Climate change spurs a DIY anti-consumer culture: The Future of Retail P3

Between waves of crushing climate-induced recessions and a DIY culture entering the mainstream, the retail industry will fight and claw just to stay relevant between the decades of 2030 to 2060. As for shopping, the trends of the 2020s will intensify, with more and more of it entering the home.

Sounds intense, right? In case you were wondering why this final part of the retail series is covering so much ground time-wise, it’s because the topics of climate change, food production, and 3D printing are huge. Each will have their own future series written for them shortly. Instead of going deep into each topic, we’ll skim over them, highlighting those aspects that relate to retail. So let’s start with something light, like grocery shopping.

SUPERMARKETS AND YOUR FRIDGE BECOME SUPER SMART FRIENDS

The year is 2033 and it’s been a long day at work. You’re listening to some classic blues-rock by The Black Keys, reclining in your driver’s seat, and catching up on your personal emails while your car speeds down the highway driving you home for dinner.

You get a text. It’s from your fridge. It’s reminding you for the third time that you’re running low on all your foodstuffs. Money is tight and you don’t want to pay the grocery service to deliver the replacement food to your home, but you also know that your wife will kill you if you forget to buy the groceries for a third day in a row. So you download your fridge’s grocery list and voice commands your car to make a detour to the nearest grocery store.

The car pulls into a free parking space near the supermarket entrance and gradually turns up the music to wake you from your nap. After lurching forward and tuning down the music, you step out of your car and head inside.

Everything is bright and inviting. The produce, baked goods, and food substitute aisles are massive, whereas the meat and seafood sections are tiny and expensive. More than that, the supermarket also looks larger, not because they are space-wise, but because there’s barely anyone here. Aside from a few other shoppers, the only other people in the store are food pickers collecting food orders for home deliveries.

You remember your list. The last thing you want is another stern text from your fridge—somehow they seem worse than the texts you get from your wife. You walk around picking up all the items from your list, before pushing your cart through the checkout path and back to your car. As you load up the trunk, you get a notification on your phone. It’s the digital bit coin receipt of all the food you walked out with.

Deep inside you’re happy: you know your fridge will stop bugging you, at least for the next few days.

The scenario above seems wonderfully seamless, doesn’t it? It’ll work sort of like this.

By the mid-2030s, RFID tags (tiny, trackable, ID stickers or pellets) will be embedded into everything, especially food items at supermarkets. As this technology becomes more widespread, shoppers will simply collect groceries into their cart and exit the supermarket without ever interacting with a cashier. The store would have scanned all the items the shopper selected prior to leaving the premises and charged her via her preferred payment app on her phone. This will save shoppers a great deal of time and lead to a reduction in food prices overall, due largely to the supermarket not needing to mark up their produce to pay for cashiers and security.

Older individuals, luddites who are too paranoid to carry advanced cellphones that share their buying history or those who can’t afford smartphones may still pay using a traditional cashier. But those transactions will gradually be discouraged through higher pricing of food paid for through traditional means. While the example above is dealing with grocery shopping, note that with enough time, this form of streamlined in-store purchasing will be integrated into retail stores of all kinds.

That said, while our example depicted a shopper buying food in person, this method of shopping may also go extinct. One half of grocery chains, catering to the young and web-obsessed, will simply opt out of having physical grocery stores altogether, instead delivering food from its warehouse directly to the buyer after they select their food purchases through an online menu. The other half will continue to offer the traditional in-store grocery shopping experience, but will also supplement its revenue by acting as the local food warehouse and shipment center for a variety of smaller food delivery e-businesses.

Meanwhile, smart, web-enabled refrigerators will speed up that process by monitoring both the food you normally purchase (via RFID tags) and your consumption rate to create an auto-generated food shopping list. When you’re close to running out of food, your fridge will message you on your phone, ask you whether you want to restock the fridge with the premade shopping list (including individualized health recommendations of course), then—with a one click buy button—send the order to your registered e-grocery chain, prompting a same-day night delivery of your shopping list. Again, keep in mind that this automated buying system won’t be limited to groceries, but to all household items once smart homes become commonplace.

RETAILERS FACE CRUNCH FROM GLOBAL ECONOMIC MALAISE

Just like how your body heats up during a bad case of the flu, so too will our climate as it finally succumbs to the massive amounts of pollution we’ve been pumping into its system since the Industrial Revolution. Between the late 2030s and well into the 2040s, humanity will begin to experience a severe shift in the global climate, the likes of which we have never experienced during our modern era. (Read our Future of Climate Change series.)

It will begin gradually. Places that are dry will get dryer. Places that are wet will experience more flooding and weather events (read hurricanes and tsunamis). Each year the climate will get more severe, with a few years punctuated by devastating weather events that will temporarily remind the world that nature knows how to fight back.

Food prices will rise as more and more farmland becomes too arid and fresh water sources dry out. As food becomes scarce, massive waves of migrants will flood northward into the US and Europe. Coastal cities (especially in Asia) built at or below the 2010-era sea level will see their populations shift inland to avoid the increasingly devastating seasonal floods—also impacting the cheap exports produced in that region.

All these trends and more will create myriad issues that will overwhelm world governments and pinch the spending power of the average shopper around the world. Obviously, this time period will pose some challenges for the profitability of most retailers.

