Industry Experts Predict The Future Of Retail

There will be a fusion of physical and digital worlds where at some point in future consumers will intuitively shop without perceiving the difference in a world of superposed channels.

Data devices, people processes become intertwined and winners will differentiate with their ability to collect, manage, secure, analyze and act on the widest set of information to proactively provide engagement, assortment and services that meet individual consumer needs, wants and aspirations at any point in time.

While this may be a scene from a rather distant future, one can be assured that imminent. To remain relevant, retailers need to anticipate buying patterns and respond with ‘contextual engagement’. What is the next step in your journey to adapt, grow and continue to be profitable? Learn more from: www.ibm.com/retail

There will be continued turmoil as retailers & shopping malls strive to come to grips with the complexity & opportunities of Omni channel retailing. Very quickly those that don’t ‘get with it’ will drift away.

Following this there will be a surge of creativity in store & website environments, as malls reinvent themselves [or become outdated & unappealing], & with the re-adjustment of retailer’s ‘value propositions’.

This reassessment will be forced by the accelerated growth of the super-low
price/value merchants like Uniqlo, Aldi & Amazon. Their growing market share will put pressure thoughout the market & on up to the so-called ‘luxury brands’. These will be forced to complete a total transformation of their offering – consumers can only be hood-winked for so long!

Shoppers are dictating the future of retail. They’re empowered with information and options, and for the first time ever, they’re the ones calling the shots.

Retailers will have to restructure their entire organizations and shopping experiences to reflect the cross-channel, circuitous way shoppers shop. Digital and physical channels will have to converge into one branded, value-added shopping journey.

Historically, in retail, the future comes slowly, so what was just a buzzword three years ago is what retailers will still be conceptualizing, adopting, and optimizing tomorrow, and that’s omnichannel.

Omnichannel flexibility will look different for every retailer – whether it’s click and collect, or the ability to return online purchases in-store, or however else a company may define omnichannel for itself – but the key is still to unify a brand’s underlying processes such that customers perceive a single entity, even when they interact with it across multiple channels.

Complete, connected transparency into every activity across channels is what makes it happen on the retail end, and that’s what businesses get with the Retail Pro retail management platform.

Young people will grow up with an eye to having their own store-either online or brick and mortar.

Barriers to entry are vanishing and they can learn anything they need prior on YouTube, funding options abound and the idea of working for someone else is growing increasingly bad.

We’re already seeing 9-yr. olds with their own bowtie business, 11 and 13 yr. olds with their own coffee businesses and the talent on reality shows is going down exponentially. They will all be looking to leverage their entrepreneurship while still in school.

Connected customer experience the future of retail – most retailers agree that it is key to success in a highly-competitive climate which is becoming increasingly driven by technical advances.

In a fast-moving, technically-enabled world where customer behaviours are rapidly evolving along with their expectations, context-appropriate, consistent experiences can only be achieved by developing a mobile-first strategy that connects data capabilities across the business.

That means using mobile to bring together all business areas from customer service through to stock management, giving a single view of customer activity that drives efficiencies, delivers excellent customer experiences and increases sales.

Food – Big box stores will be a thing of the past, given drastically changed shopping habits and online shopping. Food shops will be conducted on the move via mobile/Apple watch etc- apart from the treaty food shopping done as a top-up in higher-end food stores.

Non-food – Brands will become singularly less important especially in apparel as savvy shopping becomes the norm. This is due to a growing trend for “experiences” to replace material possessions to some extent where disposable income is concerned – i.e. it’s not what you have/wear but what you do/see.

I believe the future of retail will be more defined by the consumer versus the stores themselves.

Consumers have more control than ever when it comes to making purchase decisions, and for this reason we will see a huge shift in not only consumer behavior, but how consumers choose to shop.

There is a huge disruption coming in retail over the next few years around mobile technology. This is not just mobile payments, but other technologies that are changing the way retailers do business.

Expect more retailers to run their business entirely on apps. Retailers can now pick and choose apps to essentially create their own, tailor-made IT system from point-of-sale to finance, inventory and marketing. And it’s not only for the big stores – mobile and cloud technologies are powering a resurgence of SMB and independent retailers, with their accessible price points and ease of use.

Now, your whole business can be run on an iPad, and a retailer can be up and running operationally within a day. This is transformative for many businesses, from saving time and money, reducing friction points for customers like long queues, and allowing a manager to check in on the business and sales information remotely.

Our number one prediction: Shoppers want to date technology, they don’t want to marry it.

There are technologies available right now that make shopping fun, and easier for the consumer. While they are intrigued by what’s available to enhance the in-store experience, they are turned off when they realize they are being “watched” as they shop.

