The future of retail: 5 trends

Rebecca Hughes

Shopping on the high street is a strangely aging ordeal nowadays. It makes me long for the brands and retailers that nurtured my consumerism and gave me endless days out as a teenager. Yet with the continuous evolution brought on by the pandemic, turbulent international trading conditions and inflationary pressures, the high street no longer looks like it once did, and the precise future of retail remains uncertain.

That said, consumer-connected, future-focused retailers can seize the business transformation opportunities created by this social and economic change. If you want to win in the retail space, you need to factor the following five trends into your business strategies.

Location, location, location?

Where stores placed in areas with high footfall once guaranteed success, this is no longer the case. High streets, shopping malls, and even city centres are full of vacant retail spaces. Brightpearl (part of Sage) reported in 2021 that 18% of retailers were considering moving to out-of-town locations, yet 63% of consumers were planning to shop more locally.  Consumer behaviour is continuously evolving, and your location strategy needs to adapt.

Marks & Spencer sets the example after publicly announcing a plan to reduce its overall store number while opening new sites where data shows trade will be more successful. Building on a similar theme, we worked with another large retailer whose high street presence had waned. They wanted to know where future stores should be located.

Insight revealed their typical customer to be someone who would visit stores several times a week, as much to talk to the staff as to make a purchase. Yet their behaviour had changed in recent years, and those who still visited stores seemed older. This left us with the question, how could the retailer create a relevant high street offering that targeted younger customers with the potential for long-term brand loyalty?

Larger stores on retail parks presented a markedly different offering, which the retailer believed to be more future focused. We identified the locations used by both current and target customers – and why these locations were preferred – which helped shape the retailer’s location strategy to better align with customer drivers. Overall, the advice is to keep on the pulse of customer needs when it comes to strategy and be prepared to make major changes as habits evolve.

Genuine environmental responsibility

Sustainability remains in focus for the future retailer – that’s a given – and sustainable digital transformation was recently named the number one technology trend shaping retail in 2023.

Let’s look at the retailers already taking steps of what could be achieved. Zara recently introduced a pre-owned platform, which offers repairs and accepts donations – yet for an initiative like this to become an authentic part of the brand, it also needs a physical presence in stores where engaged and enthusiastic staff can take ownership of its day-to-day running.

Similarly, John Lewis now offers a clothing rental service, which extends its range to include higher end designers and offers a more sustainable way for customers to update their wardrobes.

Yes, retailers are taking steps in the right direction, but to truly promote environmental responsibility in ways that bring maximum benefit, these schemes need to be integrated into every part of their brand offering.

It helps to know which audiences value sustainability initiatives and how to navigate those that don’t, and this becomes easier with audience insight. Yonder Clockface can deliver this deeper understanding, which allows brands to both innovate and win in all arenas, including the environmental one. 

Truly embracing omnichannel

A seamless omnichannel strategy is essential for the retailer of the future. As covered in our recent article on digital journeys, not all customers can, or want, to engage with your brand purely on a digital basis. Neither can their every need be met online alone, despite ‘digital’ being woven into every aspect of every day. Harvard Business Review has long been telling us the majority (73%) of consumers are shopping across channels, so the most successful businesses must offer a combination of online and instore shopping across multiple channels.

Online options need to integrate with platforms consumers already spend time on, which allows them to browse products across different channels without interrupting their journey. Restoration Hardware (RH) offers a great example of a future-focused omnichannel experience. The luxury homeware brand has created large, opulent galleries in select locations across the US – never more than one per city – that draw customers from afar. RH immerses them in an elegant, aspirational environment where they enjoy fine dining and an effortless purchase journey.

Customers cannot physically purchase goods from the gallery or leave with them. Instead, transactions are handled instore via digital platforms and the goods are delivered to the customer’s doorstep. It’s a truly unique and seamless experience.  

Offering social, immersive spaces in store

If retailers are keeping a physical store space, that space needs to be one that not only integrates with their online offering but also provides something truly unique from it.  It should exploit all the USPs that a retail space has over the online world, including being spaces for socialising, interacting with products and being physically immersed in the world of the brand. McKinsey note that for Gen Z the instore experience is particularly important, as they seamlessly combine it with online and social media retail interactions.

Existing instore ‘experiences’ offer something unique that’s separate from the online shopping experience, but these often take the form of installations that encourage customers to take selfies and share them on social media. The future customer, however, will expect greater innovation. If a retailer wants customers to embrace the instore experience, they need to offer much more than a chance for a selfie.

This is an opportunity for customers to retreat from the noise of the online world. Free WiFi aside, retailers can create a grounded space that positions their brand right at the heart of a real-life social experience – which also encourages tangible brand engagement. What’s more, providing places to sit, eat and drink keeps customers in store for longer, so they ultimately spend more money with you. Exploring competitors’ innovations, plus segmenting and deeply understanding the customer of the future is the key to developing these in store experiences.

Flawless delivery & Click and Collect

In the face of an omnichannel future, it’s imperative that retailers pay as much attention to the quality of customer service offered by delivery partners as they do to the service provided by retail staff. This becomes all the more important when we consider how our research for Ofcom revealed that delivery companies are letting retailers down.

Half of respondents said they’d experienced issues with parcel deliveries in the last three months – with the most reported issues being delays and damage to goods caused by rushed deliveries. So often we see retailers investing in excellent instore experiences and seamless online purchasing journeys, only for customers to be left down at the final hurdle (and arguably, one of the most important touchpoints). A future-focused retailer, however, will know the value of investing in reliable delivery partners and holding them accountable to strict service level agreements. 

Further to this, smart retailers will fully engage with the delivery process, which allows them to own the customer experience end to end. Take click and collect services as an example. What could be done to inject greater excitement and anticipation around parcel collection, over and above queuing at the till and waiting for the parcel to be located?

Imagine a click and collect service where a dedicated customer service advisor greets you at the door and invites you to wait in a comfortable seating area where you can browse brochures and hero products. Imagine, too, if you could unpack your item while seated in that space, then try it on and recycle the packaging. Any returns could be fulfilled there and then, with opportunity for the customer service advisor to direct you towards something better suited to your needs. A transactional process could be transformed into an immersive brand experience that lets customers know just how much they’re appreciated.

Success in the retail space has always been about keeping up with customer desires– and now that rapid social, economic, and technological change is creating a whole new suite of customer needs, retailers can seize the massive opportunities that lie ahead.

No one can predict the future, although you can imagine it. Prepare for the future of your brand, today. Talk to Yonder. 

 

Confidently predict how audiences will respond to your business initiatives.

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