Why e-commerce won’t kill hanging out at the mall: Future of Retail P2
Why e-commerce won’t kill hanging out at the mall: Future of Retail P2
Smart malls. Monster fitting rooms. And luxury brands still not giving a fuck. In part one of the future of retail series, you saw the beginnings of a new, more integrated system of shopping. Here we’re going to expand on that trend, as well as introduce new micro-trends not previously covered.
RETAIL BEGINS TO SERVE E-COMMERCE. MAYBE.
People will soon stop shopping for basics in person and will instead only physically buy “wants.” Between 2020 and 2030, retailers will succeed in conditioning the bulk of its shoppers to make the majority of their everyday purchases online.
You see this now with in-store cashiers occasionally giving you online coupons stapled to the front of your receipt or giving you a 10% discount if you sign up for their e-newsletter. Soon, retailers’ previous headache of showrooming will be inverted when they mature their e-commerce platforms and actively encourage shoppers to buy their products online while in the store (explained in part one of this series).
By the mid-2020s, high profile retailers will begin promoting the first online-only Black Friday and post-Christmas sales events. While the initial sales results will be mixed, the massive influx of new customer account information and buying data will prove to be a gold mine for long-term targeted marketing and sales. When this tipping point occurs, brick and mortar stores will make their final transformation from being the retailer’s financial backbone to its main branding tool.
Essentially, all of the biggest retailers will become full e-commerce businesses first (revenue-wise), but will keep a portion of their storefronts open primarily for marketing purposes. But the question remains, why not get rid of stores altogether?
Being an online-only retailer means:
• A reduction in fixed costs—less brick and mortar locations means paying less rent, payroll, insurance, seasonal store redesigns, etc.;
• An increase in the number of products it can sell online, opposed to the limits of in-store square footage;
• An unlimited customer pool;
• A massive collection of customer data that can be used to more effectively market and sell consumers more products;
• And use of the future’s fully automated warehouse and parcel delivery infrastructure may even become cheaper logistically.
These points are all well and good, but at the end of the day, we’re not robots. Shopping is still a legitimate pastime. It’s a social activity. More importantly, depending on the size and cost of the product, people generally prefer to see and interact with what they are going to buy before they actually buy it. That’s why previously online-only businesses, like War by Parker and Amazon, have opened their own brick and mortar stores, and are finding success with them. Brick and mortar stores give brands a human element, a way to touch and feel a brand in a way that no website can offer. Also, depending on where you live and how unpredictable your work hours are, these physical locations may be convenient centers to pick up the products you bought online.
Because of this trend, your experience in a late 2020s retail store will be far different than it is today. Instead of focusing on selling you a product, retailers will focus on selling you a brand and on the social experience you have in the store.
Store decors will be better designed and more expensive. Products will be more elaborately showcased. Samples and other free swag will be more generously handed out. In-store activities and group lessons indirectly promoting the store brand, its culture, and the nature of its products will be commonplace. And as for the customer experience representatives (store reps), they will be judged equally on the sales they generate, as well as the number of positive in-store social media and messaging app mentions they generate.
RETAIL LEARNS A THING OR TWO FROM THE SHARING ECONOMY
Another trend that will mature during the 2020s will be the peer-to-peer (think farmers markets and craigslist) and sharing (think AirBnB and Uber) economies and how retail will adapt to them. The next decade will see a range of future service providers/mediums emerge to allow individuals to share or buy from other individuals.
Ultimately, the future will breakdown enough barriers to allow people to buy anything from anywhere, from anyone, at anytime, often with same day delivery. For this reason, people will increasingly care about the stories behind what they buy, and more important, building relationships with those behind the products and services they purchase. This trend has already gained a great deal of traction during the 2010s, but will become fully mainstream in the next decade.
To compete, large retailers will need to find innovative ways to engage shoppers on a long term basis to build a community that emulates friendship. Out of this need, free or nominally priced classes, seminars, living showrooms, clubs or community groups, branded events and more will become mainstream.