In one way or another, technologies that offer retailers a deeper insight into what customers want, coupled with the opportunity to interact with shoppers even when there is no sales person there to help, will make their way onto sales floors everywhere.

Retailers need to ensure that their customers understand the in-store technologies they utilize so they feel comfortable – and safe – using them as intended.

My number 1 prediction for the future of retail is that all channels will
become blurred to the point of being indistinguishable. Retailers will be
delivering such a technology-enabled omni-channel experience that shops will be showrooms and fulfilment centres where customers could simply wander in, automatically checking-in with their mobile device, receiving tailored pricing and promotions, and they will be able to pick up an item and walk out with it, knowing that it’s been charged directly to their mobile account.

For more complex purchases they’ll use digital guided selling solutions to refine their choices, perhaps interact with a product expert (virtually or face to face), maybe use some augmented reality to experience a product pre-purchase, or perhaps order something to be uniquely 3D printed to their size and specification.

Whatever the experience looks like, technology is going to be developed that engages and entertains customers, that simplifies the shopping process or makes it more convenient, or that enables really fantastic levels of personalisation and co-creation between retailer and customer.

Frankly the opportunities are endless, limited only by our imaginations, and it’s going to be really exciting to see more and more digitally enabled shopping experiences being developed by the innovators and eventually being part of what consumers come to expect as a “normal” experience!

In the modern world of retail consumption, there are a vast number developments that are leading to the transformation of retail—but they all hinge on retail’s new empowered customers who are guided by a never-ending clock, shopping anywhere, all the time and everywhere. Technology today has advanced to the degree that retail has become unconstrained by store hours or physical shopping limits in regard to location. Customers can shop any time, day or night, from various locations, both in the physical and virtual worlds.

Channel Synergy is of huge importance to today’s consumer and retailer alike. Retailers who spend time evolving both the physical and on-line aspects of their brand will win in the years ahead. How can the multiple channels intertwine to give the customer that round-the-clock shopping experience they now expect? Buying on-line and picking up in store is a great example of a synergistic channel. This seamless integration across all channels is key to the customer experience.

Retailers also need digital options for purchasing when the stores are closed. Similarly, understanding the customer demands for the act of purchasing in any channel means providing a solution to ease the pain for purchase i.e a unified transaction engine or mobile wallet.

The future of retail will be defined by modern shoppers. It is much more of a consumer-led experience and retailers must acknowledge that. One of our clients, House of Fraser, sees two to three different devices being used in every sale, with mobile contributing to over half of online transactions.

Marketers continue to be ambitious with creative digital campaigns and cross-device usability as new technologies emerge, but many still don’t truly understand which channels are actually working. Measuring the success of marketing channels should already play an integral role in a retailers’ marketing strategy and while there has been an increase in attribution uptake in recent years, I predict that there will be a huge surge of brands embracing the use of attribution and measurement over the next 3-5 years.

Ultimately brands want to better understand consumer behaviour across multiple devices and deliver an omnichannel shopping experience to consumers – online and offline. And while traditional analytics and metrics are helpful, attribution is the final missing piece for many. It is a ‘matrix like’ relationship, where retailers must ensure that the complex interplay between its systems work seamlessly on and offline.

The future of retail will be shaped by a rapidly evolving payments landscape. Increasing convergence and integration and developments in e-commerce and mobile technology will change the payments world beyond recognition. For instance, over the next five to seven years, retail payments are expected to mature into highly automated and interactive eco-systems. There will be no one-size fits all model and to capitalise on this opportunity, retailers need to evolve with the changing customer journey.

From Apple Pay and Klarna to PayPal, many of these innovative payment platforms are offering customers a very simple customer experience. But which ones will stay the long term?. Retailers need to ensure, before implementing any new technologies into their commerce strategy, that they are not adopting these just to be seen to be innovative and instead, are choosing a channel that makes business sense for them and most importantly, their customers in the long term. Some may even need to work on perfecting the basics of digital commerce before they start investing in newer, more innovative technologies.

The future of retail is already here; we’re just witnessing the ongoing evolution. With the explosion of the digital economy, customers have access to more information than ever before, and that access has altered traditional buying behaviors. Webrooming now influences the entire sales process, and retailers must adapt to sell to today’s more knowledgeable consumer. In fact, one could argue that the traditional “purchase funnel” no longer exists.

To remain relevant, retailers must first acknowledge the customer has control of the sales process and then develop modern sales tactics in order to engage with consumers. Looking at engagement through this lens will require personalized reach, making an omni-channel communication approach key to cultivating customer connectivity and critical to delivering a brand’s proposition in the marketplace.

