Two consulting groups, PwC and Kantar Retail, have released a report telling retailers what to expect in the next decade, as shopping behavior continues to change.
"Retailing 2020: Winning in a Polarized World" highlights a number of trends that are already underway today, and are expected to continue. Among the report's key points:
- By 2020, the retail industry will be in a "post-modern" era. The consultants expect one of the major features of this new era will be the decline of the super center as a major growth-driver (think about Wal-Mart's ongoing experimentation with smaller store formats, and the tremendous success of small-box retailers such as Dollar General and Family Dollar).
- As it is today, non-store retail will be the fastest-growing part of the retail business. Online is driving that trend today, but mobile and tablet applications will become more important in the future.
- Income and demographic gaps among shoppers will continue to widen. Shoppers will increasingly fall into "under 30" and "over 50" groups, as both sectors of the population swell. And as income inequality increases, retailers will have to tailor their offerings to more specific segments of the population.
- Much less mass appeal: As retailers continue gathering data and segmenting shoppers to find more "consistent and profitable response behaviors," they'll have to target an increasingly fragmented audience. "Overall, this process will require retailers to find growth in manageable, niche audiences or fragments and to isolate and respond to newly forming, or dynamic pockets of opportunity."
- Driven by technology, the speed retailers need to seize trends will increase remarkably. "Some trends will work on a rapid cycle, with some remarkably important for just a few days or even hours."
- More culturally-neutral icons with global appeal, as national boundaries weaken and companies need to appeal to shoppers in multiple places. "The most common solution will be to leverage automated human or animal-like avatars (computer representations of a person, company, or entity) to deliver to a wide, diverse audience."
- Charlotte gets a shout-out in the report as a city that grocers and distributors have historically identified as similar in many ways to Rochester, NY. But there are differences, the report notes. "Rochester and Charlotte are not similar for every business problem; for seasonal programs, anticipating summertime to come to both cities simultaneously may produce an unfortunate result."
|An avatar from the report|