What is the Future of Retail? These Are Our Predictions for 2020
To everyone working in retail: We have good news and bad news.
The good news is that innovation is radically changing retail.
The bad news is that innovation is radically changing retail.
Let’s be honest - this is not news anymore.
So we’re going to try to do better than that. We’re not going to tell you what’s happening right now. We’re going to try to guess what the future of retail will look like. The many different ways in which retail is changing. The trends that will shape retail in 2020.
And, fortunately, we’re not alone in this!
At Plug and Play, we match large corporations with cutting-edge startups disrupting their industry. And this puts us in a unique position, right in the middle of everything currently going on.
To create this article we have reached out to PNP experts, but also corporations and startups that know retail and the trends that are revolutionizing this industry.
And these are their predictions about the future of retail.
“Retailpocalypse” will (finally) be behind us
Pieter Lammens is the Director of Lafayette Plug and Play, the Paris based European Retail Experts Platform focused on accelerating leading Retailers and E-commerce players’ transformation through startups.
This is his view on what will happen in retail in 2020:
“The retail market has been fragmented for a long time and is now heading towards a more consolidated model, and retailers are currently striving. One year from now, only the most agile retailers will survive and bloom again. The immediate investments have to be targeted on supply chain and inventory optimization. Pure players have set new customer service standards that have to be matched by traditional retailers: fast deliveries, click and collect, ship from store, easy returns.”
“In 2020, retailpocalypse will be behind us: stores will still exist, but their prime function will be customer experience. Tedious tasks, like logistics, will become more and more automated, but we have to keep in mind that the five human senses can only be stimulated in store! And so far no bot or personalization tool has been able to even come close to a good sales assistant.”
Data exploitation will change everything
Amelie Poisson is Director of Marketing, Brand & Customer Experience at La Redoute, one of the leading companies in e-commerce in France.
“Data exploitation is profoundly changing the way that we do business. This is a great opportunity to reinvent ourselves, and it’s key for every retailer. Personalization will always be an issue to improve the experience of our customers and ensure proximity and advice.”
In Poissons’ opinion, there are three trends that will shape retail in 2020:
The development of responsible consumption. “Already very present in food,” this trend “will spread across all sectors, and brands must be ready for this new expectation of customers.”
The "new retail" or hybrid business between physical and digital experience. There won’t be “a barrier for the customer”, “who chooses at any time its omnichannel purchase mode (store app, payment without cashing, etcetera)”
New ways of marketing and interacting with the customer: Via “messaging, social networks, global platforms (like Tmall in China), etc.”
Agility and efficiency will be more important than ever
Christian Kunz is Director of Corporate Development & Co-Founder of Lafayette Plug and Play.
“Having been working with many different types of retailers (apparel, food and luxury), over the past 3 years, what is clear is that different segments of the industry are being disrupted at different rates. Electronics and apparel retailers have been at the front lines battling with the disruption happening in their industry, but we can imagine that, in a year, the food retail and luxury sector will be increasingly impacted as well.”
“This is why it is important for these corporations, including Carrefour and Richemont, to take a proactive stance and tackle the challenges that they’ll face shortly. Agility and efficiency across the whole organization will be key for all of these retailers if they wish to thrive in the age of not only Amazon and Alibaba, but also the age of digitally native brands and the marketplaces that can connect with and serve customers in the way they wish to be interacted with.”
“Many of the big retailers we work with or are speaking to are going through big internal implementations and restructuring, including OMS systems, marketing optimization and empowering salespeople, which in 2020 will be key to them achieving the agility and customer service that is demanded.”
“Nonetheless, I believe the big shift will come with respect to the role of stores; they remain the big differentiating factor between traditional retailers and pure players, and the way these retailers utilize them will become central to their success. Rather than being simply a showcase and point of purchase for the brands/retailers’ products, we envision stores also becoming more experiential spaces and even fulfillment centers to create a full omnichannel experience.”
New immersive shopping experiences
Roy Moussa is Co-Founder of Qopius, a computer vision platform for shelf reality in real-time. Qopius is one of the startups that was chosen for Lafayette PNP’s second batch.
When asked about how retail will look like a year from now, Moussa goes back to 2017:
“There has been a revolution of retail since the end of 2017, driven by:
- E-commerce leaders evolving their business models to physical. Examples of this are Amazon's acquisition of Whole Foods and the launch of Amazon Go.
- Technological infrastructure transformation: the shift to cloud solutions which enable external software providers to use AI on the existing data.
This transformation, driven by e-commerce leaders and technological infrastructure readiness, has enabled retailers to use store-level data to improve customer experience.”
His predictions for retail in 2020 are four:
- Dynamic planogram based on local store needs
- Location-based services for consumers inside the physical store
- Dynamic pricing based on accurate demand forecasting
- Immersive shopping experience using image recognition by providing a store-like e-commerce experience
Sustainability is more than just good marketing
Paloma Mas is a Venture Analyst at Plug and Play, and this is her view on the future of retail:
“Consumers and companies alike are already aware of the need to take care of the planet. They are accepting new measures that they know will help build a better world. Measures such as avoiding plastics, re-gifting, regenerative and non-polluting materials, or new technologies that, thanks to automation, help businesses reduce the use of materials.”
“Retailers know that adopting circular economy principles and producing in a more sustainable way will help them engage with their existing customers and reach new audiences more concerned about the environment. They should be applying these new technologies that will soon become essential for every player in the industry.”
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