As retail continues to evolve, new tools like these can be used to reinforce a retailer’s true focus: the customer experience. With an eye toward convenience, service, and personalization, I believe any retailer can maintain a position as a trusted customer resource, even while the world changes around them.

The future of retail continues to evolve moment by moment. The artificial walls between brick and mortar retailing and online retailing will continue to fall as shoppers view their shopping experience in a more holistic way. Smartphones, social media, beacons, mobile pay and other yet-to-be discovered technologies continue to drive the consumer side of the retail evolution.

Gen Z are true digital natives and will push hard on continuing the integration of technology, started by the Millennials, into all aspects of retail as they grow into their adult years, begin their careers and start to spend money. On the flip side, retailers need to figure out how to engage with these shoppers, analyze and proactively meet their needs by fully utilizing the big data available, yet respect privacy concerns regarding use of this information.

Retailers that adapt and embrace the future will flourish; those who fail to understand their customers and their needs will fade into the past.

It is my prediction that retail’s future will no longer be about “products” but rather “solutions.” Retailers will guide consumers through a need-based decision process that starts with the end in mind. Merchandising products (whether in-store or online) will not be dependent on rigid categories, rather a more concierge approach that simply asks the question “What can we help you ‘solve’ today?” Then products and services will be presented specific to that very specific need.

Oh, and it won’t be about brick-and-mortar or online/mobile. It is not a question of either/or it is about AND. Retailers will use technology in exciting new ways to seamlessly present consumers an experience that they look forward to participating in. Gone are the days of drudgery … shopping as a “chore.”

The future of retail will be bright for those that start the reinvention process NOW. Retailers who elect to sit and wait for the future to arrive will become the dinosaurs existing only in history books and memories.

Generally, from a prediction standpoint, I think the future is getting into the details behind understanding and serving all the important moments a consumer goes through when arriving at a purchase decision.

To do this will require not just visibility into the data along this path, but the ability to scale that insight from an analytics perspective to all the business functions that have an impact on whether a consumer’s experience is positive or not.

That means not just marketing touchpoints, but the interdependent process around product availability, pricing, fulfillment method, service, and loyalty.

The future of retail lies in technology enabled customer-centricity. I see a future where the in-store associate and store operations management have as much information at their fingertips about products and services as the shopper, but the store associate becomes a more important piece of the puzzle. This sounds simple and intuitive, but it will require a pretty dramatic shift in retailer financial models, at least here in the US. We can’t do what we need to do with our historical transient, low-paid and poorly trained workforce.

Retailers know this and have made some attempts to improve base wages, but that’s only the start of a very long story. The commitment to training and technology required to support these efforts is going to be very large, and something else will have to “give” in the process. Perhaps mass advertising expense…. I’m not clear where there is give on the retail P&L. But it will have to come from somewhere to satisfy more demanding consumers.

Retailers will (finally) make it a priority to figure out the precise financial value of their customers, and use this information as the basis for myriad different decisions, from tactical ones such as cross-channel acquisition allocations and store location, as well as strategic ones such as loyalty program design/implementation and all the way up to firm valuation.

Countless firms across many industries have been making meaningful progress on this important issue, yet retailers have been laggards. This is sadly ironic, because retailers have better access to data (and the systems to make better data-driven decisions) than their counterpart in other sectors. But because this kind of granular financial thinking often goes against the grain of traditional retail operations, it has rarely been a major focus for them.

The changing times demand and enable this new trend. We’re seeing a “perfect storm” of factors that drive such changes, including (1) customer-level data that is better than ever, (2) the analytics that can be derived from the data (e.g., customer lifetime value) are now proven and well-accepted in other industries, and (3) the technologies to allow retailers to make these kinds of data-driven business practices are readily available.

In short, this type of business thinking is moving from a long-term aspiration (which retailers have often spoken/dreamed of, but have never pursued for real) towards a competitive imperative (as maverick firms such as Amazon transform the retail landscape). It’s time for retailers to wake up and fully leverage their data – and that all starts at the customer level.

I recently completed a national research study of American Millennials (18-34 years of age). I discovered some very profound differences in their food retail shopping behaviors from their older counterparts. Only 56% of all Millennials shopped for groceries in a regular full-service supermarket during the preceding 30 days. This number is a sharp contrast to data published by the Food Marketing Institute (FMI) which reports 89% of all households shopped for groceries in a regular full-service supermarket the past 30 days. In addition, one quarter (25%) of Millennials in my research indicated that they purchased groceries via online/Internet/mobile during the preceding 30 days. This is in sharp contrast to the FMI data which indicated only 8% purchased groceries online during the previous 30 days. Similarly, more Millennials shopped at Supercenters, Dollar, Drug, and C-stores than the rest of the population.

