The future of retailing

I confess. Like most men, I find shopping boring. Yet what retailers do next is more interesting than the travails of Tesco today, or the more general problem of too much retail floorspace in the UKWe’re not just talking about the rise of the discounters, with Aldi and Lidl being the Nigel Farage of the market. No: nearly 100 years after the Piggly Wiggly self-service supermarket opened in Memphis, Tennessee, retailing – traditionally, a weak spender on R&D – just might be poised, once again, to adopt some serious innovations.

First, mobile IT will change life for retail staff. Brits now spend nearly an eighth of their shopping money online (1). More significantly, a third make a monthly purchase on their smartphones (Swedes, Germans and French: 19, 15 and 8 per cent). (2) Peter Fitzgerald, sales director and head of retail at Google UK, believes that for most retailers, ‘the majority of the time that consumers will spend looking at products will be on a mobile device’. (3)

M-tailing means that the shop worker of tomorrow will perform a lot of price comparisons on customers’ handsets. If deflation persists, aided and abetted by such comparisons, shop staff may even have to be prepared to haggle. After all, a quarter of British mothers use mobiles to buy at a store different from the one they are standing in (4).

Second, the Centre for Economics and Business Research predicts that, by 2020, more than 20 million adults will use mobiles to pay for things at the checkout. They’ll part with more than £14bn that way – triple today’s figures (5). Result: retailers will have to accept that, in methods of payment, the customer is always right.

Lighting will form a third area for innovation. Already Sainsbury’s store in Leek, Scotland, uses General Electric LED lights inside and out (6). LEDs can last 30,000 hours. Unlike fluorescents, they come on at once in sub-zero outdoor temperatures ­– and, in-store, they render colour better.

Bigger than these changes could be retailers’ efforts to raise productivity and so lower prices. Any revival in UK wages may prompt interest in using design to streamline shop workers’ activity. Before the crash of 2008, academics at Eindhoven, the Netherlands, began unearthing fat costs and tricky processes around the stacking of shelves (7). A little earlier, Accenture found that much could be done for efficiency through the adroit use of ‘shelf-ready’ packaging (8). These studies will one day be dusted off, updated and used to bring real automation to the aisles. Already Lowe’s, the American DIY retailer, has Fellowrobot’s OSHbot, a fairly simple sense-and-display robot, strolling its stores, scanning your type of screw and telling you where more of that type are to be found (9).

The final innovation retailers should adopt? Fight the next war, not the last. Discounts, coupons, endorsement by celebrity chefs, inner-city ‘metro’ stores, Christmas commercials – these are about as futuristic as cannibalising existing sales by practicing, and going on about, ‘freshly clicked’. Instead, shops need to shift toward the physical, inter-personal and intellectual: toward street markets, catwalks, vaudeville, circuses, 3D printing, exhibitions, museums, debating chambers and lecture halls.

Two years ago Belgium’s Holocube showed off holographic movies for Nike. (10) Microsoft’s Hololens, just launched, could also make shopping more informative (11). However, the next generation of shops will not just be about how wearables and ‘nearables’ replace smartphones. They will also be architectural dramas in load-bearing graphene and structural electronics.

Just for once, the shopping trip of the future might be something to delight in, not just endure.

References

1. Office for National Statistics, Statistical bulletin: Retail Sales, December 2014, on http://www.ons.gov.uk/ons/dcp171778_392208.pdf

2. Christopher Ratcliff, ‘32% of UK consumers make purchases on a smartphone: stats’, Econsultancy, 13 March 2014, on https://econsultancy.com/blog/64511-32-of-uk-consumers-make-purchases-on-a-smartphone-stats

3. Katie McQuater, ‘Have retailers truly tapped into the power of mobile commerce this Christmas?’, The Drum, 11 December 2014, on http://www.thedrum.com/news/2014/12/11/have-retailers-truly-tapped-power-mobile-commerce-christmas

4. Sejal Patel, ‘UK Mums: The Mobile Shoppers’, Retail Gazette, 1 December 2014, on http://www.retailgazette.co.uk/articles/04034-asda-remains-a-strong-contender

5. PayPoint, ‘Paypoint reveals plans for multi-channel future with merged Mobile and Online business and new group brand’, 20 May 2014, on http://www.paypoint.co.uk/news/paypoint-reveals-plans-multi-channel-future-merged-mobile-and-online-business-and-new-group

6. GE, ‘LED Retail Lighting – Lumination™ Linear Suspended’, 2013, on http://www.gelighting.com/LightingWeb/emea/projects/sainsburys-led.jsp

7. Susan van Zelst and others, ‘Models for Store Handling: Potential for Efficiency Improvement’, 2009, on http://w3.tue.nl/fileadmin/tm/Capaciteitsgroepen/OPAC/Zelst_et_al.pdf

8. Accenture/Efficient Consumer Response, ‘Shelf-ready packaging – addressing the challenge:  a comprehensive guide for a collaborative approach’, 2006, on http://ecr-all.org/wp-content/uploads/ECR-Europe-SRP-Blue-Book_final.pdf

9. Fellowrobot, ‘Meet OSHbot, our newest member of the family developed in partnership with Lowe’s innovation labs’, 2014, on http://fellowrobots.com/robots

10. ‘ISE 2013: HOLOCUBE Exhibits the HC-90 Hologram Screen’, 31 January 2013, on https://www.youtube.com/watch?v=xmXGsx3lqMo

11. Dan Berthiaume, ‘TechBytes: Two Reasons Why Microsoft HoloLens May Disrupt Retail (and One Why It Might Not)’, Chain Store Age, 2 February 2015, on www.chainstoreage.com/article/techbytes-two-reasons-why-microsoft-hololens-may-disrupt-retail-and-one-why-it-might-not#