The future of retail is changing right before our eyes.
The evolution of retail stores has been expedited. The timeline is compressed for the evolution of retail businesses. But many businesses are not ready for digital transformation.
Brands that have invested tens to hundreds of millions of dollars in brick-and-mortar locations are starting to feel the pinch.
In this ever-changing society, the most powerful and enduring brands are built from the heart. They are real and sustainable. Their foundations are stronger because they are built with the strength of the human spirit, not an ad campaign. The companies that are lasting are those that are authentic. – Howard Schultz, CEO of Starbucks
It’s true, especially in crisis — sustainability will be the key factor whether businesses survive or disappear. The strength of the business going into a crisis is going to determine what happens coming out on the other side.
Retail stores are distressed. It is going face months and months of plummeting sales. More than 100,000 stores could disappear by the end of 2025, according to UBS.
The future of retail is predictable…
5 years from now, we will read this article again and see if I hit it out of the park with my predictions. And if not, then this was an article that allowed me to stretch my imagination, exercise muscles of my brain, and have a little fun. What the heck…why not.
I’m not a huge fan of making predictions about anything — because the reality is it’s anyone’s guess. Some make better guesses than others, and the rest of it is just pure speculation who got lucky.
Even though the future is unpredictable, we can learn from historical trends, behaviors, and with a little imagination — predict what the future of retail might look like.
Brands like Clorox, Netflix, and Campbell could not have predicted a pandemic would happen and cause a spike in demand and usage. They just happened to be in the right place at the right time.
Here’s my prediction of the future of retail stores
Keep in mind, the concepts below already exist and in use. What I am predicting is the broader adoption and application of these that will reshape the future of retail.
- Contactless and cashless retail stores
- Expansion of drove deliveries
- Warehouse automation
- Limited access
- Virtual Reality (VR) applications
Let’s dive in.
#1. Contactless / Cashless Stores
This is already happening to a certain degree. The idea of walking in, grabbing what you need, walking out, without having to interact with a cashier sounds far fetched.
But the reality is Amazon has already experimented with this concept and have expanded their footprint in Seattle by opening a full size grocery store with a walk-out technology — with the goal of a better shopping experience and speeding up the process of checking out.
A company like Amazon has the ability to process ungodly amount of data in any format — images, text, video, verbal — so when it comes to erecting more cashless retail stores, it’s just another part of Amazon’s strategy to increase their footprint.
Why? Not many companies have the technology and money to build such an operation. This poses a great opportunity for Amazon to continue their retail domination and consolidation of brands under their control.
Brands will rely on Amazon’s retail stores for product placement. The dependency on Amazon technology will force the future of retail to bend to its rules. Similarly when Walmart controlled its vendors through POS integration, Amazon will do the same — just with more tech and data behind it.
I find it ironic that Amazon, however, that Jeff Bezos’ vision went from an online behemoth to going back to retail stores — but that’s the genius behind the man that he is. With heaps of data in hand, Amazon is now ready to lead the future of retail stores — from design and operation to transaction and retention. Brilliant!!
#2. Drone Deliveries
Drone delivery is exciting! Yes, Amazon is again among the leader in building this army of autonomous drones flying the skies to deliver packages.
But Amazon is not alone in this. Many major retailers are also jumping into considering drone delivery.
“But Derek, this is obvious!” Yes it is. The application of drone delivery will be limited to boxes for now. I can imagine a company like Domino’s to use drones to deliver their pizzas. But for a local restaurant to deliver an order of Sichuan chicken and egg drop soup might pose a challenge.
Scalability is the key here. It’s more efficient for 10,000 boxes to leave the warehouse or 50 pizza deliveries every hour than 3 orders of Chinese food per hour. Logistically, drone delivery could be a nightmare for small and local businesses — but that also presents an opportunity for drone companies to figure out how to connect the dots for businesses of all sizes
You don’t own the airspace
The hurdle is airspace and that’s controlled by the FAA. The FAA must advise and change air space restrictions in populated areas to allow for short-range drone deliveries, like from local restaurants and grocers.
The application for drone delivery stretches beyond retail stores — obviously. But when it comes to the future of retail, drone delivery is here to stay.