The conclusions and implications of these findings are as follows: Food shopping behaviors of this now largest U.S. generation are significantly different than the rest of the population. There is clearly less shopping at traditional food retailers. The future of the traditional food retailer in jeopardy, unless significant changes are made. In addition, manufacturers’ go-to-market strategies need to change to reflect the changing shopping behavior of Millennials. Food marketers who assume that the Millennials will start to behave like current older Americans, just because they age, do so at their peril.

My predictions for the future of food retailing are as follows: First, Omni channel which is about customers, not channels, will become a reality. Second, the days of the Center of Store (COS) as currently configured will be significantly diminished. Many of the COS products will be purchased online from the “bricks-and-mortar” retailer and delivered to the store for direct placement into a consumer’s vehicle. This will then free up consumers to shop enhanced and exciting perishable (now perimeter) departments, then proceed to a designated area and have their online purchases placed into their vehicles. Food retailers who design their stores with this in mind will be able to satisfy the multi-level needs for speed, convenience, service, customization, and a sensory-focused food shopping environment.

The future of retailing has less to do with technology and more to do with storytelling. Bluntly put, retailing is in desperate need of a new narrative line. The old narrative of, “Once upon a time there were makers of things, and they sent their wares to the happy shop keepers who, in turn, put them on their shiny shelves and opened their doors waiting for the ovine consumers to come in and happily graze off their bounty …,” perfectly describes the past and — in still too many places — the present of retailing, but like so many fairy tales, the plot and vocabulary, while familiar, are getting seriously dated and have lost their ability to inspire.

Countless firms across many industries have been making meaningful progress on this important issue, yet retailers have been laggards. This is sadly ironic, because retailers have better access to data (and the systems to make better data-driven decisions) than their counterpart in other sectors. But because this kind of granular financial thinking often goes against the grain of traditional retail operations, it has rarely been a major focus for them.

That’s because future retail narratives won’t be written for consumers by shopkeepers and manufacturers. Instead they will be written by the consumers themselves and dictated to retailers and other branders. Consumers don’t think about technologies, or channels, or classes of trades or any of the other things that occupy the minds of retail pundits. No, consumers are relentlessly focused on one thing — the satiation of self-defined needs. Increasingly, that need state is best expressed as, “I want what I want, when I want it, accessed in any way I want.”

The difference between a good story and a great one is that a good story informs, educates, amuses, provokes, etc., while a great story allows the reader/listener/viewer to find themselves inside the story. Without doubt, technology provides a series of good stories, but, to become truly future facing, global retailing is in immediate need of a new class of great storytellers.

The future of retail should be shaped in response to meeting (or exceeding) shopper expectations. As creatures with imagination and emotion, shoppers project how technology and systems can enhance their lives, setting up expectations for tech entrepreneurs and retailers alike to “deliver” on their every whim. Retailers’ delivery against consumer “wants” has been addressed by technology and systems, and while they are helpful, many solutions leave consumers to do much of the work on their own, relying on their devices.

Rational needs are fulfilled but I believe there are big opportunities to address the more subconscious emotional needs shoppers have, most of which are unheard given our subconscious has no “voice box”. In a nutshell, those needs are best met by human interaction. Consumers find some human interaction while online shopping from virtual chat reviews and opinions and so on. But while online/mobile shopping continues to grow, new research still shows us that 85% of most shoppers would prefer to shop in a physical store. The crave experiences and the collaborative camaraderie of a store full of shoppers and knowledgeable associates. Physical retail largely continues to disappoint in providing human service.

The idea of “showrooms” that combine three key things: touchable products, human videos that show products in use and feature real benefits, and human “hosts” armed with technology to offer access to details, reviews, transparent pricing and promotion is a vision of future shopping that I support. Shoppers gain knowledge and decision help, can chose who to buy from and how and where to take delivery. That type of helpful experience can deliver on spoken and unspoken needs for human involvement, and can be implemented today. If retailers truly keep the shopper at the center of their lens, the future of retail will need to include more human-to-human interactions focused on helping the shopper achieve his or her personalized trip goals.

Retail will change in many ways, but immediacy will have the biggest impact. Our homes will replenish themselves; our packages will arrive hours after the order; retailers will bid on the right to sell us products in real time; our in-home printers will produce products as we watch.

These are examples of consumers having immediate access to the products they want. The technologies to support these scenarios already exist, so we’re not waiting on anything new to be invented. All of these scenarios are already a reality in small, independent deployments. It’s only a matter of time before retailers evolve their business models to fully embrace this notion of immediacy.

That’s not to say traditional channels will cease to exist. Physical and digital retail won’t fade away, nor will the importance of good customer service. But massive improvements achieved in forecasting, sourcing, and moving products will radically change the landscape in which we trade.

