Digitization is altering virtually every industries and the most rapid change is visible in retail businesses commerce where a large group of consumers exist. Brick stores are loosing the battle to online shopping, which offers the comfort of shopping from home, endless choices and options, deliveries and 1-click payments. Many retail players have embraced the opportunity to provide digital shopping experiences, companies like Zalando, Adidas and Tesla. I also came across an interesting article, in it; business leaders of the retail industry highlighted three major trends for the future of retail.
Let’s first have a closer look at some of trendsetters of future retail.
When Tesla started their business they wanted to make “buying a car” as simple to execute online as in stores. This was truly revolutionary in automotive business, but Tesla’s car technology was also different and thus they wanted to build a new kind of shopping experience to match that differentiation. Tesla chose Nurun as their digital marketplace and during the first year they received 1 million store visitors, over 15 000 model S reservations in-store and online, and +85% increase in total revenue.
Similarly, when Zalando started their business, they decided to only establish and sell through a digital marketplace. Many thought the business could not succeed with free returns and international shipping. By 2013, the company sold home accessories, sports gear, shoes and fashion for men, women and kids. The products were from more than 1,500 international brands, ranging from popular high-street brands to designer labels and even a collection of its own branded products. Zalando now operates in 15 main markets in Europe and is the cross-platform online store for Europeans.
Adidas has always been brave to experiment unconventional ideas and innovation. Symbio partnered with Adidas and TBWA\Helsinki in 2013 to produce the Adidas WiSh, an interactive window-shopping that engaged the consumers in totally new way. The solution not only broke record sales in the Adidas Neo store in Nürenberg, Germany, but media, bloggers and consumers globally were inspired by it. The Adidas WiSh solution also won a variety of globally recognized awards, including 5 Innovation Lions in Cannes, Grand One and listing in the Gunn Report.
Shopping – What’s Next?
Digitization and economics are changing the retail landscape. There are three trends – experiential retail, sustainability and retail polarization – which retailers should follow closely to stay competitive moving forward.
Retailers and ecommerce researchers believe the brick-stores can stay alive by focusing on selling experiences and lifestyle over products. The Digi-native shoppers will cherish online shopping and brick & mortar stores will have completely different experiences. Future stores functions will be to entertain and provide a consumer experience that cannot be gained online. By merging different technologies, stores can create amazing experiences. Customer can pick up a shirt, walk into a digital change room, stand in front of the mirror, the mirror recognizes the RFID chip embedded in the shirt, and then the mirror starts giving the customer contextual information about the shirt.
Consumers will also become more conscious about environmental and social issues. This will leverage the importance of sustainability, which brands need to truly embed as part of their business.
Lastly, the gap between the rich and the poor will continue growing and will become and industry changer. This sharp contrast between wealth and poverty will be the demise of the middle market, causing growth both in the luxury and lower market value areas.