Personalisation
Will the hyper-personalised shopping of tomorrow mean privacy is dead? The balance between providing a deeply personal experience with privacy concerns, in a fluid regulatory environment, will be a critical one. This tension will require us to re-think existing assumptions about customer service and supply chain.
- How do we gather deep insights into customers without jeopardising their privacy?
- How do we harness the data of consumer movements between locations, stores, competitors, channels and the other avenues through which they move?
- Will physical spaces themselves be personalised to shoppers?
- Could retailers and shopping centres use technologies to present different products or displays to different consumers, in the way that online environments can?
Intelligence
One thing we know about the future: there will be more information available to consumers and retailers alike. Technologies will help retailers and shopping centres gather better data such as real-time consumer behaviour, product stock levels, spatial information and supply chain operations. Increased intelligence could enable adaptive pricing, micro-targeting product offers, budget allocations, and personalised offers and promotions.
- Where (and when) will A.I. take stock of management decisions in retail?
- How can retailers and shopping centre operators make more intelligent decisions?
- How can data from multiple sources be used concurrently to support real-time decision making?
Flexibility
An inert or stagnant shopping experience will quickly become a dull one. Flexibility in the design of physical spaces can keep the experience fresh and engaging. Beyond providing consumer experience, retail spaces will need to evolve to include mixed-use and temporary installations like pop-up stores.Balance will be key. Centres must deliver the consistency that consumers depend on with the flexibility to offer new and exciting experiences in an efficient way.
- What do consumers value more: consistent experiences, or ever-changing ones?
- Are short-term pop-ups a smart long-term strategy?
- How can retailers and shopping centres change things up without losing focus?
- How will centres interact with the users of mixed-use or temporary spaces?
Transparency
With an unprecedented amount of information in their pockets, consumers do extensive research before they make a purchase. They’re influenced by reviews. They demand transparency, so in the future, retailers will need to offer it voluntarily. They will need to ensure their processes, including their supply chain, stand up to social scrutiny. How retailers tackle this demand could be the difference between success and failure.
- Will retail transparency be the value proposition of the future?
- How can retailers best manage the need for transparency while still maintaining a competitive advantage?
- Can transparency be turned into an advantage? Who’s doing this best, right now?
Collaboration
As the industry fragments, the idea of the small niche retailer and the large online operator being in direct competition is neutralised. It opens up opportunities for collaboration through complementary offers or services, information sharing, shared logistics programs and even shared loyalty programs.
Evidence suggests increased collaboration among consumers too, such as through buying groups and co-ops, building on existing daily deal and group-buying sites. The popularity of consumer reviews is plain to see.
- Will mass market retailers and niche players find a way to work together?
- Could decreased direct competition between mass market retailers and niche players lead to an increase in formal mergers?
- Will some centres focus on experience while others focus on convenience, and then collaborate in some way to cater to different shoppers?
Sustainability
There’s no getting round the need for all businesses to look at the impact they’re having on the environment. Retailers will need to act sustainably and responsibly even when consumers’ eyes are turned the other way. A commitment to sustainability will not only be necessary, it might unlock competitive advantage, help retailers engage with consumers, and aid the creation of strong communities around the centre, retailer or brand.
- Will the future of retail be driven by a socially conscious market?
- How will consumer behaviour evolve as people become more aware of what sustainability entails?
- What level of transparency on the social and environmental cost of their products and operations will be expected of retailers and shopping centre operators?
Community
Retail will increasingly need to serve local communities. Seems obvious. The local shopping centre must be an enabler of community services, linking existing operators to the community by giving them the framework to operate in. The challenge will be to show a triple bottom line benefit.
- How does the local shopping centre foster a rich relationship with its local population?
- How can centres ensure these are not just superficial arrangements, but truly supportive and collaborative relationships?
Fragmentation
Small retailers which focus on specific product categories or offers will increasingly emerge in niche spaces, while larger, predominantly online retailers will continue to flourish in mass markets. The fragmentation between large mass market retailers and small niche players can be expected to widen.
- How will this effect mid-sized operators or those trying to serve multiple needs without the scale of the largest players?
The final driver for the future of retail is experience
We must move beyond a simple transactional focus towards a more compelling shopping experience. On top of their core products or services, retailers will need to come up with ways to engage and inspire their customers through storytelling, education, entertainment and relationship building in order to develop deeper connections. Sounds simple, but it’s all in the execution.
In-store experiences like cooking or exercise classes can enhance the customer experience. But transactions are a retailer’s lifeblood.
- How can retailers provide an engaging experience that still leads to sales? How can experiential elements be linked to the retailer’s core value proposition?
- Will bricks-and-mortar stores move further towards purely experiential spaces, or will there remain a balance between experiential and transactional elements?
- Will the expectations of staff evolve as a result of the focus on experience? How can staff be rewarded for encouraging customer experiences even if it doesn’t lead to in-store sales?
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Following a comprehensive literature review undertaken in partnership with Swinburne Business School, we’re fostering a conversation on the future of retail on LinkedIn, and we’d welcome your perspective. Add your comments at @FrasersPropertyAustralia.
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Frasers Property would like to acknowledge our collaborators Swinburne Business School, and particularly @JasonPallant
