Shops of the future: what kind of transformations retailing could face by 2040

Shops of the future: what kind of transformations retailing could face by 2040

6-11-2019

It's hard to predict what the world of the future will be like. But change already surrounds us now and is rapidly taking root in our lives. The 21st century is changing so rapidly that it becomes difficult to keep track of all innovations. However, tracking the dynamics of change in the retail sector and forward-thinking forecasts are important for building an effective strategy in the market. That's why we should think of such questions:

— How can upgrades and technology affect retailers?
— Will the stores remain as they are now on the market?
— How will commodity-money relations and communication with customers be transformed?
— What does retail generally expect in 20 years from now?

And it is worth considering even those options that may seem absolutely incredible at the moment. When fantasists presented the world of the future in their works, their assumptions about progress seemed unattainable. Video calls, clocks with color display, mobile phones, credit cards — could any of the authors imagine that his fantasies in just a century or two will become commonplace?

Samples of the first credit cards appeared in the 19th century, in Edward Bellamy's utopia "Look Back, 2000-1887". And 63 years later, they really came into our lives and even became commonplace. Today plastic cards can be found in almost every wallet, and electronic money is increasingly becoming a replacement for cash banknotes. Cashless payment methods and the creation of the Internet gave life to hundreds of thousands of online stores. Could such ideas be taken seriously and appreciate their importance in 1888, when the novel was first published by Bellamy?

Changes affect both the needs and demands of consumers. Retail only adapts to new values and demands of customers, and technological breakthrough becomes a tool that transforms the whole picture of the world of sales. But what demands will the consumer have in the future? What shifts can occur in the trading structure?

Service v.2020+20

Our world is more and more filled with technology and robotics. At the same time, our lifestyle is changing and its rhythm is accelerating. Consumers are increasingly trying to save their time and want to get what they want without leaving home. This demonstrates the growing popularity of delivery and online shopping.

In the future, this trend may lead to the fact that the stores will disappear warehouse as such, or even no goods. Shoppers will come to retail outlets to use robotic helpers to pick up the goods, try on a virtual mirror, or test in three-dimensional emulation. And in the future — to make a purchase online and order its delivery. Even now the boundaries between real and virtual are becoming more and more ephemeral. And, most likely, in the near future, this trend will only increase.

Euromonitor International, a company of strategic market research, has published the results of its research, on the basis of which it is possible to make some predictions about the possible transformation of retail in the future.

The very notion of the product is changing

What does the term "commodity" mean? Classical economic theory gives us the following answer: "A commodity is a product of labor with two properties:

1. The ability to satisfy someone else's need (consumer value);
2. The ability to be exchanged for another commodity (exchange value).

But the world is changing, and consumer demands and expectations are transformed with it. Is the classical understanding of "goods" able to reflect the situation in the modern market? The scheme of commodity-money relations was complemented by a wider and more dynamic interaction between retailer and consumer. In 2019, shopping often began to be carried out without a specific set goal of purchase. Shoppers go to stores with the desire to have a pleasant time, have fun, get bright impressions and positive emotions. Now more than ever, retailers offering similar products and competing in the same price segment have to influence the emotions and feelings of the buyer — this is the basis of advertising. And these trends will only get stronger.

Results of researches of global strategists and analysts Euromonitor International show: half of buyers (47%) wish not only to look, but also to try the goods before its purchase. From this it is possible to draw a conclusion that even in 20 years traditional physical points of sale will not disappear, continuing to remain a significant part of consumer experience. But their functions may change.

The Internet brings together retailers and consumers from different cities and countries, and the turnover of Internet sales is increasing every year. It's hard to even imagine today's youth without smartphones. The possibilities of the Internet have already destroyed the traditional way of selling. For many, it is easier and more accessible to leave their requests for services or goods online (on the website or in an application) than to call consultants and go to the store. Consumer practices and demands are changing, and retailers only have to accept this challenge and follow the consumer into the world of the Internet: create online stores, apps, groups and communities, search for new customers and promote products in messengers and social networks.

