Over the past few years, there has been a lot of “retail’s death” talk, due to some challenges which have had a huge impact on the retail industry. Primarily, the advent of the Internet and e-commerce technology that lets people interact directly with brands and products, allowing them to gather information and buy products independently; this has consequently led to the “retail apocalypse” crisis, which has caused the closure of many point of sales.
However, retail is still not dead: it has been inevitably forced to change its value proposition.
Retailers should review the traditional model, which expected them to be at the center of the products’ value chain, in favor of a new one, in order to keep pace with this transformation. According to this, only the ones who remain updated with the newest trends can respond to the current challenge in an original and dynamic way; in doing so, they can monitor and manage what can have an impact on their business.
Some important solutions and mantras that have played a significant role in 2019 and that retailers should consider from 2020 onwards can be defined as follow:
Data-driven retail – First of all, retailers should increasingly turn to data and analytics to understand what is necessary to do and to make better business decisions. Because of a reduction in margins and higher costs of retail spaces and personnel, the focus of their attention must be on the optimization of what they already own. It is essential to start from knowing better what they have and to extract value from it.
Predicting rather than fulfilling – Retailers know that nowadays the added value they can offer their clients goes through a more personalized shopping experience. They must know better their customers to extract value from data collected and to combine these personal datasets with artificial intelligence, which can recognize consumers’ attitude and habits and can predict their future needs and requests.
From transactional approach to relationship building approach – Retailers have also had to adapt the way they relate with consumers. The transactional approach has been replaced by a new one, centered on building, developing and maintaining a strong relationship with people. This can be possible, for example, through the implementation of loyalty programs, which allow retailers to stay connected with customers, to offer them instant gratification and to collect data.
Customer single view and brand single view – Another issue retailers should pay attention to is the fact that consumers have now different ways to actively interact with products and brands. For one customer there are potentially infinite touchpoints. The new customer and brand single views require retailers with an omnichannel approach when interrelating with people. In this model, all possible channels are available to the person and are, at the same time, connected to each other. This leads to retail as a complete service.
Social responsibility and sustainability – Retailers and brand should also demonstrate to have an ethical and sustainable kind of behavior. They play an important role and have many responsibilities towards the society they live in. To avoid a negative social impact of their activity and to be truly committed to helping the social environment, sustainability should be synchronized at all levels and communicated in a transparent way.
Digital payments – The latest 2020 trend to consider, which is linked to the strengthening of a people’s positive experience in store, is that of giving customers easiest ways to pay. It is necessary for retailers to integrate wallet technology into sales operations and let people pay with contactless payments, Mobile POS, online bank transfer, digital wallet, mobile proximity payments, and so on.
These are the main digital and innovative trends retailers should pay attention to in the following years. Furthermore, there are also some attempts to foresee what is coming next. For instance, the ninth edition of the Ericsson “Hot Consumer Trends” states that by 2030 we will step into the era of “Internet of Senses”, where it will be possible to establish a strong interaction between digital innovation technologies and our five senses.
As mentioned before, world is changing rapidly and even more is coming next: companies, retailers and consumers are supposed to be ready for it.
Axepta (2019), Negozio del futuro: come si evolveranno i negozi Retail? Innovazioni 4.0 che migliorano la customer experience per aumentare le vendite, www.axepta.it
Osservatorio Innovazione Digitale nel Retail (2019), innovazione retail in Italia: i trend per il 2019, www.osservatori.net
Nielsen (2020), AR and VR will drive omnichannel, www.nielsen.com
Nazir S. (2020), Top retail trends to expect in the roaring 2020s, www.retailgazette.co.uk
Ericsson (2020), Hot consumer trends 9th edition, www.ericsson.com