Where is Retail Business headed in Australia?
Share on social media:
Ten years ago the CBD areas in all Australian Capital Cities was 80% retail, and 20% hospitality. Today it’s the other way around.. 20% retail and 80% hospitality.
In ten years the landscape has changed, and it appears that this is only the beginning.
It would be easy to conclude that retailing is all online now, and that retail businesses are doomed, but are they?
Sure, the future is going to be different, but how will the future be different? Nobody can really accurately predict the future, but we can identify trends and look at what the experts are saying. So here are some (edited) thoughts of some experts:
Showrooming—the practice of shoppers using retail stores to discover products they'd like to buy, then completing their purchases online where they can find better deals—is often cited as a concern of physical retailers. With an enticing mix of low prices, breadth of selection, and convenience, online retailers attract shoppers in ways that brick-and-mortar stores struggle to compete with.
eMarketer reported that global e-commerce sales hit $1.3 trillion at the end of 2014, an increase of 22 percent over 2013. Meanwhile, growth at U.S. retail outlets is in the low single digits, according to figures from the U.S. Department of Commerce collected by Business Insider.
But the prospects aren't all grim for physical stores. In fact, retail experts believe there’s a tremendous opportunity ahead as the worlds of online and offline commerce begin to converge.
"We will see more disruption in the next 10 years of retail than we did in the previous 1,000,” said Doug Stephens, founder of Retail Prophet.
Here are five predictions for how traditional retail will look in the future:
- Retail stores will embrace showrooming
Rather than competing with showrooming, retail stores in the future will begin to embrace it.
“Stores will become like museums—we will go to see something, to learn and be entertained,” predicted Thomas Keenan, adjunct professor at the University of Calgary.
Further, beacons—sensors placed around stores that communicate information to smartphones—will track information such as which products customers linger around. The beacons can then push information on those products to customers' mobile devices, allowing them to order from their devices and have merchandise shipped to their homes.
Beacons are already deployed as a way to provide more interactive shopping experiences.
- Analytics will be commonplace in physical stores
E-commerce retailers have had a leg up over their brick-and-mortar counterparts in terms of their ability to selectively target customers based on insights into consumers' preferences and habits, as well as their ability to refine their tactics continually based on insights they glean via analytics.
In Future, offline retailers will have the same tools available to them and will employ them widely. Whether it's using analytics to map where people walk and what they pick up to better position products in the store or tracking shoppers at the device level to target promotions to them, data will be used to understand customers and increase sales.
Experts foresee the rise of more intelligent devices in stores that can determine the demographic information of customers as they walk by, and target ads to them through a video console, similar to the smart shelves being developed by Mondelēz International.
As more customers start opting in to apps that allow them to be identified individually, they'll receive the benefits of more customized experiences and offers; however, retailers should also be mindful of mounting consumer privacy concerns.
- Payments and transactions will become totally transparent
Apple's foray into mobile payments signals the mobile payment model may soon be ubiquitous. In the future, not only will more transactions take place via our mobile devices, whether it's our smartphones or wearable technology leveraging near-field communication (NFC) technology, we'll also see the emergence of even more streamlined payment experiences.
The goal for companies is to make the payment process as seamless as possible. Starbucks mobile payment app—which allows customers to pre-order and pre-pay for beverages via their iPhone before arriving at a Starbuck’s location—is just one example of how businesses are moving toward more frictionless payment and checkout experiences.
At large retailers like Costco, shoppers will simply walk out of the store while the merchandise in their carts is automatically tallied and the total charged to their accounts.
- Retailers will make better use of sensory technology
Retail stores will have more awareness of our emotions and how to excite our senses in the future.
Using Emotient, retailers can detect when consumers react positively or negatively to things such as signs, product displays and interactions with sales associates. This will allow retailers to aggregate data on customer sentiment and to adapt offers in real time based on how customers are feeling.
It is predicated that technology that subtly leverages our senses will be used more pervasively within stores, with greater emphasis on the smell within a store or other sensory details, such as music. Experiencing this type of store can develop a lasting, physical impression of the brand with the consumer, which may stimulate a purchase decision at a later date or online.
- Technology Will Become the New Sales Assistant
Technology will increasingly automate a lot of routine and mundane work that happens in retail institutions. Whether it's more self-service check-outs, in-store mapping to make it easier for customers to self-navigate around stores, or beacon and NFC technology for greater self-education on products, technology will play a greater role in automating the retail experience. In addition, retailers will be able to take advantage of managed infrastructure at the edge. This is a vitally important enabler because having to add relatively expensive IT staff can make deploying new technologies in retail environments cost prohibitive.
Of course, sales people won't disappear. Rather, with many of their routine tasks automated, they will be able to focus on building relationships with customers while increasing sales and affinity for their employers.
E-commerce has certainly revolutionized the way we shop, but brick-and-mortar stores are far from dead. Increasingly, online retailers have begun opening physical stores for the first time, which signals that there may be a return to real world shopping – only this time, reinvented for the digital age.
This article is from Forbes Magazine.
Benchmark Business Sales and Valuations
benchmark broker business valuation cafe hospitality increase sell sell a business sell my business