Obviously no one will wake up tomorrow to this new reality. It will emerge slowly over many years, but we can already see evidence of the coming changes. Every retailer needs to think in these terms, and make sure each investment moves them closer to the goal.

How can you even trust anyone who says they can predict the future of retail? If you look back just five years, who could have predicted where the world is today? However, that doesn’t mean we cannot gauge where we are headed based upon some real trends happening now globally.

First, emerging regions are skipping many growth phases that mature markets went through, and are going directly to mobile commerce in a much more ubiquitous way than the developed world is. Growth markets are leveraging aspects of mobile, social, cloud and even security faster than western markets can adopt them. Mature markets have far slower growth and retailers are struggling to grow profitably. I believe that trend will continue overall for a few years to come.

Competition is as fierce as it has ever been globally. I see retailers gaining advantage by becoming more service-oriented and driven rather than product- or price-driven. Those merchants, both online and offline that capture their audiences by generating compelling, differentiated offers will drive real brand value and something beyond traditional loyalty to “brand enthusiasm”. The challenge is that too many merchants don’t value their own brand, or worse yet, they don’t think of themselves as a brand, like their CPG / FMCG suppliers do.

You can think of those vital few retailers that have driven brand enthusiasm today, and I believe that they will fend off any traditional competitors that try to match their brand value proposition. To thrive in the future, retailers must create the “following” of their audience, and I don’t mean simply via social channels, but via every aspect of the consumers’ lives. The future is bright for retail, but only for those that drive true brand enthusiasm with their targeted markets.

“Follow the demographics” to understand where retailing is headed. In particular, Millennials are rapidly surpassing their Baby Boomer parents in terms of sheer numbers and eventually in terms of spending power. This has some profound impact on consumer behavior and retailers’ response.

It’s been well documented that younger shoppers tend to be early adapters of technology, and several other experts have already weighed in on the impact of “smart” devices on the empowerment of the shopper. But the habits and preferences of Millennials go far beyond the effects of the smartphone in their hands:

First, retailers like Amazon have redefined expectations for that “empowered” consumer, and not just among Millennials. In terms of assortment, pricing and logistics, these kinds of merchants have closed the perception gap between e-commerce and traditional brick-and-mortar.

Next, Millennials appear to be more interested in “consuming” experiences (travel, restaurants) rather than merchandise. Without painting an entire generation with a broad brush, this will continue to have an impact on brick-and-mortar retailers committed to the old model of a storeful of “stuff.”

Finally, Millennials have driven the growth of the “sharing economy,” with companies like Uber and Airbnb representing the most visible success stories. How does this disruptive model affect traditional providers of goods and services? Does some sort of redefined “bartering” economy become a new force to reckon with?

With these and other rapid-fire developments, the retail landscape will look far different even in another 10 years. It’s exciting to watch.

Consumer devices (wearable/mobile) interact with in-store and near-store technologies to engage 1-1 and improve the shopping experience. Embedded product placement allowing immediate purchase of an item from videos, movies and TV becomes a major sales channel.

Consumers will depend more on evaluation software to scan multiple sources for product review information and recommend best-fit products based on individual need. Brand becomes vitally important as consumers easily shop across retailers and channels. Because of overwhelming consumer demand and running counter to healthy-eating trends, even more food items will be covered in chocolate and include bacon.

All retailers, regardless of channel, will be absorbed into either Amazon or Alibaba (or cease to exist).

Amazon and Alibaba will merge to form Amababa (or Alizon – depending on whether Jeff Bezos or Jack Ma is the wealthier at the time).  Amababa (I’m betting on Bezos) will form a worldwide governing body under which world peace will finally become reality.

All products and services will be ordered via direct brainwave connection with Amababa’s network. Delivery will be direct to individual, using digital downloads for virtual product.  Physical product will be delivered via drone, regardless of the person’s location at the time, using the geolocation devices implanted in our brains at birth to find us.

Payment will be virtual, as Amababa will also control all financial institutions and services. Consumers ordering goods or services for which their accounts do not contain sufficient funds will receive immediate financing options for their purchase. All consumer accounts will be merged into one per individual or household, allowing mortgages, car loans and 32 oz. soft drink loans to all be managed as one balance. Consumers will be notified of the change to their monthly payment caused by any purchase or finance offer prior to accepting. Failure to meet the minimum monthly payment for three consecutive months will result in immediate termination of all accounts (and account holders, again, via drone).

Oh, and don’t even think about falling behind or trying to cheat on your taxes. Amababa will collect those as well.

Enjoy the future of retail.

