As the sector continues to transform itself, what is the future of retail likely to look like? And what will it take for retailers to succeed in this brave new world?
Omnichannel retailing will be key
For consumers, the debate about online vs bricks and mortar retail is irrelevant – it is simply the same product delivered in a different way each with their own advantages and disadvantages. Retailers who can span all these channels will have an inherent advantage.
However, true omnichannel retailing that delivers competitive advantage isn’t just about enabling m-commerce alongside physical and web sales. It’s about creating a business that has a single view of stock – one where consumers (and the business) can see where any piece of stock is at any one time, and can purchase/return through any channel. It empowers the consumer completely, providing service on their terms at any time: and it goes a small way to recovering the estimated £1bn lost every month due to poor stock management. It’s also a change that can’t come fast enough: in a recent survey, 46% of respondents said they "would like retail to combine the best elements of online and in-store to create a single, consistent experience no matter how I shop". This is an operational and organisational challenge stretching beyond digital into the logistical and financial backbone of a retailer.
The most successful brands will treat their online shop as a flagship store
Successful omnichannel retailers will be seeing as many sales through their online store as their most successful flagship stores: a fact borne out by retailers like Burberry. But do retailers’ online presences currently get the same attention as a flagship store? In the future, the most successful retail brands will invest in their online presence as if it was one of their most important stores ensuring it is staffed with the best brand representatives within the organization, and continually rotating stock and display to maximize effectiveness. After all, a visit to a brand’s flagship store should deliver an experience that’s true to the brand, be effortless to shop in, be a social experience, offer unparalleled service and leave you smiling; regardless of whether it’s physical or digital.
Different channels will be used to deliver different experiences
Shoppers know the difference between shopping online and shopping in-store; yet so many retailers treat them the same. In the future, retailers will recognise the difference in channels, and use them to their advantage. Bricks and mortar will supplement online and vice versa to provide the best experience for the customer: an insight not lost on online retailers like Amazon – with their Delivery Lockers – Screwfix and even OakFurnitureLand, Burberry’s flagship store on Regent Street or any Apple store. Successful retailers will create an experience around their physical presence, maximizing the benefits of personal interaction, staff expertise, immediacy and the social nature of shopping with the convenience and simplicity of digital. Mobile will celebrate the simple decision, the one-click purchase and the repeated behaviour.
Loyalty will be rewarded seamlessly and instantaneously
Great retailers know the value of loyalty, but current systems are clumsy, inaccurate and don’t leave individuals feeling particularly special. However, soon we will see the end of stamps and plastic cards. Identified purely by our credit cards, we will be rewarded by progressive retailers according to each and every pound we spend: recreating the Quidco model on a broader yet more personal basis. And that’s with existing technology: once low-power Bluetooth and NFC potentially catch on, expect to be recognized by name in your favourite store. If you spend enough, of course.
Retailers will embrace showrooming and fitlifting as a challenge
Showrooming and fitlifting (trying out goods in a shop but purchasing at an online competitor) are seen by retailers as activities that will destroy their businesses. Some have reportedly even gone to the lengths of installing mobile blockers and lasers to disrupt it. But these activities are reflections on physical retailers not delivering to consumer needs. In the future, successful retailers will accept this and begin again to welcome the footfall: challenging themselves and their business practices to overcome the inertia towards purchase rather than sticking their head in the sand and hoping it will go away.
Ultimately, consumer behaviour has changed irrevocably. Consumers don’t see channels and they don’t see high street and online as different categories. In the future, the best retailers will respect this: and they’ll benchmark themselves against every competitor, not just the ones that look like they do.
This article was first published on The Wall Blog