedded world with "smart living" transforming customer experiences and operational practices. Embedded, connected sensors will turn products into data sources, enabling us to create real-time analytics to be able to respond not only to what goes on at the principal point of purchase (the store), but also at the principal point of consumption (the home).

At the store, smart shelving will deliver more efficient inventory control, and dynamic pricing will improve stock turn rates. At home, intelligent platforms will control goods re-ordering with smart wardrobes and fridges understanding which products you like the best. These digital tools will enhance the physical experience and remove the need for us to do the mundane. As time becomes more valuable, the world of connective living will provide dynamic, emotionally intelligent environments using the ultimate personal profiling tool and source of consumer insight.

We’ll also beginning to see a change of digital focus from people to things, so we can expect to see the likes of Microsoft, IBM, GE and Intel competing against the Googles, Apples, Amazons and Baidus of this world, for key stakes in managing our digital lives.

I also expect to see a change within the store environment. Empty shelves and out-of-stock situations will become a thing of the past as lines in product ranges will become more rationalised with the help of augmented reality. Further to this, till points as they exist today will become one of retail’s relics of the past.

Simply put, the store experience will be very different. There will be no queuing to pay – the likes of contactless payment and ApplePay will see to that. There will be no queuing for service – the likes of appointment apps and alerts will put that to bed. Elements of online gamification will find their way into store design experience. Both virtual and augmented reality will help contextualise goods in the consumer’s home rather than in the showroom, making the experience more immersive.

3D printing will play a bit part, too. Consumers will be able to build their own products to specific designs and taste. In-store mobile device location tracking will alert shoppers to special offers of personal interest, making store navigation a breeze. Back-end logistics will look very different thanks to the likes of robotic process automisation, which will take out costs and drive efficiency.

All of these changes will make retailing far more productive – something that is important to the competitiveness of the industry and the nation. Either way, the future of retail will continue to be exciting and innovative for all involved.

Dr Tim Denison, director of retail intelligence at Ipsos Retail Performance, was part of a panel debate at RBTE 2016 where the participants discussed the future of retail. Moderated by Paul Martin, managing director of Boxwood Insights at management consulting firm KPMG Boxwood, the panel included Vodafone's head of UK retail Jon Shaw, Sofology's CEO Jason Tyldesley and Red Ant's product strategy director Alex Sbardella.

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Ipsos Retail Performance