Only a few years ago analysts were predicting the slow the death of the high street and physical retail. However, we are seeing a stabilization of this decline with the trend in store closures in the US set to peak as online and offline shopping become one. Whilst the threat of digital world is ever present, physical retailers are finding new ways to differentiate, survive and even prosper in this brave new retail world. In this article I take a look at what innovations and trends we can look out for in 2020.
1. Online is going offline
The world’s biggest companies are powered on and fueled by the data that we produce. Up until now physical retailers have struggled as they have not been able to access key consumer data the like of which was only available in the digital world. However, with the rise of advanced computer vision technology 2020 will be the year physical retailers get access to advanced instore consumer data that even the digital world cannot deliver.
2. Omni Channel finally delivers
The lines between online and offline retail are becoming ever more blurred, with customer buying journeys becoming harder and harder to map. For many years we have talked about the Omni Channel experience but without ever seeing the reality of the hype. With the maturity of new technologies, 2020 will enable retailers to complete the last piece of the consumer data jigsaw to unite the offline and online paths and finally deliver the Omni Channel promise.
3. Automation and AI adoption begins
Whilst 2020 will not be the year when the automated store becomes prevalent on our high street it will be the year when we see it emerge. The AI and Computer Vision technology required to create the autonomous store is at a stage where consumers will begin to be able to trial the experience for the first time. Frictionless shopping is an advantage that is easy to understand from a consumer’s perspective and it’s not hard to see why physical retailers are rapidly adopting AI technology. In a recent report, Capgemini calculated that retailers can save up to $340 billion annual by adopting AI and autonomous store type innovations.
4. The stockroom gets a makeover
The back of house has long been a neglected area of retail, whilst consumer are starting to see benefits of fast payments and check out less stores the back room has been bereft of innovation. We will see a stark change to this in 2020, with advent of smart RFID and Ai to automate stock takes with vendors such as Detego revolutionizing the unseen side of retail.
5. The continued rise of sustainability
The rise of sustainability and the increased awareness in our environment will continue to be a trend that retailers must tap into in 2020. Paloma Mass a venture analyst at Plug and Play commented: “Retailers know that adopting circular economy principles and producing in a more sustainable way will help them engage with their existing customers and reach new audiences more concerned about the environment. They should be applying these new technologies that will soon become essential for every player in the industry.”
6. Experience is everything
Creating unique shopping experiences will continue to be a driver for differentiation and success for retailers in the coming year. Creating experiences that turn the shop into a destination and ‘a thing to do’ will be driven by the advance of technologies such as image recognition that enable personalization such as consumers are used to in the online world. The best retailers have understood for a long time that their survival depends on the experience they provide, these best in class retailers will continue to drive instore innovation by using cutting edge technology.
7. Sweating the assets
Continuous instore innovation and sweating existing assets that physical retailers have will continue to be a key point in 2020. Take for example the growing trend in upgrading traditional DOOH/digital advertising boards to ‘smart signs’ that have the ability to understand complex demographics of consumers e.g. age, gender, engagement and even conversion rate. As retailers upgrade their ‘dummy’ screens it will become a catalyst to enable them to sell their media assets independently of media agencies.
8. Digital natives get physical
Last year saw the launch of Amazon’s first physical retail store and along with the acquisition of Whole Foods marked the confirmation that even the biggest and best online retailer sees the value in ‘getting physical’. This trend for online marketplaces moving into the ‘real world’ will continue to grow during the coming year.
So, we have come full circle, 20 years ago the race was on ‘to get a digital’ and now the race in 2020 is for digital retailers to figure out physical retail. Thanks to rapid growth in technology such as computer vision and artificial intelligence physical retailers have the chance to not only compete but to complement their digital partners to create a truly innovative instore experience to help them thrive.