The Future of Retail – How Technology Will Change the Way We Shop
Throughout history changes in technology have changed the way consumers interact with and buy products. New advancements bring easier access to products and easier advertising from brands. Early on, advancements that were not specific to the retail sector perhaps had the largest effect on the industry.
There have been many innovations throughout the years that we overlook or take for granted. The first mall opened in Lake Forest, Illinois in 1918. In 1952, barcodes were invented, allowing for better organization and faster checkout. 1978 marked the debut of the first point-of-sale system. These are excellent examples of game-changing technology that changed the face of retail forever. In the last three decades, that slow crawl of advancement has become a dead sprint that is still picking up speed.
Whether consumers realize it or not, we are seeing an extremely fast evolution in the market even today. Starting with the rise of the internet, the entire landscape of retail markets looks completely different to how it did just a few years previous.
Let’s take a look at the principles and trends that will shape the future of technology and the retail industry as a whole.
Customers are More Informed than Ever
Without a doubt, customers have access to more information than ever before. While some might see this as a boon to competition, companies that create great products can only benefit from this fact. In seconds customers can check the price of the item in stores around the world, read reviews from other customers that have purchased the item, and learn about the company that they are purchasing from.
Ad platforms like Google Shopping, even do the majority of work for the consumer by aggregating similar products from multiple retailers and surfacing them in a simple interface for consumers to choose from.
81% of shoppers research online before making a purchase. Those customers are becoming increasingly wary of the marketing that they interact with. According to Nielsen, confidence is declining rapidly in television ads (down 24%), magazines (down 20%), and newspapers (down 25%). Increasingly, consumers are relying on a variety of sources and their own research and intuition to decide what to buy.
On the whole, this leads to better, more effective research and higher expectations among your average consumer. To meet these increased consumer demands, retailers have been forced to adopt new technologies to fill in the gaps. In addition, retailers need to be increasingly aware of what their competition is doing so as not to be caught off guard by promotions or discounts that may affect sales.
Consumer Expectations and Instant Retail Gratification
Consumer expectations in retail are changing rapidly. The Internet has given rise to a culture of instant gratification. Information and entertainment are available to anyone within seconds. In the U.S., 21% of consumers are interacting with the internet “almost constantly.” According to ChartBeat, 55% of page views last 15-seconds or less.
As eCommerce deliveries become faster, using programs like Amazon’s free same-day delivery program, consumer expectations shift. With the FAA slowly crawling toward regulations to allow drone deliveries, delivery times could shrink to a few short hours in the coming decade. Companies will be forced to open more distribution centers and infrastructure to meet these demands. As such, being able to accurately manage inventory turnover rates becomes even more important.
It’s important that eCommerce companies are able to recognize these trends and shape their services around them. Customers have come to expect a faster, more responsive service from companies. These expectations don’t change online either, where retailers are located around the world.
Automated Purchasing
Another huge shift in retail and eCommerce has come from automated purchases. In the future, consumers will likely have certain items automatically shipped to their house on a monthly or weekly basis. This removes the need to go to the local grocery store (or order online) to secure their essentials. Anything that is an essential home product has the potential for automated replenishment.
The Amazon Dash button is one recent example of automated purchasing. Solutions like this may well be the future of eCommerce and online shopping. Every button is assigned to a specific product. When the customer is running low, a simple press of the button automatically orders the product for delivery. The customer doesn’t even have to give the purchase a second thought.
Moving forward, the smart bet is on automated purchasing becoming a much larger part of retail shopping. This is particularly true for items that need to be regularly replenished within the home. Soon we may see smart appliances that detect shortages. Imagine a refrigerator that detects when you are low on milk, and automatically adds it to your next delivery.
Another form of automated purchasing of essentials that we have seen recently comes in the form of subscription services, which have become increasingly popular over the last five years.
Subscription Shopping
In many categories, monthly subscriptions are disrupting industries. In some cases, subscription services have the potential for completely supplanting traditional retail. The subscription model is ideal for retailers because it locks customers into purchasing a particular product from them. The model gained popularity online, with companies like Dollar Shave Club offering an essential product for a low monthly price. Gillette quickly followed suit with their own similar service, giving credence to a change in industry norms.
Following these examples, we’ve seen subscription services rise in popularity in other categories. Categories like makeup and beauty (BirchBox), food (Blue Apron), and clothes (Trunk Club) have all seen subscription products pop up.
Retailers and eCommerce companies should prepare for a future where monthly subscriptions for essential items become the norm. We could soon see many other categories disrupted by subscription services. Consumers favor options that take the work out of shopping for items that they will need to purchase.
A New Retail Frontier
Retail companies have always had to adapt to changing technologies to stay with the times. However, we have never seen the rapid innovations that we have in the last three decades. The speed of these changes will accelerate, leaving inflexible companies scrambling to adapt. Customers have more access to information than ever before. They are increasingly looking for ways to automate their shopping. With shoppers favoring instant gratification, it is important for eCommerce companies to adapt to stand out from their competition.