Retail today looks a lot different than it did 10 years ago. What will it look like in another 10 years?
We examined some of the macro trends we’re tracking right now to project what the retail landscape might look when we’re on the cusp of 2030 — and beyond. Read on for a look at where retail is going and how both retailers and landlords can keep up with the changes.
1. The definition of retail won’t be black and white. Remember the power centers of the past, when Best Buy, Target, Bed, Bath & Beyond, PetSmart, and others would anchor a center? Now the lineup is completely different. You might have a small-format grocery store, an entertainment center, a physical therapist, a dentist, or even an outpatient center in the same space. There’s no true retail sector anymore, and the lineup at shopping centers will continue to evolve.
Integration will only accelerate. We’re seeing grocery stores adding components of distribution centers within their retail spaces, leasing out 10,000 unused square feet where they’ll have robots fulfilling grocery orders, for example. In a mobile, on-demand retail environment, that kind of integration will be key.
2. But retail still won’t be dead. Obviously. Online shopping and bricks and mortar not only can coexist, they absolutely have to coexist. Customers need control. They want to be able to search for products online and then go shop and explore and have access to the experience of the product as much as possible.
Casper and Warby Parker are two examples of online brands that have worked their way into brick-and-mortar stores. We’ll start to see that pattern grow significantly, as opening tangible stores ultimately helps drive sales online. Whether they’re physically in a store or shopping on their phone in their home, consumers want an experience and giving them the ability to see, touch, and try out the product before they buy gives retailers an edge. The retailers that are able to find this balance will be the ones that thrive.
3. Retail will rethink the customer experience. Retailers don’t necessarily have to compete with Amazon, but they have to compete in a world where Amazon is changing customer expectations. That means making an investment to upgrade stores for a better customer experience. Retailers will use technology to better understand what drives their customers, what they’re purchasing, and what their habits are. In essence, retail today and in the future is about making a connection to the consumer as well as offering a lot of choices, quality products, promotional discounts, and favorable customer reviews as a testimonial to the quality and value of the item and retailer.
As retail provides consumers more of an experience and continues to improve, expectations will only grow. Customers aren’t going to want to wait in line, and two-day shipping will seem like an eternity. They’re going to want a seamless experience, and they’re going to want super personalization. Retailers have to understand that and start to incorporate that aspect into the customer experience. They also have to be savvy to social media influencers and understand how an unknown competitor can become a viral sensation, taking market share quickly based on consumer sentiments.
4. Value and relationships will still be king. Consumers will always leap for a quality item at a good value. This is why TJX stores and Old Navy are still so relevant. Old Navy is even splitting from parent company Gap Inc. and opening 800 new stores.
At the same time, personal relationships and personalized experiences will continue to be of paramount importance. More big shops will learn from the smaller stores about what a caring, personalized customer experience should be. Social media influencers will continue to play a bigger role in gaining loyal customers. And while technology will be running behind the scenes to better understand what customers want, in stores it will still be all about the person-to-person connection.