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Watching the evolution of physical retail has been inspiring.
Retail centers are defying the skeptics and continuing to reconfigure themselves as consumer hubs for entertainment, education and fitness, alongside traditional shopping. Brands are remodeling stores to excite consumers. Online brands are recognizing the advantages of brick-and-mortar locations and continue to multiply their physical square footage (a nine-fold increase since 2012, according to one estimate).
As we enter the second quarter of 2018, I expect even bolder changes this year and beyond. Stores will, of course, continue to focus on creating a powerful and lasting shopping experience, and technology will be at the center of that. Here’s what’s in store for the remainder of the year, and a few years to come.
Mobility. We are already in the era in which cars and trucks can parallel park and perform a range of other automated tasks by themselves. Consumer centers have begun planning for autonomous vehicles and fewer parking spaces. It is now common to spot electric vehicle (EV) charging stations in parking lots – that’s just a start.
Retail is also getting embedded into the vehicles themselves. General Motors recently announced an online system called GM Marketplace that will let users make reservations and purchases from their vehicle dashboards. Imagine being able to book a table and place an order for a gift for your date, while you’re driving to pick them up. Or better yet, while your car drives for you.
Machines and Multisensory. There’s a strong chance that machine intelligence will help you make decisions on your next shopping trip. Around 45% of retailers are set to use some type of artificial intelligence (AI) technology between now and 2020. The innovations help retailers on the back end, analyzing data such as video feeds to figure out how many bags shoppers carry as a way to predict store performance.
I also expect new technologies to interact directly with consumers: At Minnesota’s Mall of America, an interactive app gives visitors step-by-step directions to stores using indoor positioning software. Then there’s the revolution in store design. Inside one of Warby Parker’s Miami locations, painted floors look like swimming pools, and pictures snapped from cameras give the effect of customers floating in the water. In the future, expect to feel, smell, see and hear new things as you shop.
Manpower. Big changes also are on the horizon for retail workers, who make up 10% of all workers nationwide. Retailers are rethinking how workers are prepared for customer-facing roles. Macy’s has invested in hiring stylists to help shoppers put together entire wardrobes, and Walmart is providing courses in advanced retail skills at its Walmart Academy sites. So, while digital interactivity is playing a bigger role in the shopper’s experience, customers still want that personal touch from a knowledgeable salesperson.
Multi-channel. The momentum around omnichannel shopping is not only answering consumer demands but is also a key driver of sales. Beauty chain Ulta says its omnichannel shoppers spend nearly three times as much as customers who only shop at the brand’s physical locations. In light of those statistics, retailers such as Target are making a big push to promote click-and-collect shopping. I’ll be watching to see how stores reconfigure physical spaces in other creative ways to meet these demands.
So far, 2018 is coinciding with what feels like an entire new era of retail and retail real estate, though brick-and-mortar remains a proven formula. Physical stores capture more than 90 percent of all retail sales. My bet is pretty soon we won’t be talking about omnichannel because it won’t matter where the product is purchased; it will only matter if consumers can get what they want, when they want it.