The future of retail is here – the customer is informed and in control and it’s only going to get better or worse for retailers depending on how they respond. And it’s definitely not all about consumers turning online and dropping out of physical shopping!

Customers routinely browse and research online choosing carefully where to spend. Luckily for apparel retailers the final buying decision will always wrap around the analog process of the try on. Making the fitting room experience meet the expectations of their customers should be job one.

Does that mean replacing associates with apps, chutes, and 3-D printers? Or offering personal shoppers at Walmart? I don’t think so. What it does mean is designing brand right fitting rooms and arming associates with technology that increases their efficiency and competency and makes the fitting room process a little less painful.

Retailing is moving faster now that at any time of my thirty-five years in the industry. Until recently, traditional retailers became successful by building nice stores and making great deals with the brand suppliers. Now, many of these same retailers are getting left at the gate by new competitors that recognize that shopper expectations and options have grown immensely

Looking just five years ahead, the mix of competitors, customer touch points, and enabling technologies will continue to shake up every channel of retailing. Leaders will become laggards and start-ups will become behemoths, all due to the abundance or dearth of shopper centricity imbedded in the corporate culture of the retailer.

Only a fraction of the technology that is in play now will survive. Surviving technology will necessarily create value, by saving the shopper time, making their purchase decisions easier. In the future, bricks and mortar stores might be smaller, but they will still be crowded, provided the retailer understands that every merchandising decision, every investment in fixtures and enabling technologies must be about the shopper, not the result of making a great deal with a supplier. Despite more technology in the store, personal selling and customer service will be more important, not less.

Shoppers who crave the assisted environment of their on-line experiences will demand that in the physical store as well. Finally, successful retailers in the future will begin their Monday morning business meetings not by looking at sales by store or division, but rather by reviewing shopper data that depicts how customers spent their money and time across every selling channel and social and mass media outlet the retailer offers. They will focus on the learning from those data and how they can use that learning to improve the lives of the shoppers.

When I think about the future, I see a continuation of trends that have been emerging for several years now as the disruptive impact of eCommerce and Mobile Commerce took hold across the retail industry.

First, the lines between physical and digital will continue to blur. In the past year Gilt, Nasty Gal, Sole Society and Blue Nile to name just a few have joined early pioneers like Warby Parker and Bonobo’s as the latest online “pure plays” who have expanded their model to now include stores. Meanwhile Macy’s, Nordstrom, Bloomingdales, Rebecca Minkoff and many other “traditional” retailers continue to add strong digital components to their in-store experience. This trend will continue to play out over the next decade as consumers come to expect their favorite brands to offer multiple ways to engage and shop on the consumer’s terms.

Second, the need for physical space (in developed economies) will decline. A corollary to the trend above. As the pure plays move offline they are opening “guideshops” and showrooms as small as 1,000 sf. Meanwhile, the big box formats are among the most vulnerable to competition from Amazon and other players and many in this category will continue to close stores or shrink the footprint of their existing stores.

Finally, retailers will use personalization in an effort to remain relevant. The personalization technology industry has finally matured to the point that it’s now possible to deliver on Peppers and Rogers vision of 1:1 marketing. Look for experiences starting with digital communications and spreading to on-site journeys and finally in-store engagement to become increasingly personalized based on a shopper’s profile and interests rather then just seasonality or the promotions calendar.

The in-store experience will get better as the customer demands value in the form of customer service and experience. That will continue to be a differentiator for retailers.

We will continue to see online retailing growing. The experience will become simplified (think Amazon’s One-Click purchasing system). Shipping and in-store pick-up options will make it easy and fast to receive merchandise.

Predictive consumption will become more popular, where stores can predict what the consumer needs and just send it to them, automatically charging their credit card. For example, air conditioning filters need to be replaced every six months. A consumer can sign up with their hardware store to have the filters automatically sent, just before they need to be changed.

All of this makes life better for the consumer. The retailer that takes advantage of delivering a service experience, making their online presence easy and congruent with the level of service the consumer receives in the store and signing up consumers for a “predictive consumption” program, will reap the benefits in, at least, the short term future of retail.

Assumptions about location and the transaction process have been turned upside down creating a new set of challenges for retailers. In addition, Millennials are not the same market as Boomers. So what’s next for retailers?

Consumers can purchase what they want when they want online using whatever device is handy – computer, laptop, tablet, smartphone, or phone – using an app, a website, social media, kiosk or other tool. Some consumers use all the choices at one time or another. Some consumers prefer to use one device and one format. Some consumers have a few favorites. The experience offered to consumers needs to be integrated across all devices and optimized for the choices preferred by their most loyal consumers.