In light of this, the time period between 2030 and 2060 will be one of sustainable reinvention and creative destruction. We will see a consolidation of retailers into ever larger conglomerates. We will see innovative methods of smart downsizing. And retailers will realize massive cost-saving opportunities through a logistics revolution.

RETAIL FOOTPRINT SHRINKS, SHOWROOMS AND ECOMMERCE GROW

As the world economy struggles to deal with the indirect challenges climate change will impose on it, most retailers will begin the process of contracting their retail footprint worldwide, opting for smaller boutique stores instead of large retail outlets. These smaller storefronts won’t carry much inventory. Instead, their purpose will be to provide visitors with a unique brand experience (as outlined in part two of this retail series), one that will generate social sharing and build customer loyalty that will lead to online sales.

Luckily, it will be during the mid-2030s that the Third Industrial Revolution—first popularized by Jeremy Rifkin—will start having a major impact on business as usual. This is a whole future series unto itself, but as it relates to retail, the oncoming convergence of the Internet of Things, a decentralized and renewable energy system, and an automated logistics and transportation system will represent unheard of cost savings. This revolution will also substantially cut the demand for gas in most industrialized countries, causing oil prices to fall, further reducing costs through the production line.

This revolution will allow retailers to substantially reduce their price tags, while maintaining profitable margins, and in so doing, spur newfound demand from an overly thrifty public. On the flip side, luxury retailers will remain unaffected by the slump and some will even grow their storefronts by taking advantage of the flood of newly vacant storefront inventory, locking in long-term rental deals at rock bottom prices.

3D PRINTING PUNCHES RETAIL IN THE FACE

While future climate change induced recessions will force retailers to tighten their belts and become more efficient with how they operate, the same can be said for the average shopper. This time period will see prices for basic goods swinging sharply and well-paying jobs becoming ever harder to come by. During challenging periods like this, people get creative about saving money and are more receptive to tools that will help them meet that goal. Luckily, this will be the opportunity for a revolutionary technology to go mainstream: 3D printing.

Yes, I know, there’s already a lot of hype around 3D printing, but it will still take a while before they are developed and simple enough for the mainstream. But by the 2030s, the technology will have matured considerably and its prime advantage—saving the average person money by letting them print anything they want at home—will never be more attractive.

These tools will fully enter the mainstream by the early 2030s. They will become a standard appliance found in most every home. Their size and the variety of things they can print will vary based on the living space and income of the owner. For example, these printers (whether they are all-in-one or specialist models) will be able to use plastics, metals, and fabrics to print small household products, replacement parts, simple tools, decorative items, simple clothing, and much more. Heck, some printers will even be able to print food!

But for the retail industry, 3D printers will represent the largest disruptive force it has ever faced, effecting both its in-store and online sales.

Obviously, this will become an intellectual property war. People will want to print stuff they see on shelves or racks for free and companies will want to make them pay for it. Ultimately, the results will be mixed (see the music industry). Again, 3D printers will have their own future series, but their effects on the retail industry will largely be as follows:

Retailers who specialize in goods that can easily be 3D printed will fully close their remaining traditional storefronts and replace them with smaller, overly branded, shopper-experience focused product/service showrooms. They will conserve their resources to enforcing their IP rights (similar to the music industry) and will ultimately become pure product design and branding companies, selling and licensing to individuals and local 3D printing centers the right to print their products. In a way, this trend toward becoming product design and branding companies is already the case for most big retail brands, but during this decade, they will cede almost all control over the production and distribution of their end product.

For luxury retailers, 3D printing won’t impact their bottom line any more than product knockoffs from China do today. It’s another issue that they will fight through IP lawyers, but ultimately, people will pay for the real thing and knockoffs will always be spotted for what they are. By this point, luxury retailers will be among the last places where traditional shopping (trying out and buying products from the store) will be practiced.

In between these two extremes are those retailers who produce moderately priced goods/services that cannot be easily 3D printed—these may include shoes, wood products, intricate fabric clothing, electronics, etc. For these retailers, they will practice a multi-pronged strategy of maintaining a large network of branded showrooms, IP protection and licensing of their simpler product lines, and increased R&D to produce sought after products that cannot be easily printed at home.

So there you have it, a peek into the future of shopping and retail. We can go further by talking about the future of shopping for digital goods when we all start spending most of our lives in a Matrix-like cyber reality, but we’ll leave that for another time.

Through this series, you’ve seen how the online and off-line worlds will merge to make shopping seamless; how big retailers will use big data to study your buying habits and help you make better buying decisions; how the vast majority of your purchases will happen online; how the experience of shopping at a store or strolling through a mall will become more experiential and entertaining; how the coming climate change recessions will force retailers and shoppers to innovate to save costs; and ultimately how the mainstream introduction of 3D printers will take DIY culture to the mainstream.

But let’s not forget that at the end of the day, we buy food when we’re hungry. We buy basic products and furnishings to feel comfortable in our homes. We buy clothes to keep warm and express our feelings, values, and personalities outwardly. We shop as a form of entertainment and discovery. As much as all these trends will change the ways retailers allow us to shop, the whys won’t change all that much.

RETAIL SERIES:

Future of buying things you don’t need – Future of retail P1

Why eCommerce won’t kill hanging out at the mall – Future of retail P2