The Future of Retail Over The Next Five Years

From an interview on the future of retail with Matthew Pavich, Revionics Managing Director of Global Strategic Consulting by Fotis Georgiadis of Authority Magazine. Originally posted on Authority Magazine.

Can you share 5 examples of how retail companies will be adjusting over the next five years to the new ways that consumers like to shop?

1. Growth in eCommerce: COVID-19 has accelerated the growth of eCommerce and forced a lot of retailers to reconsider how important it is. Now, we’re looking at retailers who didn’t have a large eCommerce platform before trying to figure out how to grow their online channel. As this channel expands, they need to consider additional things, including how to price competitively and how to be price transparent. Additionally, there will be an increase in potential competitors as new retailers who are primarily focused on eCommerce for a specific category enter the market, creating a challenging landscape for the future of retail.
2. Shift in operational models: Because of all that’s going on this year, a lot of retailers are learning about ways to be more operationally efficient. For example, retailers who haven’t thought about working from home might want to reconsider that now that we’re in a post-COVID environment. Even going past that, how retailers set up the stores and interfaces will also change. Basic things like tap-and-pay, which the U.S. has always been behind in, will become more important as people are more afraid to touch pin pads. Retailers might also make the bold move to restructure operational formats, like the way aisles are spaced for safety, in case something else happens again. By preparing now, retailers won’t have to redo everything five years from now if another outbreak occurs and may even find that they save money as a result.
3. Change in guard of who’s shopping: Over the past 10 years, there’s been a dichotomy regarding millennials versus boomers and how retailers can target millennials to buy their products. But in the next five years, we’ll see a shift in the narrative with some emerging focus on Gen Z. With this change, we’ll see a difference in how retailers reach customers, the type of products they put out and a change in social responsibility to cater to the younger generations’ preferences. The retailers who get in front of this trend and better understand their customers will be more successful moving forward.
4. Rise in AI and analytics: If we think about the last five years of retail, the amount of technological sophistication and the ability to be more dynamic in pricing and make decisions quickly has moved exponentially faster. The approach of retailers shopping their competitor’s website once every month to match their pricing will no longer be good enough. They will need to process and execute against other retailers much faster. What may work today from a technological and speed perspective will similarly need to be upgraded.
5. Move in management: The consumer base is becoming more diverse, but while retailers will always have a larger percentage of sales going to women, their management personnel are not reflective of this. To drive change, we’ll see more women in charge and holding higher levels of management at top retail companies. This is a direction that will be good for the industry and something we can expect for the future of retail.