Retail is an incredibly dynamic industry.
“We will see more disruption in the next 10 years of retail than we did in the previous one thousand,” said Doug Stephens, founder of industry website Retail Prophet and author of The Retail Revival: Re-Imagining Business for the New Age of Consumerism.
Stephens recently published his 10 predictions for how retail will change this year.
He agree to share his list with us.
1. Companies are researching you in unprecedented ways.
“German neurobiologists are mapping brain waves in response to product pricing and uncovering some highly counterintuitive insights into how the human brain perceives pricing and value,” Stephens writes. “Retailers now have an unprecedented capacity to use technology and data to deliver intelligence, not about what consumers say they’ll do, but about what they actually do.”
2. Same-day (or hour) delivery will become common.
Amazon has been testing 30-minute drone delivery. While the idea of robots delivering goods might seem outlandish, Stephens writes consumers will soon come to expect it.
To compete with online retail, brick-and-mortar stores might start using their locations as distribution centres, Stephens writes.
3. Traditional stores will have the same analytic intelligence as online.
“Their knowledge of who is in the store; where they move in the space; and the products they interact with, will all be instantly and continually calculated,” Stephens writes. “When we walk into a physical store, our browsing history will follow us and inform our physical shopping experience.”
Apple has recently implemented blue-tooth technology that senses who is in the store.
4. Media companies will start selling products.
The media’s traditional role as an advertiser is shifting, and companies are starting to sell the products themselves. For instance, much of Harper’s Bazaar magazine is already shoppable.
“TV shows will generate revenue by selling products, not merely advertising them — offsetting declining demand for the 30 second commercial,” Stephens writes.
5. The “new Industrial Revolution” will advance.
In response to strikes for better wages, low-paying companies like McDonald’s and Wal-Mart will begin to automate tasks whenever possible.
This is already at work, with Wal-Mart installing 10,000 self-checkout systems. McDonald’s Europe installed 7,000 touchscreens this year.
6. The lines between online and offline commerce will blur.
Last year, eBay launched “digital storefronts” in New York and San Francisco that allowed customers to order items for same-day delivery.
Stephens says this is an easy way for retailers to impress shoppers.
“Not only do these installations add an element of surprise and variety for shoppers but they also allow brands to set up shop in opportune and often less conventional locations,” Stephens writes. “They need no inventory and apart from periodic technical support, they require no staffing.”
7. Privacy will become a business.
Consumers are increasingly concerned about their privacy while shopping online, and will begin to pay for services that keep them anonymous.
Additionally, retailers are going to have to do more to reassure customers that their purchasing data is safe.
8. People won’t care as much about ownership.
As the middle class hollows out and culture shifts toward living with with less, consumers will evaluate their purchases more closely.
“Cars, homes, household items and appliances, and vacation homes will increasingly be shared,” Stephens writes.
Rent The Runway, which lets women rent special occasion designer gowns, is a good example of this trend.
9. Social feedback will factor into purchases.
Nordstrom recently launched a program where it displays merchandise that’s popular on Pinterest more prominently. This will become more popular this year, as shoppers seek out reviews and opinions from other consumers.
10. Prices could change multiple times in one hour.
Retailers will begin to test out “dynamic pricing” in stores, allowing them the same competitive advantage as websites like Amazon and Priceline.
“Expect to see incorporation of other data such as weather, competitive pricing and even items already in the customer’s shopping cart.
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