Knowing that sales take place anywhere means the location assumption has turned 180 degrees. It used to be that you analyzed the population to determine where to put a store and consumers came to your store to make a purchase. Now retailers need to be flexible and be where the consumers are! Where do your most valuable consumers congregate? Concerts, parks, sports events, public transportation vehicles, outdoor cafes? That is where you need to be and that involves using non-traditional formats. Using technology such as LED screens, smart vending machines, kiosks, or containers with computers are all part of the pop-up store movement.

But wait, retailers do have physical stores. What to do? Displaying merchandise is no longer the primary focus of what goes on in a store. There are still some products that consumers want to see, try, and touch. That need results is showrooming. What can you do to make consumers want to come to your store and stay and shop at your store? Millennials like experiences so classes, demonstrations, special events, games or contests may attract them. Some Boomers may like experiences such as special sessions to learn about new products but they also value ease of shopping. What keeps consumers in the store? Enjoyable experiences whether that involves amazing employees who are knowledgeable and fun to be around or fun activities – like dressing rooms that are pleasant, comfortable, and have spaces for sharing with friends. What would entice your most valuable consumers to come to your store and what would make the experience so enjoyable they stay and buy?

Managing all of this is a tall order. The winners are moving in this direction which means that consumers will expect all other retailers to do this too.

Stores, like life, are now digitally enabled. There are no lines between digital and the physical. However, nothing — and I mean nothing — can take the place of the visceral, multi-sensory, emotionally compelling potential experience of the brick and mortar store. It is the only place the brand physically manifests, and it is VERY CRITICAL that we design the shopping experiences—now and in the future — with this in mind.

Here’s the thing about retail futures. Technology is meant to make life – and shopping — more human. It’s supposed to make things easier, more rewarding, more worthy of sharing…more delightful. The easiest way to predict what will be adopted is to start with what needs to be fixed.

What is happening with people in the world? What is happening culturally? What trends could open up some opportunity within retail? How can we solve shopping (and life) friction points with them? Which are best addressed with digital and where should we stick with real, compelling humans?

These are the lenses to look through to predict the future of retail. Find the real diseases and solve them the right way.

A huge shift in consumer mentality has bludgeoned the thinking of all retailers, regardless of vertical. Shoppers, especially younger ones, no longer shop and live separately, they/we all live-shop simultaneously. One consumer told us, “I needed something, remembered it at work, shrank down what I was doing, went online and bought it — 5 minutes.” We are shopping all the time now, not within store hours and not necessarily in stores at all.

Consequently, not only have retailers had to compete online, but the days of the “stack it high and let it fly” experience are over. Here’s the shift in simple terms: No one has to go to a store anymore, we have to want to go to a store. Understanding that simple formula is the first step towards being competitive in today’s physical retail environment.

Where I see retail evolving to.

As someone who has been involved in eCommerce since the early days in the mid 90s, that’s where I see retail heading. In 2014 US eCommerce sales surpassed $300 billion for the first time ever and it was the 5th consecutive year where annual growth was 14.7% or higher. I don’t see that growth % shrinking meaningfully anytime soon, especially when that is only ~6.5% of US retail sales and Amazon has no intention of taking its foot off of retail’s throat with ~$89 billion in 2014 revenue. It only took Amazon 20 years to reach that size, it’s not going to ease up until other retailers force the issue and right now I don’t see any traditional retailers in a strong enough position online to do that.

And this tees up my next prediction which is as eCommerce continues to grow, traditional retailers need to better adapt to the changes this brings such as how do they become more proficient at eCommerce as well as start to integrate their other sales channels (e.g. store, contact center, etc.) with their eCommerce initiatives to enhance the customer experience. Amazon has really raised the bar by focusing on how to more effectively serve its customers so retailers have two choices:

– Deliver an improved customer experience and grow/maintain their business.

– Stay focused on the status quo and watch their business gradually erode.

Integration of the digital sales channels with their physical assets offers traditional retailers the opportunity to create a customer experience that Amazon currently can’t deliver. While its not to say they won’t at some point in the future, this is the best chance for retailers to stem Amazon’s growth as 98%+ aren’t going to reel them in on the eCommerce front. The domain expertise Amazon has built up over the last ~20 years, while not unassailable, is unlikely to be surpassed by anyone. Being the first mover has its advantages.

Every retailer should be concerned about Amazon’s impact on its business and taking the necessary steps to minimize this. Change has come and it will continue so best to embrace it sooner rather than later.

Consumers have already crossed the chasm … omnichannel is their new normal behavior. It is this evolving behavior of consumers that will define the future of retail.

Shopping is no longer a “purchase event” at a “place”. It has become a continuous journey across digital and physical. The “e” in ecommerce means everywhere, every day. Armed with smartphones, today’s consumers shop anytime and anywhere they choose. They are not dependent upon retailers for place, product, or price. They control their own experience.

