It is a time of worldwide change in the retail industry. Technological advancement, a transitioning consumer behavior paradigm and tectonic movements in innovation leadership from the West to the East are all contributing factors to the creation of this new landscape. These shifts affect all stakeholders, including business executives, consumers, third-party service providers, and investors. Many of the voices in the industry, from research firms and solutions companies alike, point towards adaptation as a means of survival. However, the uncertainty that comes with change poses significant risks.
The role of AI
Artificial intelligence is developing from being a marketing buzzword to providing a set of tools that could offer a viable information-gathering and decision-making advantage for early adopters. Some of the most successful brands on the planet are implementing AI interactivity for tech-savvy customers. Examples range from chatbots that let consumers order fast food to smart devices allowing homeowners to dictate controls to entertainment systems, appliances, and even to make delivery purchases.
Mobile shopping
Mobile shopping is increasing in popularity, as it has been for several years. However, brick-and-mortar stores are also doing well. Despite high-profile closures and bankruptcies, such as the folding of Toys ‘R’ Us, traffic to physical stores has grown steadily. The reason behind the success of small stores in a market that seems to be dominated by online giants is multifaceted. Possible contributors include:
- Small retailers re-investing in technology
- Incomplete saturation of certain markets by online retailers
- Increasing customer preference for unique, authentic shopping experiences
- Failure of e-commerce companies to meet shipping expectations
Securing risks
Businesses are finding ways to face competitors with vastly different models. Data-driven responses to markets are, as always, reliable — arguably more so in an environment when so much data can be collected and analyzed quickly. However, new territory has its own dangers: data breach, in this case. Startups — and established companies — are therefore increasingly arriving at their top choice for business insurance policies based on robust liability coverage should customer identity information be compromised.
Inspiration from international markets
Smart business leaders have always been ambitious — for information as well as for economic success. With China’s Singles’ Day overtaking Black Friday and Cyber Monday as the world’s largest online shopping event, it is clear that at least some of the best retail innovation will be coming from the Eastern giants, such as Alibaba, rather than from Western companies, such as Amazon. Being able to identify the ways in which global players are leading in their own innovation territories could help new entrants — or service startups — locate unclaimed spaces in the technological and strategic landscape. Trend analysis could also isolate pivot points for existing corporations up to the enterprise level.
The shopping experience
Another of the most distinct major trends in recent years is the emerging consumer’s preference for an immersive and unique experience when shopping. This trend crosses retail and consumer-focused business sectors, from cosmetics shops to payment processing services. Innovators in each respective industry, such as Gucci, Lush, and PayPal’s Venmo, are all taking advantage of this experiential focus: by making ethical decisions at the executive level, providing an immersive in-person experience and increasing shareability of the product, respectively.
The time for decisions
Existing organizations may need to re-evaluate risk profiles in light of operational changes. Young businesses in the planning stage could need to focus less on pricing a product and more on how consumers will experience the transaction. The retail world is always shifting, but the entire world economy is currently in a state of flux. This creates a uniquely challenging and competitive environment, but also one in which an advantage can be found in broad access to information and the security to act upon what one learns.
