Mapping Out the Next Ten Years on the High Street: How Can Retailers Be Innovative?
As we begin a new decade, retailers are wondering how to stay ahead of the curve and maintain their innovative and competitive edge over the next ten years. Several emerging trends and current realities will have to be taken into account by organizations looking to be market leaders in the 2020s.
Adapting to New Physical Realities
According to Sourcing Journal, 11,250 stores closed in 2019, making it the greatest year for store closures to date. Unless retailers significantly adjust the way they do business, this trend is likely to continue. But there are opportunities to be had in these changing patterns of real estate occupancy.
As big-box sellers and other brands vacate some spaces or find new uses for others, retailers of the 2020s can expand on the "shop-in-shop" model that's enabling brands to set up kiosks, event areas, and ad hoc installations catering to niche markets. These partnerships can drive foot traffic to physical stores through unique brand collaborations, immersive and experiential retail, or making limited-edition merchandise and special services available to consumers.
As more manufacturers choose to deal directly with customers, stores serving the direct-to-consumer market will continue to proliferate. If more traditional retailers wish to compete, they'll need to explore avenues such as hosting exclusive brands and private labels to retain the loyalty of their clientele.
Taking Self-Service to the Next Level
Technologies like RFID (Radio Frequency ID), connected sensors, and mobile apps are making self-service the method of choice for routine transactions such as buying fuel, convenience items, and groceries.
Solution providers are already beginning to offer alternatives to Amazon Go. As data analytics and AI capabilities improve, it will be possible to use mobile device identities to more easily track customer navigation patterns and product interests.
For retail operations, self-service centers can ease staffing burdens, with assistants only required for short periods of time each day to replenish stock or tidy up the premises. And the self-service model of the 2020s will enable retailers to keep tighter control of their inventory and achieve a mix of products, balancing out customer demand for high-end goods with more mass-market brands.
Expanding Fulfilment Options
With consumers giving equal weight to digital and physical methods of buying, physical retailers will need to establish fulfillment centers for handling online purchases.
Grocery stores are already leading the way in this area with micro-fulfillment centers that enable them to operate with very low margins while still providing satisfaction to consumers. The concept can also work for large department stores, which can ship specific items or product lines from specialized fulfillment centers.
A New Focus on Healthcare
As the global population gets proportionally older in the coming years, the market will grow for healthcare and wellness products and services that cater to seniors. Simplicity and convenience will be the watchwords for these commodities, and brands will need to forge appropriate partnerships for service delivery.
Some major retailers are already operating in this space. Walmart has opened its own stand-alone healthcare clinics and Target is revamping its healthcare offering via its CVS partnership.
Since department stores generally attract an older demographic, expanding product lines to include health and wellness ranges, and collaborating with local hospitals and care units should be on their agenda for the 2020s.
Giving Back to the Community
Matters of environmental and social responsibility remain high on the list of priorities for consumers of all ages, and brands that can demonstrate good corporate citizenship and the use of sustainable business practices are positioned to succeed in the coming decade.
Beyond the physical manifestations, such as sustainable store design, recycling, and the repair or repurposing of materials, successful brands will also need to create an enabling environment for the consumer. This could include the set up of recycling centers, guidance and resource centers in neighborhoods and online, or the donation of services and funds.
A New Approach to Privacy
To the average consumer, the situation regarding how brands collect and use their personal and other information remains unclear. The growing importance of digitally sophisticated Millennial and Generation Z consumers is changing this to some extent — but in a decade where powerful legislative frameworks like GDPR (the European Union's General Data Protection Regulation) and the California Consumer Privacy Act (CCPA) are fully in force, retailers must embrace transparency and adopt secure and responsible data-handling practices just to keep from running afoul of the law.
As the third-party cookie becomes increasingly unavailable to marketers, opting in and the collection of first-party consumer data will be critical to commercial survival. And in line with transparency, brands will need to make it clearer to their customers how to opt-in to services that require personal data and how to opt out of those that don't.
Many consumers are willing to sign into apps or company websites and divulge information if they feel that doing so will be of some benefit. Successful retailers of the 2020s must be prepared to pull back the curtain and tell customers things about their companies and their products that assist buyers in making safer, better, and more cost-effective purchasing decisions.
In the spirit of reciprocity, consumers will be far more willing to share information with their preferred brands. These successful brands are also likely to offer loyalty programs where customers can exchange personal data for discounts and rewards.
Final Thoughts
Looking ahead to the coming decade, Lauren Bigland, VP Brand Strategy & Communications at S4M has this to say: "There's hope for the high street in the 20s. Customers will see the physical store experience as a key part of the buying journey and brick and mortar stores will adapt to meet their new expectations. Sports stores may offer coaching, technology firms might teach how to correctly use their software, fashion retailers could hold talks on sustainable fashion. The more retailers lean into the experience, the more successful their shops will be. Over the next decade, the industry will need to innovate to reliably attribute every single one of your customers' touchpoints instead of last click only. Mobile data will play a large role, as it joins up advertising channel, location, eCommerce and payment channel."
New roles for the physical store, self-service, privacy, and sustainable practices are all set to be hot topics at eTail Europe 2020, which takes place from 23 - 24 June, 2020, at the Queen Elizabeth II Conference Centre, London.
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