Ten Emerging Trends and

Business Strategies Leading

the Future of Retailing
The Evolution of Retailing
“The best way to predict the future is to create it” (Abraham Lincoln)

The history of the future of retailing is being created today by leading innovative companies such as Amazon, Apple, Disney, Google, Nike and Zara. Each is leading the

way forward, pioneering specific initiatives that are defining the future of the retail landscape. Amazon is leading in the mining of deep customer insight and in creating

personalized shopping experiences. Apple is leading in the development of “smart” personal devices, Disney is building interactive stores, Google is developing Web TV,

Nike is integrating live customer input into product design and Zara is redefining the supply chain process. On the consumers’ side, customers are living in a fast-paced,

wireless, continuously connected culture and they are looking to easily manage and control their lives through time-shifting technology and smart media devices. A large

portion of their life has become “digitized” through emails, instant messages, downloads and virtual social interaction with friends, family and their favorite brands.

They are actively engaged with their favorite brands and they are interested in creating their own customized shopping experiences which allow them to shop efficiently

on their own terms, at the time and place of their choosing. These two worlds are quickly converging, with the retailers’ technological and process advances enabling

them to precisely target and engage the demanding customers who want to shop on their own terms. The leaders and winners in the next generation of retailing will be

the brands that fully integrate these technological and process advances across the organization, while empowering and developing a personalized connection with the

on- demand, digital customer.

The Evolution of Retailing
The consumers’ acceptance of internet shopping in the prior decade led to the development of multi-channel retailing, with

leading companies broadening their marketing reach and integrating operations to maximize cross-channel synergies. The next

five years will see the on-going convergence of smart technology, consumer insight, interactive-multi- channel marketing and

an express supply chain, all providing real-time insight and access to the digital customer. These brand driven advances in

marketing, technology and the supply chain, along with the progression of the customer’s digital lifestyle, will create a

dynamic customer to brand relationship and interactive shopping experience. The customer will have creative input and a

social connection with the brand, while the brand will have extensive real-time knowledge and precise targeting capabilities of

the customer. A comprehensive retail strategy that integrates these initiatives across the organization will support and empower

the customer to design their personal shopping experience and shop on their own terms: when, where and how they wish. This

puts the shopping controls in the hands of the consumer.

