Over the past ten years, we witnessed the birth and global adoption of contemporary social media platforms like Facebook, Instagram and Twitter. Consumption of these platforms skyrocketed, disrupted traditional modes of marketing and advertising, and drastically influenced consumer behaviour. In short, the state of retail had transformed in unimaginable ways.
What will the next ten years bring us? As we transition into the Fourth Industrial Revolution, we are armed with revolutionary technologies such as Artificial Intelligence (AI), Blockchain, 5G Connectivity, Internet of Things (IoT) and Machine Learning (ML).
We identify 4 predictions by extrapolating the developments and applications of these technologies in retail.
The conversation surrounding sustainability will extend beyond the manufacturing of environmentally-friendly products using greener processes. Its definition will start to encompass other aspects such as economic sustainability and the continuity of supply chains even during unexpected, unforeseen events. The COVID-19 Coronavirus situation playing out now serves as a jarring jolt to businesses to diversify their supply chains and develop better business continuity plans to ensure that operations will not be affected by ‘black swan’ unforeseen circumstances like these.
In order to ensure sustainable operations in a globalised world, brands will strive to leverage on Big Data to optimise supply chains while diversifying their resources and manufacturers beyond just one country or region. The Coronavirus incident has demonstrated the shortcomings of relying only on Chinese manufacturers. In the future, brands will continue to seek a middle ground between diversification costs and revenues in order to seek efficiency and sustainability in their supply chains.
As we have previously identified, the Chinese are global leaders in innovating new retail solutions, and are quicker to develop and adopt technological advancements than their Western counterparts. For instance, mobile payment is now ubiquitous in China. A report by eMarketer postulates that mobile payments are used by some 577.4 million people in China, the largest group of users in the world.
In addition, the Chinese pioneered and adopted microvideo platforms such as TikTok and Kuaishou before the West recognised its appeal. In addition, Chinese firms like Alibaba are rolling out technologically-connected spaces that leverage on Internet of Things technology, like Hema Supermarket. Live inventory tracking and the conveyance of product information will become commonplace in the next decade. Chinese retailers also harness Augmented Reality (AR) technology in virtual mirrors to try on clothes at retail stores. These technologies enhance a customer’s retail experience and create a more entertaining and engaging shopping experience than most malls in the West.
With that being said, we believe that brick-and-mortar malls are not doomed to shut. Instead, there will be a more seamless integration of brick-and-mortar and online stores to deliver an immersive omnichannel experience.
In an article with Retail Dive, retail futurist Doug Stephen hypothesises that “in the future, all but the most convenience-based retailers will begin to use their stores as media to acquire customers and their media platforms as stores to transact sales… Retailers that miss or ignore this shift will do so at their peril.”
Driven by 5G or even 6G capabilities, retail transactions can occur faster and more seamlessly than ever before from our mobile devices. In addition, with Virtual Reality (VR) and AR capabilities, we can perhaps even view large ticket items such as furniture or maybe even visualise the interior of an entire store to “shop” and “try on” clothes from the comfort from our own homes.
In addition, faster internet connectivity and our adoption of digital tools will give rise to more opportunities for retailers to leverage on predictive analytics, which involve mining and analysing large amounts of data to gather insights. Digitising physical stores will allow for smoother integration with eCommerce platforms, giving retailers more data sources to track and measure performance and better understand consumer needs, resulting in smarter and more efficient operations.
According to master storyteller Robert McKee’s book Storynomics, digital storytelling is the secret to “capture and hold the audience’s attention” in the future. Frustrated and tired of brands shoving advertisements directly into their faces that interrupt their content consumption, audiences “block, ignore and pay to avoid advertisements”. Look no further than to the success and growing adoption rates of ad-free streaming platforms like Netflix and YouTube Premium to witness consumers’ ire at advertisements.
Therefore, brands are striving to discover ways to integrate their products or services into a story. Customer association with brand values and colours will surpass the effectiveness of advertisements and lead to higher conversions. Famous examples of such integrated customer association include streetwear brand Supreme’s Red Box logo, skincare and beauty label Glossier’s Pink colour and Red Bull’s videos featuring adventurous spirits.
In conclusion, while we cannot predict the future with certainty, these elements present an interesting glimpse into the future of retail. Aided by new technologies and how rapidly technology is evolving, it is truly exciting to imagine how retail would evolve as the decade unfolds.
Fashion Commentator & Creator
Fashion Journalist at Fashive