The future is uncertain by nature. Nobody really can predict the future. At least I can’t (I wish I could).
I am not going to predict the unknown-unknown – things that are so unexpected that nobody can predict – but I am going to talk about certain trends that are already occurring.
And there are two main trends that are changing the future of retail: The internet (of course) and the aging of population.
1 – The internet.
For some retailers, the internet is the wolf. They think online stores, review sites, and all that is yet to be invented will destroy all brick and mortar stores.
For others this is the opportunity to open a fashion store with $100 and create a retail empire.
Actually, you could create an e-store with $100 but it would be very difficult (you should read Chris Guillebeau’s The $100 Startup, it´s a great book).
I think brick and mortar stores are going to survive. They will have to evolve to something a bit different, but they will remain for years and years.
And this is what I think will be the successful stores (brick and mortar) in the future of retail:
- They will be smaller. Not because rents are getting higher, but because stocking goods is expensive, and because people don’t want to spend much time shopping as they used to.
- Storytelling. Customers are not going to stores just for buying products, but also for living an experience. Stores will have to be like museums, or like a movie, or like a leisure park. You will have a story, a script, and them you create an environment to that story.
- Storefronts and shop windows will be very important because customers will spend less time shopping, they will only visit stores they think are for them. So the storefront and window must stand from other stores and must tell immediately the story of the store.
Customers will spend more time on internet searching for products and buying. This is why brick and mortar stores will have to evolve. But at the same time, e-stores will suffer from more online competition.
Two things are happening, right now, to online stores:
- Bouncing rates are getting higher. People enter online stores and leave right away without really seeing what’s in the store.
- Time spent on each site is decreasing. When e-stores were novelty people would spent long minutes in stores. Today that doesn’t happen.
How can e-stores evolve to succeed:
- They must have a different design from other stores. Unfortunately, this is not happening. E-stores look all alike. The majority of web designers are doing a bad job. They are copying each others designs. E-stores are becoming boring, but customers want novelty.
- The design and messages must be in line with the story of the store, just like brick and mortar stores.
2 – Aging of population
This is happening all over the world, but especially in developed countries. People are living more years and births are down. This has impact on the future of retail.
The majority of population is 50 years or over, but if you go to the mall and take a look at the stores, what can you see? The majority of stores are made for teenagers and young adults.
I understand teens and young people are a better market than middle aged and old people. They buy more.
But the teenage market has plenty of competition. On the other hand, the market for older people has much less competition (and I must add: worse competition).
New retailers are usually young people. And they like to sell to young people, because they think they understand the market better. I can understand that. What I don’t understand is why they think old people don’t like to buy. That is not true.
You could be making a lot of money if you were marketing older people.
The future of retail will not happen in 10, 5 or even 1 year. It’s happening now. What are you doing about it?