5 trends for the future of retail
The retail industry is in the midst of another phase where technology rules and customer experience is fast becoming the new currency.
The ability of retailers to effectively leverage all of these technologies to meet changing customer expectations will be a key success factor in the new decade.
Analysts at Gartner have made a prediction about how technology will impact the future of retail in 2020 and beyond.
By 2025, two of the world’s ten largest retailers will create organizations to manage robot workers
Robotization will be of great importance for the future of the work environment. The ability of retailers to replace or reallocate their human workers into more profitable activities will be critical.
Over the past year, several major retailers, including Walmart, Target, Walgreens and Stop & Shop, have announced the use of intelligent robots to check inventory, clean the store, and deliver goods. By 2021, 77% of retailers plan to use AI to robotize warehouse space.
Retailers in the US and Europe will cut inventory costs by 30% by 2024
“Dead inventory” is costing US retailers $50 billion a year, analysts estimate. Reducing storage costs will be an effective way to increase productivity and generate free cash flow.
Retailers will use AI to better forecast demand, create specialized assortments, and create inventory in localized fulfillment centers to ensure inventory flexibility. At the same time, Internet of Things (IoT) technologies, including RFID, computer vision, smart shelves and electronic shelf tags (ESL), will improve product accessibility in stores.
By 2025, two of the ten largest global retailers will create flexible working conditions for store employees
Many large retailers already fulfill about half of online orders in their stores. Expanded responsibilities for picking, packing and shipping orders are putting additional pressure on already busy store workers.
At the same time, today’s rising generation of employees expect more from their jobs, including more flexibility and greater growth opportunities. As advances in technology open up new ways of working, retailers must keep pace in order to attract and retain talent.
Providing flexibility to work in retail outlets or within umbrella brands is one way to more effectively attract workers and increase earning opportunities.
By 2025, four of the world’s ten largest non-food retailers will have established a re-trade program as part of their global carbon reduction targets
According to Nielsen, 73% of consumers would change their behavior to reduce their impact on the planet. “Recommerce” or reverse trading is the sale of used goods, which is rapidly gaining popularity. The global market value of the second hand market reached $24 billion in 2018 and is projected to reach $51 billion by 2023.
Repurchase programs will attract new customers and increase brand loyalty.
By 2025, the top 10 retailers around the world will use AI to make recommendations, conduct transactions, and manage inventory for fast delivery to consumers
Marketers, retailers and manufacturers will be able to use more consumer data to make more accurate predictions. Thus, the offers will always correspond to the wishes of the customers.
Today, the “AI replenishment” includes about 650 million people who were born after 2010 and currently cover the age of 5 to 9 years. This generation has never lived without the influence of AI and is increasingly relying on technology to meet their needs, aspirations and desires. As these consumers start spending their own money over the next decade, instead of researching product specifications, ratings or prices, they will expect the best deals to be preselected for them.
Retailers who fail to successfully provide product recommendations will not only lose existing customers, but will also be unable to attract new customers due to a lack of relevance and ability to influence consumers.