Retail is going postmodern. No, you won't be seeing installation art at Walmart any time soon. In fact, you won't be seeing Walmart itself for long -- at least not as a generic supercenter-type mega-box. A tech-driven, global and intensely competitive retail world is spinning toward a more focused, smaller, tech-savvy universe.
It's a place where, in less than a decade, retailers (who survive) will be all over digital retail and mobile technology, and store footprints will shift from gigantic outlets that sell everything to smaller stores focused on specific consumers and their needs. The retail world may, in other words, look more and more like a high-tech version of a street market in Casablanca.
A new report from PwC US and Kantar Retail, "Retailing 2020," which uses data and analyses from PwC’s retail and consumer practice and Kantar Retail, says stores need to be smaller and better equipped to deal with non-store growth. They also need to deal with the facts of income disparity, and an environment in which classes will define retail channel dynamics.
“Retailers will need to prepare for a wall-less omnichannel retail world, one where shoppers will come to expect a seamless brand experience online, in-store and across multimedia touchpoints,” said Susan McPartlin, PwC’s US retail and consumer industry leader, in the report. “This multi-format portfolio combined with the proliferation of small, urban ... retail formats will pave the way for future growth.”
PwC sees all of this happening by 2020, when the Supercenter will be replaced by online, mobile and tablet commerce. The study predicts that large-chain retail growth through the decade will be close to the early 2010s recessionary rate, with one-third of large chain growth projected to come from online sales. Discounter channels will capture larger growth, while food, drug and mass-channel retailers are expected to face a tougher growth environment through 2020, per the study.
The study also predicts that there will be two major "shopping nations" by 2020: older, conservative consumers over 50, who have lived through recessions, and younger generations under 30.
“The demographic and income gaps between shopper segments are expected to widen, creating more shopper segments with different expectations for product offerings and shopping experiences,” said Bryan Gildenberg, Kantar Retail’s chief knowledge officer, in the report. “Retailers must do away with the ‘one size fits all’ approach and consider the ever-diverging needs of both the ‘have’ and ‘have not’ consumers to remain viable in the future. Forward-thinking retailers should diversify format portfolios, test smaller footprints and offer niche products targeted to specific shopper segments.”
In technology innovation, the report says retailers will use "big data" for consumer research, and such tracking technologies like Radio Frequency Identification (RFID) for seamless checkout. PwC and Kantar say retailers will need to build "omnichannel" tools so consumers can get to their digital stores from any online channel at any time day or night.
Interesting thoughts on retail. I work for McGladrey and there’s a white paper on the website about this very topic, readers will find it interesting. http://bit.ly/JDHmUU It describes several issues impacting retail sales, closures and acquisitions.