COVID-19 has transformed global retail and changed shopping habits. Over the past 3 years, the industry has adapted to changing consumer behaviour and expectations. The post-pandemic changes have forced retailers to rethink the role of physical stores and consider online shopping as a powerful competitor.

Experts have interesting scenarios for the future of the industry. Let's take a look at the forecasts and opportunities that await retail in the coming years!

#1. Forecast by Futurice — a bright future filled with opportunities

The Futurice team, a digital transformation company, worked in close collaboration with experts from 7 groundbreaking companies and 1 university [Aalto University School of Business, Kesko, Valio, Olvi and Berner, Kaivo Partners and others]. They created future vision about the retail of 2030 and identified seven opportunity areas for the retail domain:
- the new narratives of adulthood. Retailers should offer services and goods without gender differences;
- a large amount of data. Data helps to create and offer accurate, predictable and personalized products and services;
- services based on ecosystems. Retailers need to prepare to offer products as a service to customers. To do this, they need to leverage brand ecosystems and data exchange in the supply chain;
- collaboration with influencers. Cooperation with influencers and micro-influencers on social networks helps to reach as many consumers as possible;
- digital shopping experience. The business must ensure smooth and fast delivery and encourage customers to visit offline stores;
- transparent supply chains;
- simple choice of ecological options. It is necessary to establish cooperation with partners to optimize the use of resources and waste management.

The Future of Retail 2030 outlines four possible scenarios for the future of retail. We will present two of them, as they are rapidly gaining momentum today.

Scenario 1. Live shopping experiences with influencers. The future of shopping is a hybrid of TV-shop and TikTok, where retailers and brands cooperate with influencers. Physical stores will thus be transformed into a source of content and pick-up hubs. Brands will become competitive only if they make global shopping more environmentally friendly and the shopping process more interesting for consumers.

Scenario 2. Developing optimized groceries-as-a-service systems. In this version of the future, most consumers order products as a service. The retailer that gets last-mile delivery right will rule the ecosystem. Companies that build a network of warehouses or darkstores, use AI aided robotics, organize a delivery system, and offer consumers personalized data-driven services can become market leaders.

A new era of shopping by RETHINK Retail — growing role of c-store

In the reportA New Era of Shopping: The Rise and Role of Convenience Retail the RETHINK Retail team focuses on the transformation of convenience stores. This format is growing rapidly in the retail sector. Smaller stores are located in residential areas or places with high traffic. Prices tend to be higher than in other retail formats, but accessibility and the ability to make an instant purchase outweighs the cost.

Large chains open stores of this format, offering pick-up services [for example, Auchan opens Pick Up Point in all cities where the brand's hypermarkets operate].

The RETHINK Retail report outlines five key aspects to consider for c-stores:
- lines and wait times;
- service expansion;
- retail media;
- personalization [loyalty programs];
- sustainability.

This will allow stores of this format to respond to changes in consumer preferences and gain a new audience.

#3. ПForecasts for the industry from Mckinsey experts — online is here to stay, but physical stores will be transformed

It's impossible to argue with McKinsey experts: online sales are not going anywhere, but physical stores are going to be transformed:
- stores will maintain their current layouts [maybe not all],
- fully transform into dark stores,
- become a hybrid of the two.

The Mckinsey team offers a plan to help stores assess their opportunities. When planning for the future of their stores, retailers need to:
- define the future role of the physical store in an omnichannel network. The offline channel should complement online platforms;
- plan the store transformation along three key dimensions:

1. consumer [what and how consumers are buying; consumer experience inside the store; target last-mile delivery speed];
2. Infrastructure [density of stores and local last-mile network; store layout, fixtures, and signage; integrated IT systems];
3. store operations [assortment, costs per order and target delivery speeds];

- rethink the omnichannel in-store shopping experience. The omnichannel players need to create effective conditions for their customers and implement innovative strategies:

1. transform the store space. Retailers should focus on the potential of using their stores to increase the speed of last-mile delivery, but maintain the in-store experience;
2. optimize store operations. You can use part of the area as a storage room;
3. use digital technology to deliver;
4. launch a new digital concept store;
5. expand omnichannel experiences beyond traditional stores.

Customer behavior and expectations have changed. They continue to evolve, so companies need to keep physical stores relevant and meet the needs of customers at every stage of the purchase.

McKinsey`s experts talk about 5 "zeros" that help retailers reduce the margins for error in five areas:

- Zero difference in channels. Shopping should be seamless;
- Zero need for assistance. Customers want to be able to enter and exit a store without having to talk to a salesperson unless they need help. But it's a must during consultations and when certain technologies don't work;
- Zero wait for delivery. Speed expectations have risen, so no one wants to wait a week for an online order, as they did 5 years ago;
- Zero tolerance for inaction on equality or sustainability. Consumers value sustainability, diversity, equity, and inclusion;
- Zero wiggle room for talent. Companies should improve the employee experience, make value propositions to attract new staff, and help develop their abilities and skills.

#4. Retail stores and shopping malls as multifunctional spaces — CAAD Retail Design's view

Specialists of the Barcelona design studio CAAD Retail Design, who have been creating commercial spaces for over 45 years, have their own forecasts for the future of retail. In their opinion, stores will become multifunctional spaces that combine retail and services.

Multifunctional spaces are about experience, disruption, omnichannel approach. Design concepts, personalized experiences, innovations, showrooms and pop-ups, integration of e-commerce and physical shopping take customer interaction to a new level and strengthen relationships with customers who have become extremely demanding. Customers don't come to these places because they need to buy something, they want to visit a specific store.

Examples of multifunctional spaces by CAAD Retail Design

Slowear concept store in Milan turns into a cocktail bar at night.

The Rapha brand opens bicycle shop-cafeteria — clubhouses. The photo shows the space in Soho, opened in 2012. Today it is a landmark for the London cycling community.

The future of retail and all its transformations depend on consumers and their buying habits. They are the drivers of all trends. Retailers need to adapt physical stores, personalize the shopping experience and provide the best possible customer service. This will also enable them to compete with e-commerce and those brands that offer only online shopping.