The future of brick and mortar retail: 5 trends shaping the industry
Disruption is a word that springs to mind when we think about how the retail industry has changed over the past couple of decades. The in mid to late 90s, customers were first introduced to the 24-hour global marketplace that is online retail stores. By the early to mid 2000s, a number of brick and mortar retail verticals started to feel the pinch of reduced foot traffic, forcing many businesses to expand into the online space. Those that didn’t move with the times risked losing market share.
Traditional marketing was also turned on its head in the early to mid 2000s with the introduction of social media; an entirely new, visual communications platform that provided direct access to targeted demographics. Again, retailers that didn’t embrace social risked being left behind.
According to a recent industry report conducted by the Westfield Corporation, there are a number of trends that are set to further disrupt how retailers do business in the near future. Titled: How We Shop Now: What’s Next? the report draws on over 13,000 interviews conducted across the UK and USA. Based on the findings, Westfield identified five key trends that it believes will shape the future of retail for brick and mortar retailers.
1.Pay as you go retail
As documented by Rachel Botsman in her ground breaking 2010 book, What’s Mine is Yours, the notion of collaborative consumption (the idea of sharing or renting goods within peer communities. I.e. Airbnb and GoGet) has now well and truly made its way into the mainstream. According to the report, one in five UK respondents are interested in renting items from their favourite retail stores; a trend that is particularly strong among millennials with 46 percent of 25-34 year olds interested in renting over full ownership of particular consumer goods. Exercise equipment topped the list at 19 percent followed by cars (16 percent), consumer electronics (15 percent), bikes (14 percent) and clothing (10 percent).
Customers are seeking out new experiences in retail spaces where they can not only purchase items, but also learn new skills and build social networks. Apple’s Genius Bar, Lorna Jane’s Active Living Room and Harvey Norman’s Gourmet Institute are great examples of this. According to the research, health and fitness sessions are most popular at 27 percent, creative cookery (25 percent), expert sessions (20 percent) and clubs (19 percent).
As opposed to traditional cash rewards, the research found that there is a growing demand for loyalty schemes from retailers that reward positive lifestyle choices. This can include anything from recycling to exercising and charity volunteering, with a fifth of UK respondents stating that some form of lifestyle loyalty would appeal.
According to the report, the retail industry is likely to see virtual reality become widely adopted over the coming years with shoppers becoming increasingly more interested in employing virtual reality technology to help visualise how products will appear in their everyday lives.
41 percent of respondents in the UK stated they would like to use new technologies such as virtual reality headsets to gain a better idea of how products will look like in their home. 33 percent said that they would be interested in virtual assistance to see how clothes would look on them.
The report suggests that our sedentary lifestyles have resulted in a demand for sensory experiences within the retail space. The research found that all five senses were deemed to enhance the shopping experience with vision and touch coming out on top. According to the report, 73 percent of UK shoppers sighted touch, feel and trial of the product as the key benefit of shopping in brick and mortar store. Taste was also an important factor coming in at 28 percent.
To read the full study, click here.