It has been recently reported that the Ministry of Finance has paid for over 50 social media "influencers" to post on Instagram to promote the Budget process. With half of our population 40 years and above, it is not surprising that this awareness strategy puzzled this majority. However, credit should be given to the Ministry for embracing social media for this campaign. This advancement of technology and media has also influenced and revolutionized the retail industry.
Technology has allowed consumers to have a stronger influence in the retail industry. While retail was predominantly focused on sales, whether it is offline or online and marketing was just adopting the usual mass media channels like advertisements. Today, the business of retail is all about omni-channeling, focusing on providing a positive experience rather than just a point of transaction; as well as expanding the marketing reach through adopting social media and online influencers.
So looking ahead, what will the future of retail encompass? CBRE Research has explored into this question and has collated eight key retail trends in the future.
1) Customization to Become the New Loyalty
As consumer tastes become more discerning with affluence, there will be a strong need to tailor the retail offerings to a specific want rather than to cater for a generic audience. Curating a bespoke package for the consumer will be a basic expectation in the future. In addition, through the aid of big data analytics, there is a need to react to consumers who both walk through and especially repeat customers.
2) Focus On Customer Emotions
Through data analytics, retailers will also have a better understanding of consumer emotions and preferences to influence their consumption. This is important as the desire for material consumption peaks. Competition for the consumer’s disposable income will intensify and it will not be surprising that consumers will be able to experience their purchase before any actual transaction.
3) The Power of Prediction
Similar to the models adopted by transport providers on surge pricing, machine learning algorithms will also be used to forecast demand and set prices for consumer products. Mundane or basic purchases like homeware supplies or basic food supplies will likely be automated by Internet of Things. The most successful retailers will be those that best analyze consumer data to stay ahead of the consumer’s wants as well as to efficiently manage store inventory.
4) Physical Point of Purchase Will Shrink
With e-commerce expected to continue its growth, transactional activities are likely to be conducted online, reducing the need for point of sales. Last mile delivery logistics is expected to ramp up to be able to fulfil swifter product delivery and a more precise tracking ability for the consumer. Storefronts will be virtual especially after hours.
5) Showrooms and Experiential Centres
Consumers increasingly favour experience over possession, and this marks the onset of omni channelling. The lines between a warehouse and retail outlet will be blurred as shopping centres compete to offer better stock. For retailers, the number of stores needed to gain market share has fallen. The role of retailers will need to evolve. Retail staff will expand their roles to be brand ambassadors and product experts. Wellness establishments are expected to grow.
6) Retail Is About What, Where and How You Want It
Technology is taking on a higher degree of sophistication and becoming more affordable. Wearable technology may one day make smartphones obsolete but mobile commerce is expected to rise rapidly. Technology is placing people as a focus, with a strong push to minimize the time taken to travel and transact. It is of utmost importance that product placement will be ubiquitous across all forms of media.
7) The Sharing Economy to be Commonplace
Especially with millennials, the sharing economy will feature more and more as the desire to access overpowers the need to own. Surplus provisions in the economy will be fully utilized with the aid of such applications. It is plausible that city centres in key cities will be pedestrianized in order to be car lite driven by strong political will. Driverless vehicles will be available in major cities. At the same time, it will not be surprising to see more pop up stores and temporary thematic stores arising in retail malls in the future.
8) Focus On Robotics and Automation
Last but not least, there will be a stronger push for the use of robots and automation in the retail industry. Automation will create a seamless store experience while robots will enhance efficiency and accuracy for better customer service. Robots and automation will also be used to circumvent increasing labour costs especially in Singapore.
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