Charles Darwin had it right in terms of survival of species and retailers: “It is not the strongestnor the most intelligent that survive. It is the ones that are most adaptable to change.”

The future of retail is unfolding right now. Successful retailers must adapt to three major consumer trends:

– Shopping is a continuous experience which transcends time and physical space.

– Place is not a “store”, but where the consumer is shopping at a moment in time.

– Consumer decision to purchase is a process, not an event.

Consumers have literally become the new “POS” (Point of Sale) of retail. They decide when they shop, where they shop, how they will pay, and whether to take delivery.

Future retailer survival will depend not upon size, stores, or even online expansion. Consumers will vote daily on which retailers survive. They will vote based upon who adapts to provide them with the best personalized experience before, during and after the “sale”.

Everyday, there is an accelerating increase in the volume, velocity and variety of digital media bombarding people. Ultimately, the environment will become too dense to have an unaided human at the center of his communications and transactions. I believe that consumers will need to augment their individual ability to filter information and make decisions. They will need to do this as an evolutionary step to keep pace with technology. But before our Artificially Intelligent Assistants completely take over, there is room for brands and retailers to step in.

Savvy marketers will take advantage of the need to filter relevant choices, pushing their products and services to the forefront. In the next few years, brands and retailers will be jockeying for position as Go-To Lifestyle Filters and Concierge Services, especially for Millennial shoppers.

The future is here! Using predictive analytics and advanced trending, retailers are rapidly adopting cloud-platform technology to gather and analyze key business metrics to determine prime correlations between market movements, competition behavior, and customer wishes.

Retailers are mastering the present and the future by studying the past to see the correlation and causality in comparative price history, assortment evolution, and product introduction — in order to apply insights to inventory levels, sales, promotions, conversions, trends, optimal pricing, margins, and profit — while catering to what pleases, attracts, and satisfies the omni-present, omni-channel, omni-connected customer.

The continuing transformation and ease-of-use for mobile apps will be the key to personalizing the shopping experience for consumers inside brick and mortar stores of all types. And yet, the development of highly sophisticated cross-channel profiling will enable customers to buy on-line, or inside the store, without complications.

And with my apologies to the folks that make and sell drones that will replace the need to ever leave the house to go shopping, I say with absolute conviction that the human shopping experience will never become entirely digitally agoraphobic! The reality is that almost all consumers will continue forever to make purchases both ways, on-line and also inside the stores. But the main developing evolution will be that it’s really one in the same. The brick and mortar stores are not going away. They will simply be integrated digitally with what each store does on-line. Remember, humans are social beings and they love to get out!

I am envisioning that customers will be welcomed at each store on his or her app upon entering. The app will immediately advise them where they can find products they are likely to buy, as well as current promotions. The approach and technology will be totally personalized.

One of the main motives for this transformation to app based retailing will be the fact that overhead is becoming even more expensive with each passing year. This will motivate retailers to become more dependent on apps that in some cases, will unfortunately replace the needs for as many humans, currently needed and necessary.

When it’s all said and done there will be much fewer retail chains in the future then there are even today. Consolidation, buy-outs, take overs, will continue to occur just as they have for the past three decades. Some things never change! However, thanks to technology, retailing will continue to become increasingly profitable, so as long as there will continue to be large numbers of people with jobs to buy the goods! But now we’re into a long-term labor and economics discussion and that’s for another day!

What are opportunities in retailing’s future? Hearing the announcement today that Macy’s is planning to close up to 40 stores during the first quarter of 2016, it makes me think that too many locations are over-stored, but under-served. Because of, as well as contributing to this situation, entrepreneurs and their startups are blossoming with products and shopping experiences that satisfy specific consumer niches. But are they limiting their bricks and mortar flagships to heavily populated urban environments only? Are their destinations just as narrowly focused?

With the advantage of history, we remember that Sears Roebuck and the introduction of mail order merchandising were one of the first to bring the products Americans wanted to their front door. Interestingly, Sears catalogs were self-described as; “serves as a mirror of our times, recording for future historians today’s desires, habits, customs, and mode of living.” Let me add, “no matter where you live.”

Jump forward to today’s and the immediate future of mail order; the internet. Online shopping and efficient delivery service not only have the ability to bring purchases to the front doors of city dwellers, they also open up the vast markets between urban destinations. Small towns, villages, and farm communities now have access to the items frequently only available to larger urban locations.

In the future, retailers may envision opportunities to cater to smaller population centers as a priority, not as an afterthought. Evoking a strategy of showing pride for local events and people, new startups can be launched and nurtured with a reputation for hometown goodness.