The idea of customer purchases being limited to brick-and-mortar stores faded long ago.
Digital technologies, such as the Internet and mobile devices, and evolving shopping channels have made it difficult to distinguish what is and is not a “store.” While the role of the traditional store is evolving, it is likely that brick-and-mortar will remain a significant channel of retail commerce in the future.
The customers’ desire to shop anytime anywhere is not only impacting retail adoption of various technologies, but also forcing retailers to adopt new store formats. Stores afford customers sensory advantages, the ability to try out products, and immediate gratification. Stores also can provide an enriching entertainment and social experience. Finally, retail associates can provide meaningful personalized service. On the other hand, pure digital shopping channels are viewed as providing immediate access to more information than may be found inside a store.
We envision that, in the future, a specific retailer may adopt various formats, while ensuring a level of brand cohesiveness across these formats.
Future Retail Formats
Some stores will serve purely as drive-through pick-up locations, as some shoppers will move away from large stock-up shopping trips to more targeted, time-efficient, needs-based trips.
Other stores will serve as product showrooms that enable the customer to interact with or try out products, as well as interact with sales associates and other customers (both physically and remotely).
Some stores will serve as immersive experiential centers, as technology will enable shoppers to control their shopping experience. These stores will be venues for collaboration and experiences that cannot be provided online.
Brand stores will be created that focus more on promoting the brand than on selling merchandise. The purpose of these stores will be to communicate the brand’s values, social and community involvement, to convey customer stories, as well as to provide product/service information and ordering.
Stores that offer community services as well as retail will provide services that local communities can no longer afford, and locate stores within or near those spaces. For example, a retailer that also integrates digital technology and physical merchandise into the space may operate the local library.
Small, specialty stores will continue to fill certain niches, as well as evolve. For example, the corner butcher will continue to serve a vital function for customers desiring a high level of service and unique products not available at a chain supermarket.
Finally, not all of today’s store formats will go the way of the dinosaur, as certain customer segments will prefer to shop at more traditional stores. Yet these store formats will continue to advance, incorporating newer technologies or appealing to specific customer segments.
Within these various formats, emerging technologies that customers will interface with also will continue to mature, including: advanced mobile device use with store and product interface; Big Data applications; mobile and integrated POS; cashless payment (mobile wallet); digital assistants; etc.
Customer Interface Technology
Perhaps the most pervasive advances envisioned are related to an in-depth understanding of individual customers and their product/service desires. Customer insights, collaboration, and choice will be major trends.
While each retail vertical and format will evolve differently, the following are some general abstractions regarding how retailers will interface with their customers:
- Customer access to information will be unlimited.
- Big Data will provide retailers with unlimited amounts of information about customers.
- Certain classes of merchandise will become less standardized and more customized to fit a specific customer’s desires.
- The concept of pricing will change as retailers respond to supply and demand factors as well as customer-desired customization.
- Products themselves will directly communicate with the customer, as merchandise on the shelf will be more interactive with the shopper.
- The Internet of Things will lead retailers to connect the dots and use this information for the benefit of the customer.
- Technologies that allow specific customers to be identified will be adopted and used actively.
Read more about this topic in the Platt Retail Institute Research Article, “The Future of Retail: A Perspective on Emerging Technology and Store Formats.”
Margot Myers is Director, Global Marketing and Communications, at Platt Retail Institute, an international consulting and research firm that focuses on the use of technology to impact the customer experience. She manages strategic marketing and communications programs and serves as the managing editor for PRI’s publications and website.