Along with the increasing importance of digital technology in retailing and the changing image of the product, a shift in consumer value systems has taken shape. Instead of quantity, the priority of quality now prevails. Customers are eager to get good service and new experience. Brands will be able to compete with each other, arguing that the high price of a product is the opportunity to gain unique experience.

What transformations will affect retail stores

Today, the majority of consumers decide to buy long before they visit a physical point of sale. This is most evident in the niches of electronics, home appliances, cars and other products of the highest price category. More and more in demand in retail are those solutions and technologies that help to overcome physical barriers between consumer and product supply. The task of innovations becomes to interest, to offer new experience, to cause admiration of the goods. While the main priority of physical retailing will remain the consumer goods, which enjoy regular popularity, and responsibility for impulse, unplanned purchases.

Perhaps in the near future it will become a reality that voice assistants will start helping customers make their choices. And customer service and order processing will be carried out in a fully automated mode. Stores and supermarkets served by robots are already appearing in the world (example — Bingo Box). It is likely that completely new formats of shopping spaces will appear, combining the sale or presentation of goods with unusual practices that create the very "unique experience".

Such examples have already started to appear in retail and are gaining popularity. Leroy Merlin's "Factory of Ideas" has become one of them: a completely new zone has been placed in the hypermarket, where master classes for visitors are regularly held. Coming to buy in this chain, the buyer also gets an opportunity to take part in the master class and create something with his own hands. Creativity becomes a tool to help create an unusual experience for the customer. Perhaps it is this experience that will determine where to buy the equipment, products or materials.

Zoning a retail store in 20 years

Successful development of online trading platforms, technology, change of consumer values and demands inevitably contribute to the gradual renovation of physical trading platforms. Changes may affect the design of shop windows, zone planning, delivery schemes. Already today video monitoring systems allow to collect analytics of reactions of buyers to different variants of the device of trading space. This information helps to create the most comfortable space conducive to high sales.

Main characteristics of retail store zoning by 2040:

— Showcases — in the world of the future, they will definitively move from a decorative function to information. With the help of showcases it will be possible to inform customers about promotions, novelties, unique offers.
— "Entry" and "exit" — video monitoring systems are being improved. With the help of visitor identification at the entrance to the store, the system is able to recognize the visitor and create personalized offers based on the history of purchases. At the exit, the withdrawal of money from the account can be done automatically, not even the cash desk is required.
— The test zone is the place where the most advanced innovative technologies will be placed. "Smart fitting rooms" with electronic mirrors can already be found in some stores. In the future, such technologies may quite successfully replace both consultant and stylist. In addition, thanks to the identification system, a virtual mirror will be able to make offers to visitors and create options for the image, based on previous preferences and other accumulated data about each customer.

      Retail innovation forecast from independent experts

      Recognized experts in retail innovation, the authors of the modern concept "Shop 4.0", offered their vision of retail in 2040. In 20 years' time digital doubles of customers may appear in the technological arsenal of retail, where they can evaluate the product from all sides. Each user will have the entire history of his purchases and requests — for generations to come. This will provide an extensive basis for predicting consumer demand and evaluating purchasing power over long periods.

      Even the assortment can be expanded to an unprecedented scale due to the possibilities of using such data. The release of personalized products for each is a likely reality. The consumer will no longer have to look for products — computers will be able to do this for him, and it will be sufficient for the buyer to approve or reject the options selected for him.

      New technologies will really change the picture of retailing. Experts agree with Euromonitor International's predictions: "Cash-free services, which are now gaining popularity, will be a typical solution for retail stores in the future.

      Experts also anticipate the emergence of a new genre in the film industry — "Film of Things". It involves the use of cinema to promote products and their advertising in a personal manner. Experts envision it as "a highly emotional film with you in the lead role. You and the product you want to buy".

      Perhaps in the future, there will be no segments of the retail sector that are now familiar — all of them will merge into one segment, whose task will be to satisfy the needs of the buyer and all his needs. With a single universal base of product offers and an individual approach for each consumer ...

      Many of these predictions may have seemed too fantastic to you. But as history shows, technical fantasies often come true over the years. And already today, some of these technologies are beginning to be actively used in the retail world.