On a similar token, the sharing economy will condition more and more people to prefer the ease of renting over owning. This is a larger societal trend that will be discussed in a separate article, but in the context of retail, it will spur the creation of more start-ups focused on helping individuals rent various types of products from other businesses or individuals. Retailers will begrudgingly follow with experiments in renting out their products (perhaps past season or overstock products) as an additional sales option to traditional transfer of ownership-type sales.
FITTING ROOMS TAKE CENTER STAGE
Oddly enough, by the mid-2020s, we’ll see the rise of fitting rooms that don’t suck.
Fitting rooms will increasingly become a focal point of store design and resources. They will grow ever larger and more luxurious and have far more technology packed into them. This reflects the growing appreciation that a great deal of the shopper buying decision happens in the fitting room. It’s where the soft sell happens, so why not rethink it the retailer’s favour?
First, select retail stores will optimize their fitting rooms with the goal of getting every shopper who walks into their store to enter a fitting room. This may involve adding browse able shopping screens where customers can select the clothes and sizes they want to try on.A staffer will then pick out the selected clothes and then text the shopper when their fitting room is ready with their selected clothes neatly laid out for them to try on.
Other retailers will focus on the social aspect of shopping. Women especially tend to shop in groups, select multiple clothing pieces to try on, and (depending on the value of the clothing) can spend up to two hours in the fitting room. That is a lot of time spent in a store, so brands are going to make damn sure it’s spent promoting the brand in a positive light—think plush couches, luxury wallpaper backgrounds for instagraming outfits, and possible refreshments. Other fitting rooms might also be equipped with wall mounted tablets displaying store inventory, allowing shoppers to browse more clothing, and with a tap on the screen, notify store reps to bring them more clothes to try on without leaving the fitting room.
THE SHOPPING MALL ISN’T GOING AWAY ANYTIME SOON
The shopping mall is not going away, no matter how large e-commerce becomes. That shouldn’t come as a surprise. In many places, the mall is the central community hub, and, in many ways, they are privatized community centres.
But as retailers begin to shift from gearing their storefronts from selling merchandise to selling brand experiences, the most forward thinking malls will support that shift by offering macro-experiences that support the brand experiences being created in the individual stores and restaurants that occupy it. These macro-experiences include examples such as amping up the decorations during the holidays, secretly allowing or paying for “spontaneous” social media-shareable group happenings, and setting aside public space for community events on its premises—think farmers markets, arts exhibitions, doggy yoga, etc.
Malls will also use the app mentioned in part one of this series that would let individual stores recognize your buying history and habits. However, malls will use it to know how frequently you visit and which stores or restaurants you visit the most. The second you walk into a future “smart mall,” you’ll be notified on your phone about the newest store openings, mall events, and specific sales that might interest you.
On a superficial level, by the 2030s, select malls will have their walls and floors laced with digital displays that will run interactive advertisements (or store directions) and will follow (or guide) you wherever you walk through the mall. So starts the age of track able, online ad remarketing entering the off-line world.
“FUCK E-COMMERCE,” SAY LUXURY BRANDS
As much as the trends noted above may spell a greater integration between the in-store and e-commerce shopping experience, some retailers will opt to go against the grain. Specifically, high end stores—those places where the price tag of an average shopping session is at least $10,000—the shopping experience they promote won’t change much at all.
Luxury brands and storefronts aren’t making their billions on quantity like the H&M’s or Zara’s of the world.They make their money based on the quality of the emotions and lifestyles they impart upon the high net-worth shoppers who buy their luxury products.
Sure, they’ll use high-end tech to track the buying habits of their customers and greet shoppers with personalized service (as outlined in part one of this series), but dropping $50,000 on a handbag isn’t a decision you make online, it’s a decision luxury stores can best create in person. For that reason, e-commerce will never be a priority for the top, most exclusive brands. Remember, the rich don’t buy much online and the super-rich have designers and retailers come to them.
The third and final part of this series into the future of shopping and retail will focus on consumer culture between the years 2030 and 2060. Don’t worry, this will be a short piece detailing how retail will respond to the effects of extreme climate change induced recessions, the rise of smart supermarkets, a boom in virtual goods, and the impact of pervasive 3-D printing in the home.
Next scheduled update for this forecast
The following popular and institutional links were referenced for this forecast:
The following Quantumrun links were referenced for this forecast: