Retail isn’t dead, but the retail industry as we knew it is…
A new kind of retail is emerging as we write these words – an industry supported, enhanced, and upgraded by technology. 2020 was a disruptive year for every industry, and the Retail Industry was no exception. The retail industry had to think outside the box and find ways to reconnect with customers, even at a distance.
Some retailers managed to find opportunities amidst the crisis and came up with innovative ways of doing business, reorganising operations, rethinking business models, and taking advantage of existing technology to keep moving forward. Now, the retail industry has the opportunity to adjust and adapt to new customer needs and expectations.
Of all retail sales worldwide will be online by 2024; Source: Statista
Free DownloadWhat we find when we do eventually reach the other side of the crisis will not be a retail reality that was merely accelerated by COVID-19. Rather, we’ll find an industry and consumers reshaped by it – forever.
Digital Xperience in Retail
According to Statista, retail e-commerce sales worldwide in 2020 amounted to $4.28 trillion. By 2022, e-retail revenues are projected to grow to $5.4 trillion. These numbers show a clear tendency towards the digital economy. In our view, there are two main drivers of the disruption of the retail industry: Technological advancements, supported by the emergence of technologies, and customer behaviour changes, empowered in part by the mobile and digital world.
These two forces are irrevocably transforming the retail business. Empowered consumers connected 24/7 through their smartphones have an enormous amount of information at their disposal that they rely on to make purchase decisions.
Media
Metaverse
Phygital
Challenges & Opportunities
Results & Insights
Future of Retail
While analysing this industry and reflecting on the drivers of change mentioned previously, we concluded that the retail industry needs to address a range of challenges. On the other hand, industry trends point to various different themes.
Challenges
One of the most challenging aspects retailers need to tackle going forward is their customers’ growing needs and expectations. The last year alone has changed our shopping habits drastically. There are no guarantees that we will revert to how we behaved in pre-pandemic times.
Consumers increasingly look for convenience in their shopping experiences. We want our needs and desires to be fulfilled right now. We expect that super-fast deliveries will become the industry standard in coming years. But first, retailers will need to continue automating critical stages of the delivery process.
Contextual information is essential for the shopping experience to become relevant. You need to have the technology and capacity to turn your customer’s data into actions for that to happen.
Why does your brand exist? Why do customers need your brand in their lives? What values does your brand bring to a customer’s life? Studies have shown that brands that communicate purpose evoke heightened physical and emotional responses from consumers
Trends
The climate crisis is finally garnering the attention it deserves from the masses. Sustainability has been a topic for a few years now, but it has never been the focal point for so many industries as it seems to be now. We can no longer ignore the problem of climate change or sweep it under the rug.
Wwhile it’s true that the customer behaviour changed during past lockdowns, for instance, relying on online shopping and home deliveries, physical stores do still have some advantage over online shopping. Stores allow retailers to give their customers a truly memorable and immersive experience.
Almost two years later it has become clear that even though customers might miss visiting physical stores and will not stop doing so, digital retail is also growing.
