The Four Ps of the Future of Retail

Rapid technology advancements and rising customer expectations have disrupted the global retail industry in the past decade. Outdated retail store concepts, new generations of consumers, and new points of commerce (voice commerce, for example) have also disrupted the industry; however, COVID-19 has been the key disruptor. After the pandemic, retailers should begin to look beyond what consumers want; they should build conversations around product experiences, brand engagement, and preferred purchase options. This Frost & Sullivan whitepaper will help retailers understand the current industry scenario, in light of COVID-19 and other disruptors, and will offer assistance in terms of strategizing for the future.

In a post-COVID world, four key aspects will disrupt the global retail industry. Retailers must understand their implications to be able to plan for the future.
·     Future Retail Place: Physical retail is being reinvented, and stores are moving from small boxes to novel boxes (experiential stores).
·     Future Points of Commerce: New points of commerce, such as in-vehicle commerce, are being introduced.
·     Future People: Generation Alpha is the new generation of influencers and future customers.
·     Future Processes: Technology advancements, including artificial intelligence (AI), virtual assistants, and augmented reality/virtual reality (AR/VR), are being incorporated in retail processes.

In future, physical stores will aim to enhance the overall customer experience to drive purchase intent. New formats, including experiential and convenience stores, will begin to replace traditional stores. Advancements in technology have accelerated the creation of new points of commerce, such as home ambient commerce and in-vehicle commerce, further driven by the advent of contactless commerce due to COVID-19. Increasingly, commerce will happen anywhere and anytime, facilitated by image commerce and voice commerce. The process of scan/talk-compare-purchase across online and offline channels will become the norm.

Generation Alpha not only comprises the latest power brokers in the family but will also become a dominant population cohort by 2025. Millennial parents are significantly influenced by the opinions, habits, and behavior of their children, and retailers are increasingly understanding that Gen Alpha possesses a significant influence over decision-making in terms of family purchases. Therefore, brands need to work on building trust to be able to create lasting relationships as these children will soon become consumers.

Contactless technology will gain significance in the post-COVID world. Companies will increasingly invest in digital services, including AR, VR, 3D printing, AI, and data analytics, to gain a competitive advantage. The retail space will undergo massive changes as the age of disruptive technology, exacerbated by COVID-19, continues to impact consumer behavior and buying trends. Physical stores will reinvent themselves; they will evolve from small boxes to novel boxes, and the emphasis will be on customer engagement and experience. New points of commerce will emerge, and Gen Alpha will influence purchases. Advanced analytics, purchase automation software, and virtual assistants, among other technologies, will revolutionize all aspects of retail, leading to a personalized, fulfilling customer experience.

Author: Merali Krishnan