Five trends for the future high street
Yesterday, I joined a retail round table discussion hosted by my client Freeths solicitors. Senior executives from a range of big retail brands joined us for two hours of conversation and cracking food.I kicked the discussion off with a little provocation. Here’s the five bullets I used to get people talking.In the future…
…augmented reality personalises every space
The first thing you need to know is that our physical and digital experiences will continue to collide. In ten years I believe we will spend 10–12 hours each day experiencing the physical world through a digital lens. That is to say, in ‘augmented reality’ (AR) or ‘mixed reality’ (MR).Initially this will mean that everyone starts to wear smart glasses containing a smart-phone-scale computer, a pair of digital lenses, and a front-facing camera, as well as a variety of user interfaces: eye-tracking, bone-conducting microphone and speaker.There’s much scepticism about this idea, in the wake of Google Glass. But I think a lot has changed in the nearly five years since Glass launched. For a start, the amount of hours we spend glued to screen continues to rise, with the latest Deloitte figures showing many of us walk right across roads while staring at our phones. Secondly, our acceptance of cameras everywhere has grown. They’re now on many car dashboards, on cycle helmets, on drones, and in kids hands as little action cameras — every beach is peppered with people shooting in high definition. And no-one bats an eyelid.This technology changes everything — particularly the front-facing camera. Now our machines can see what we see, and combined with all the other sensor data, including location, develop a hugely rich picture of our physical world interactions, as well as our digital interactions.
…more and more shopping is done for us
I’ve argued before that many of our low-engagement purchases will be handed over to a personal digital assistant. Toilet roll, tinned tomatoes, that sort of thing. No-one enjoys shopping for them, but no-one wants to run out. So why not let an AI-driven assistant ensure that you are kept supplied and never think about them again?Increasingly I’m convinced that more of our high-engagement shopping might be taken over as well, or at the very least, assisted.Right now, clothes shopping online remains a lottery. Inconsistent sizing, even within single brands, means that neither men nor women can shop confidently without trying goods on. And reverse logistics — the returning of goods — is an expensive nightmare for brands, especially when dealing with low-cost ‘fast fashion’.Both of these issues can be solved. Manufacturing data could be applied to give the most detailed fit data, and supplemented with shared data from people who have tried goods on. With a digital personal assistant holding your measurements — updated daily every time your head-mounted camera catches a mirror — you could buy with extreme confidence something will fit.Or your personal digital assistant could buy for you. Everyone loves surprise post. And we’re increasingly signing up for subscription-based purchases for everything from pants to organic vegetables. Why not give your AI some discretionary spend to surprise you with a new item of clothing every month — or even week.With the rise of autonomous vehicle — including the rolling drones trialled in Greenwich last year — automated warehouses, and better integration of offline and on, the costs of reverse logistics start to fall. Brands can be more confident sending out goods that will fit and suit their clients. And know that if things do need to come back, it won’t cost the earth.
…but the tactile experience grows in value
All this suggests that there will be more damage to an already-challenged high street. But speak to 16–35 year-olds and it becomes clear that they have an enormous attachment to the high street and the physical experience it offers.According to research I was involved with for the Salesforce Future Ready Retail programme, the high street is an important social venue for many (29%). 28% say they go for ‘something to do’ and 43% say they go just to get ‘out and about’. This trend is likely to increase: we have growing multiple occupancy in shrinking homes. People need a third space to escape to, so footfall shouldn’t be a problem.But will they buy? Most of this cohort say they go to the high street to research or make purchases. 58% want to try items on or test them out. 54% want to touch or feel items before they buy. 51% value the high street for the instant access it provides them to goods. 38% are seeking ideas.Altogether, 96% say they still like to visit actual shops on the high street and in shopping centres. The challenge though, is connecting this physical activity to digital commerce.
…necessity connects physical and digital
The reality is that many people try offline and buy online. Not only are the prices potentially better, but the convenience is increasingly greater. With rapid fulfilment, why lug your shopping back when it could be delivered to you, neatly packaged, by the time you arrive home?As the figures above show, the offline experience is crucial to the buying process. The challenge is demonstrating that with enough confidence to continue investing in it. The widespread acceptance of augmented reality devices could solve this problem. The data will be there to track someone through a physical interaction with a product right through to their digital purchase. However, two problems remain.First, we will not be able to make a causal connection, only a correlation. This shouldn’t be too much of an issue though: there is rarely a causal connection between physical advertising and the purchase, but nonetheless we continue to invest billions in it.Second, there is no obvious mechanism for paying the provider of the physical world experience for the digital purchase. Should one retailer pay another because an online purchase was spurred by an offline experience in their store? Not likely.More likely is that brands will start to have to foot the bill for physical exposure, and find ways to map the investment in one back to the returns in the other. In this scenario, department stores have an enormous opportunity, aggregating the costs of physical exposure and charging brands for the privilege. We may yet see the renaissance of the department store as a venue for people to touch and feel goods, even if their purchases are ultimately offline. Some may feel this is already what they have become, but in the future it may be a sustainable business model.
…in-store the focus is on product and service, not transaction
For those investing in stores, they will want to ensure that they can maximise the value of that investment. This means focusing on product exposure and service quality and not on the space currently devoted to transactions. Tills will largely disappear, replaced perhaps by RFID systems, but more likely in the long term by computer vision systems tracking goods around (and out of) the store — as seen with Amazon Go.Human staff will be augmented by virtual assistants, powered by the full range of data captured about each shopper and what that shopper chooses to share from their own digital assistant.
Five trends for the future high street was originally published in Book of the Future on Medium, where people are continuing the conversation by highlighting and responding to this story.
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