#3. Warehouse Automation In Retail Stores
Nothing too new with this for retail warehousing. Amazon has been doing this for years. When I first heard about the Kiva robots, I was floored. The ability to automate warehousing operations and increase efficiency exponentially is innovation at its finest.
But what if this robotic army can be deployed in retail stores? I can’t help but imagine a retail store that is completely (OK, maybe 90% automated) in the near future.
Here is what I envision…indulge me.
My future retail store experience
I walk into a BBQ retail store looking to purchase a new grill. I have my eyes on the Traeger pallet grill or Big Green Egg smoker because I’ve heard so many great things about these bad boys.
The automatic door swings open and I enter in to what appears to be the future of retail.
There’s no sales associate to be found. The BBQ grills are lined up along the store walls as if they’re lined up for customers to see, but one thing has changed. The grills are enclosed in Plexiglas like casing, with a “Do Not Touch” sign next to it.
There’s a strict “no touch” policy enforced.
However, there’s a QR code that you can scan with your mobile device that gives you an augmented reality (AR) immersive experience of the BBQ grills. You can view everything you want to know about each product.
And if you have further questions, you can activate the voice-assistant feature as well. Yes, voice technology will play a big role in the future of retail.
After 30 minutes of looking at each of the grill, I decided to buy the Traeger.
Again, with my mobile device, I click on the “Buy Now” button in my AR experience. After that, I enter my credit card information on my mobile device, and click “Pay Now.”
Once I receive confirmation of my transaction, I get a notification that my Traeger grill is being brought out to me momentarily.
Behold, the magic of robots
I see my Traeger grill floating effortlessly towards me from the back of the retail store — it is being delivered to me by a robot!!!
I take my new Traeger grill back home and proudly grilled the feast for my family. There was no human interaction from the time I walked in to buying my grill.
OK, I admit. There’s probably a few flaws in my example above. But you get the idea.
The idea of automation of the backrooms of retail stores coupled with interactive technology can shape the future of retail and create a whole new experience for shoppers.
#4. Controlled and Limited Store Access
I’ve experienced this recently with COVID-19 restrictions where stores limit the number of shoppers they allow in. Grocery stores and retail stores alike, controlled the flow of customers.
Personally, I’m not sure how well this works to prevent any spread of airborne viruses. But it certainly has become evident that retail stores are embracing this — in hopes to minimize the potential of viral spread.
The future of retail will emphasis social distancing as part of normal business operations. Retail stores, restaurants, and small businesses will operate under necessary health restrictions — those that make use of available technology will survive and thrive, and those who don’t will unfortunately go out of business.
Here are things that will shape the future of retail to control and limit access:
- Online scheduling. Yes. That’s right folks. This will change how retail businesses work. From hair salons and restaurants to pharmacies and retail stores. It will come a time when you are allowed access based on a schedule.
- Purchase allocation. Your basic needs purchases will be tracked or allocated based on the number of people in your household. This sounds scary, like big brother stuff, but it’s not far from reality.
- Selective services. Retail stores could restrict the types of services offered in order to maintain health safety measures. Tight and cramped retail spaces will be eliminated. Capacity inside retail stores will be limited to make sure they do not become overcrowded.
Not related to retail, but I thought this was interesting. Even our social lives will be impacted in the future — guidelines like this from the county won’t go away completely after the pandemic is over. In fact, I predict it take take a different form, but the core of the requirements will be intact.
The implementation of limited access will permeate every form of life.
#5. Virtual (VR) Shopping
Everything is going virtual. Retailers are going to need to get creative, as consumers become more comfortable buying things on the internet.
Online shopping was already booming prior to COVID-19 decimating the job market, slamming the U.S. economy and forcing many retailers to close their doors. eCommerce businesses is booming.
But this pandemic is also affecting other areas of life. It has accelerated the rate of people meeting, learning, working, exercising and even dating virtually.
A huge shift to remote culture is taking place. And retail businesses that want to stay afloat must adapt quickly — speed is essential. Retail stores, especially the small local businesses need to find creative ways to showcase inventory online, and to make sure shoppers have all the information they need to buy.
Of course, this will ignite a boom in eCommerce websites. Local businesses who didn’t know how, or neglected to launch an online website will be forced to do it now.
There will be a rise in VR applications for retail stores. And providers have a great opportunity alike to offer these services to retail businesses.
