Forward thinking

What’s going to happen to retailing in the Twenties? Natalie Berg comes over all prophetic...

Natalie Berg is a Retail Analyst and Founder of NBK Retail

What’s in store for the retail sector in 2020? First, let’s be clear about what’s not changing. We’ll continue to see a bifurcation of winners and losers as the industry sheds itself of status quo retailers (translation: brace yourself for more doom and gloom). The ubiquitously connected ‘on-my-terms’ shopper is here to stay. We’ll see a continuation of the convergence of physical and digital retail. The race to stamp out friction and inefficiencies will only accelerate, and reinvention of the physical store will remain top of the boardroom agenda.

Now the fun stuff:

Peak Amazon

Government scrutiny, consumer backlash, competitors raising their game – Amazon will go from disruptor to disrupted within the next decade. And if you don’t believe me, just ask Jeff Bezos. “I predict one day Amazon will fail,” he said last year. “If you look at large companies, their lifespans tend to be 30-plus years, not a hundred-plus years.”

Amazon has spun an intricate web around its customers in the form of Prime, but ultimately Amazon’s USP is convenience. Customers are loyal to the service, the frictionless experience, the sheer effortlessness. It’s transactional, not emotional, loyalty that Amazon generates with its shoppers and that will ultimately be its downfall.

Digital detox

A critical component of the store of the future is hyper-connectivity, but let’s not discount the importance of disconnectivity in this digital age. Over the next decade, expect more retailers to invest in experiences that enable customers suffering from screen fatigue to unplug from their devices, to slow down and enjoy the moment. This is one of the reasons behind the recent resurgence of physical bookstores, a format that at one time was thought to be on the path to extinction.

As terms like ‘forest bathing’ enter the mainstream, how might this translate in a retail setting? Just as we have quiet coaches on trains, could we see digital detox zones in-store in the future? Mindfulness classes? More green spaces?

Era of participation

Over the past decade, we’ve witnessed physical retailers transition from transactional to experiential, primarily to distance themselves from the utilitarian nature of online shopping. Retailers will take this to the next level in 2020 as they look to cash in on the concept of community.

There’s an untapped opportunity for retailers to build a sense of belonging among shoppers in a way that in-store yoga classes and potato peeling workshops (yes, that’s a real thing) never could. But in order to find their tribe, retailers need to be bold about who they are and what they stand for. The days of being everything to everyone are over.

Experiential e-commerce

Just when you thought we could ditch the buzzword du jour, ‘experiential’ is now coming for e-commerce. For all its perks, online shopping is not the most joyful of activities because, let’s face it, killing friction inherently kills the experience. Discovery and curation are sacrificed for the promise of near-infinite assortment and next-day delivery.

Social media platforms, Instagram especially, are well positioned to bridge the gap as they become more commerce-minded. And forget chatbots; expect more retailers to embrace technology like the Hero app or even Whatsapp that connects online customers with real humans in-store, marrying the best of both physical and digital worlds.

Death of the salesperson

The challenge with the above scenario is that many legacy retailers are resistant to loosening their grip when it comes to corporate identity. The thought of an employee updating a customer on an order via an emoji-filled text is never going to sit easily with the corporate comms team. But customer experience is fast becoming the new currency in retail, so retailers need to radically rethink the rules of engagement.

This will require a titanic cultural shift, where store staff become trusted shopping companions, equipped with new skills and incentivised to provide stellar service. After all, brand evangelism starts with the employee. As I’ve stated on many occasions, the store of the future will be a place to eat, play, work, discover, learn and rent. So, if the role of the store is no longer purely about selling, isn’t it time we ditch the phrase ‘sales associate’?

Battle for in-home

In a bid to follow the customer in the most literal sense, more retailers will cosy up to shoppers in their own homes. Creepy now, but convenient in the future. The advent of 5G will make our homes smarter and more connected than ever before. Be prepared for the rise of in-home services, the culmination of several industry trends – customers demanding to shop on their terms, willingness to sacrifice privacy for convenience and democratisation of concierge-level service.

In the future, retailers won’t just deliver groceries to your fridge, but perhaps cook you a meal once there. The possibilities are endless – personal styling, health assessments, collecting online returns. Retailers will find new ways to transcend the transaction and capitalise on the trust they’ve already established with their shoppers. The concept of shopping will no longer be limited to stores or screens.

Fulfilment as a loyalty driver

The retail industry has been plagued by the delivery wars over the past decade, as everyone scrambles to keep up with Amazon. There’s no putting that genie back in the bottle and I believe one-hour delivery will go mainstream in urban areas as retailers learn to use their physical stores as mini fulfilment hubs.

That said, ever-faster delivery is unsustainable in both financial and environmental senses, and I believe there is an opportunity for retailers to incentivise shoppers to opt for slower, more economical fulfilment options. After all, how often do you need that little black dress delivered within the hour? Expect more collaboration here as retailers look to simultaneously address the Achilles heel of e-commerce – returns. Currently, retailers reward shoppers with loyalty points or money-off vouchers for spending more, but in the future expect loyalty to be rewarded for certain behaviours – speedy returns, in- store collection and slow delivery.

NBK Retail (nbkretail.com) specialises in retail strategy and future trends. Founder Natalie Berg has co-authored two books on retail, including 'Amazon: How the World’s Most Relentless Retailer will Continue to Revolutionise Commerce' (2019). She is a regular TV and radio commentator and writes for various newspapers and publications. This article first appeared at Forbes.com