2017 Trends: Retail Innovation

It’s 2037 and I’ve run out of milk, washing powder and food. All essentials which I need back in my kitchen pretty quickly. So, I ask Alexa if she can order replacements. I trust Alexa to make choices for me, she’s normally spot on, almost as if she knows me better than myself. Which brands will she pick? The ones I know and love of course. So I order through her and it all arrives an hour later in an Amazon branded box. Another great, time-saving job from Alexa who never seems to let me down.

How Things Have Changed

Products now sit behind AI assistant walls, they decide what we should get now. And apparently that’s done through some sort of live bidding system to get me the best deal. I tell Alexa what I want and she instantaneously goes out to find the perfect products for me, finding out who wants to bid for my order to give me the best price, fastest. And I’ve got my preferred delivery-bot company who takes care of all my delivery needs.

Having got my essentials sorted I decide to head out to the high street. It’s a friend’s birthday and I want to choose her a present – I can’t ask Alexa to do everything.

Most shops are online now. Stores are for brands to romance us with free coffee, to meet friends and be surrounded by stuff we can buy and have delivered home even before we get there. I have a look round a couple of experience centres (what we used to call shops) and grab a coffee while I decide what to buy. Having chosen the gift I ask Alexa to have it delivered home today, in time for the party this evening.

I still like doing a bit of actual shopping (not everything has changed!) and I can do that at the retail survivors – the real artisanal stalwarts – you know, the hyper luxury/ hyper local shops still standing and so far, have proved irreplaceable. Real experiences and products of unmatched quality haven’t yet been replaced by technology. I head to the bakery, have a chat with the lovely baker I’ve known for absolute years, and choose a delicious handmade cake for tonight.

I get home to prepare for the evening ahead and decide that I really don’t have anything to wear – I definitely need something new and fast. I grab my VR glasses and sit down for a bit of a browse. Ten minutes later I’ve chosen a dress, offered my details to endorse the brand for the standard future discount and it’s with me in 30 minutes – evening saved!

How The Hell Did We Get Here?

So, this all sounds a bit farfetched, but we are certainly sitting on the precipice of big change. Could this all actually happen in the next 20 years? Well, think just how far we’ve come in the last 20 – in ‘96 it was all about CDs and the Palm Pilot. No one had heard of Google and we sent less than one text a month.

So now you’re on board, let’s map out the logical steps to our 2037 scenario above. We’ve already had the impact of the 2008 crash flipping the high street on its head and with Brexit on the horizon, we expect there to be real economic disruption all over again.

As inflation rises in response to this, brands become less important with more choices driven by price. And vitally, this price hunting manifests itself most dramatically online, where the best deals are always to be had.

As we all hunted for better deals, our online shopping habits became our default choice. This was supported by a fundamental redesign of the last mile. With the delivery industry revolutionised, we now have our own personally-selected delivery company working for us, not the sender, and drones reliably delivering to us wherever we are.

The Steady March Of Automation

Automation drove the adoption and normalisation of chatbots delivering customer service support. This enabled us to self-serve information and advice, killing off yet another reason to visit the high street – face-to-face expertise.

VR and AR became another nail in the coffin. Now mature enough to enable more natural shopping behaviours away from store, having to go to the high street to look at the chair or pair of trainers you wanted to buy became completely unnecessary.

There was a temporary shot in the arm for retail with the long awaited arrival of connected platforms, when payment tech finally joined the dots to enable fluid omni-channel experiences for the masses. This drove mass personalisation across all platforms, including in store with real time pricing and personalised offers – giving a reason for shoppers to visit a store rather than go online.

Inevitable Change

Despite this, inevitably the face of the high street had to change as shoppers shifted towards digital. It started an irreversible move towards a focus on delivering experiences and branded engagement in lieu of retail – from transactional to ‘brandactional’ spaces. It gradually became a place to meet, socialise, browse and experience rather than shop.

The Outcome 

The outcome of all this is that retail brands have been placed on a slippery slope that eventually sees them hidden behind automation platforms such as Amazon’s Alexa and Google’s Siri. The algorithms driving these AI agents start to make decisions for us based on what they think we want, or more scarily the types of relationships (financial and otherwise) that they have with their supplier brands. B2C brands are forced to behave just like B2B brands, with a complex web of resellers and distributors between them and their end customers.

And we were all quite happy with these changes. Cultural shifts such as the increasing age demographic and the rise in urban living meant that we all demanded shopping experiences which suited these new needs. And it suited the way our behaviour has changed – our need for instant gratification for example, was fulfilled by 24 hour access and under the hour fulfilment – something the high street could never provide.

What Now?

Back to today, what does it mean for us as brands, marketeers and retailers in 2017? If this is the future what should we be doing to prepare right now?

Well, for now, we think it’s still all about establishing and maintaining strong relationships between customers and brands. Driving real salience, preference and mental availability, so when that moment of truth arrives your brand is both front of mind and desirable.

But in a world where the choosing of brands and retailers will become sub contracted out to Alexa and her ilk, it’ll be vital to demonstrate you’re worth a place in a shopper’s ever short-cutting life. The building up of loyalty now will help in wiring those much desired behaviours going forward, so that you’re suddenly the default when decisions don’t have to be made by you anymore.

Loyalty will quickly evolve and start to take on, we believe, different guises. Solving problems and improving shopping experiences will be highly prized. As will brands that can demonstrate excellent and frictionless service. But the real shift could come from brands who really focus on returning to delivering unrivalled product and consumption experiences, potentially even tailored to the individual using the rich data that the likes of Alexa and future connected brand platfoms will enable.

As now, brands and retailers who continue to innovate and adapt will survive and thrive, others won’t. We believe the speed that businesses fail or succeed will continue to increase in this unforgiving but massively rewarding new world of data, defaults and delegation.

So, become the natural choice for a shopper (whether or not that’s via AI) and you’ve got a relationship to look forward to. Become a surviving stalwart, a genuine high street beacon offering serendipity and experience that simply can’t be replicated online (well not yet). Or swing completely the other way and focus on getting your product into a shopper’s hands with a little help from Alexa.

Each week TMW Unlimited is releasing a new thought piece on the trends and opportunities that they think will matter to marketers this year. You can read the full trend piece here.