FUTURE OF ECOMMERCE: HOW SMALL RETAILERS WILL CHANGE IN 20 YEARS
Mom and Pop stores, once the bread and butter of the retail world, are all but becoming relics of a former time. As large retailers and big box stores sprawled across the country, undercutting prices while offering more inventory, smaller niche retailers simply can’t compete. Over the years, many of these shops that would try to plant their seed at a physical location have found that online or ecommerce offerings were more suitable to their needs and means.
From Amazon to Etsy, to Magento Community and Shopify, there are numerous outlets for smaller retailers to get their products in front of consumers. But what happens in 20 years time when these large retailers begin to consume one another, when name brands become less meaningful in place of price and quality, or as the desire for more meaningful experiences become vital to product sales? In the year 2037 we may not quite be on planet Mars, but one thing is certain, the face of retail and ecommerce will have drastically changed, and this is particularly true for smaller retailers and mom and pop shops. I, along with other industry professionals, was asked about how small retailers will change over the next 20 years. Here is what I had to say.
WHAT ROLE WILL PHYSICAL RETAIL STORES PLAY IN CONSUMER BUYING, AND HOW WILL THEY HAVE CHANGED?
Greg: The concept of the store really hasn’t changed in 100 years. Stores have gotten bigger, but in most instances, the fundamentals are the same. You go there to purchase something and take it home the same day. I don’t think this model is doomed, even with advances in technology.
People are social by nature, and I think they will continue to want to touch, experience, and take home purchases on the spur of the moment. Assuming people will always be willing to wait for products is assuming people will no longer want immediate satisfaction. If anything, with the expectation of fast and free shipping, we are moving closer to consumers’ expecting immediate gratification.
It’s possible we will see an increase in store locations, but with less inventory. For this to be successful on a large scale, shipping cost will need to come down. Housing all inventory in several key locations around the country means retailers will have to ship one product at a time, rather than bulk ship to key stores. This might lead to one mega-store in each metropolitan city, with smaller showroom stores around the city. This will allow products to bulk ship locally without forcing retailers to build out distribution hubs around the country. As of today, Amazon and Walmart are probably in the best situation to execute this strategy.
The concept of checkout-less stores is sure to expand over the next 20 years. As technology improves in this space, I think more and more retailers will take to it. I am skeptical that it will be adopted widely by retailers. I think it is better suited to products like clothing than it is for groceries, for example.
WHAT DO YOU BELIEVE TECHNOLOGICALLY OR CULTURALLY WILL BE THE BIGGEST FACTOR IN HOW CONSUMERS BUY IN 20 YEARS?
Greg: Virtual reality and augmented reality will play the biggest role here. I think consumers will be shopping in their living rooms using headsets, or other applicable technology, where they can try on products, see holograms or 3-D views of themselves with products. Similarly, virtual in-store shopping certainly will be more advanced than it is today. People will be able to visually shop their local brick-and-mortar store using VR or AR and have orders shipped to them.
Finally, on this same note, we can expect online-only retailers to create virtual storefronts to better connect consumers with their brands. Where an online retailer used navigation bars to direct people, they can create their own virtual stores that bring together a consistent look and feel for their brand and ease the shopping experience by allowing the user to “walk” through their stores.
WHAT KIND OF JOBS WILL BE NEEDED TO SUPPORT FUTURISTIC RETAIL AND ECOMMERCE BRANDS?
Greg: For virtual stores, we’ll need virtual retail designers, or virtual architects. These people will be in charge of designing a virtual floor map, as is done with brick-and-mortar locations. However, knowing what works in the physical retail storefront will be quite different in a virtual storefront. Counter-clockwise shopping, brand merchandising/placement based on eye level, and size of shopping carts are not likely to be as meaningful in an online world. It will be interesting to watch how the online version evolves.
Software engineers already are becoming a permanent fixture for nearly every company, but positions in designing virtual environments, as with video game creators, will become a more common role for retailers or agencies.
I don’t believe the role of a human marketer will go away. Commerce marketing automation will make their jobs easier, surfacing data and related analytics faster, making it easier for marketers to predict ways they can boost revenue. The marketer’s role will continue to shift as consumer adoption of new marketing tactics are accepted and rejected. Humans marketing to humans always will be important.
LASTING THOUGHTS
Greg: I think there will be a time within the next 20 years where there will be a bit of a technology backlash. I think people will crave the “quiet” that comes from being disconnected from the online world. Technology won’t go anywhere, but you may find people sharing less online and doing more in-person. This may lead to the re-emergence of brick-and-mortar stores as a destination, much like the shopping malls of years ago.