On-Demand Shopping
Trend: Consumer Choice & Control of Shopping Preferences
Strategy: Empower Consumers Shopping Options
The customer, through smart media devices and engagement with the brand, will have the ability to create and control their own
personal shopping experience. They will hold the remote control of their shopping experience; choosing when to shop, where to
shop, how they want the product presented, even designing their own product, all from their Web-TV, smart mobile device or smart
retail store. The brands that understand, anticipate and respond quickly to the customer’s shopping preferences will flourish, while
others will play catch up. With live, multi-media brand access, the customer will have personal control over their shopping
experience, just as he/she has control over the TV viewing experience today. This is the future of retailing; interactive, real-time,
mobile, customer controlled, on-demand retailing with brands providing responsiveness through targeted, personalized marketing.
There is an entire generation maturing now that was brought up with the internet and digital world being a formative part of their
lives. They take “Googling”, socializing and shopping on-line for granted. They are accustomed to the instant gratification offered
through the digital world; shopping, downloading and instant messaging at anytime. They have grown to expect to have their world
structured on their own terms, on-demand. This “wired” group entrusts and relies on the digital world to transparently augment their
daily lives. Society in general is also adapting to new technology at an accelerating pace, re-shaping the retail landscape. Video
stores are quickly disappearing with the shift to movie downloading. Bookstores will continue to evolve from print sellers to social
gathering places with the mass adoption and price reduction of e-readers and personal tablets. Smart phones are readily
accessible, allowing consumers a constant connection to their social contacts and valued retail brands. The imminent web/TV
convergence will allow for seamless web access, strengthening the web as an informative and entertaining marketing channel,
directly in the consumers’ living rooms.
The responsive, innovative retailers will implement a business strategy that embraces the consumers’ freedom of choice and
empowers them with personalized and flexible shopping options.
Customized Shopping
Trend: Consumer Input Into Design & Shopping Configuration
Strategy: Personal & Customizable Shopping Options
The consumers’ increasing capabilities to interact in real-time with retailers through the web, television
or mobile devices will certainly transform the way shopping is transacted. Brand insight of extensive
consumer activity will intuitively recommend relevant product offerings and empower the consumer
with the ability to craft his or her own personalized shopping experience. Technology will enable
virtual, personal stores with products and a shopping format based on previous shopping history,
interests and preferences. Amazon’s “wish lists” and Zappo’s “favorites” will evolve into personal
storefronts, accessible by the specific consumer and invited friends, family and social networks.
Consumers will also have the ability for much more input into the actual design of their product
choices. On select products today, Nike allows the customer the option to customize the design of their
own shoe. On-going advances in consumer behavior analysis and interactive communication flow will
allow personalization capabilities to become a powerful competitive advantage. A strategy that provides
the consumer with targeted choices and customization options will enable the consumer to create a
truly personal shopping experience of their own design.
Deep Customer Insight
Trend: Micro-Targeting Customer Segments
Strategy: Multi-faceted Customer Insight & Analysis
With the increased use of the internet, there is an ever growing database of consumer activity being accumulated.
Advances in marketing intelligence data-mining and purchase behavior modeling will enable the brands to
accurately utilize the cloud data to predict and target a specific customer’s purchase interests. Customer targeting
will become much more intuitive and accurate as segmentation models are enhanced. This process will allow for
efficient costumer contact strategies with relevant and actionable product suggestions targeted to specific
customers. Today, Amazon supplies customized selections and suggestions based on a customer’s prior or similar
purchase history. Enhancing this in the future with improved data base analysis and statistical modeling will allow
for a relevant, targeted product presentation and a personalized shopping experience. The on-demand retail
customer will access their multi-media device of choice and see a customized shopping presentation, targeted
according to their personal shopping preferences and potential interests. The accuracy of the targeting and product
suggestions will determine the customer’s loyalty and propensity to bond with and support the brand. Consumer
privacy rights are a sensitive issue as there are serious personal security implications resulting from misuse of
consumer information. This will be an on-going topic in the future as consumers inundate the web with personal
data, and organizations work to gain access to better understand and target potential customers. To navigate this
sensitive issue, retailers will have to earn the trust and respect of the customers they communicate with. A trusted
relationship will allow the customer the benefits of a highly customized shopping experience while the retailers will
benefit from a depth of rich historical data.
Multi-Channel Digital Retailing
Trend: Various Alternative Shopping Methods
Strategy: Multiple, Interconnected Shopping Channels
The prior decade saw the consumers’ acceptance and migration to web retailing and the
implementation of multi-channel retailing as the dominant growth strategy. Retailers realized the
synergistic marketing and operational benefits of presence in more than one selling channel, along
with new methods to reach consumers. Web presence, email and web search contact strategies
became required business standards. Multi-channel retailing enabled the brands to efficiently engage
the customer across multiple channels; stores, web and print, uniformly driving brand awareness and
purchase motivation. The multi-channel retailing strategy will continue to be the foundation for
consumer retailing over the next decade, however, the channels will evolve to include various forms of
interactive multi-media, distributed through smart devices and digital media. The future multi-media
retailing channels will be merged web/TV, mobile phones, tablets, interactive retail stores, social
media and digital kiosks. These multiple selling channels will be interconnected and allow the
customer a seamless shopping experience across all channels. The leading brands will operate
through a diverse variety of selling channels, while the infrastructure remains transparent to the
customer. A great example of this multi-channel digital strategy today is Crate & Barrel, which has a
robust store, catalog and on-line presence and is also aggressively promoting mobile shopping, social
commerce and location based coupon offers.
Interactive Marketing
Trend: Social and Participatory Connections
Strategy: One–To-One Interactive Marketing
Advances in technology will allow for personalized, one-to-one customer to brand
interactivity. Innovative brands will present a host of entertaining shopping options to
interest and engage the digital consumers. As an extension of the customer customization
strategy, consumers will be able to virtually model different styles of clothing or perhaps
virtually see furniture as it would appear in their own living room. Colors and styles can be
altered on the fly. Smart digital medial will allow all of this interaction to take place anywhere
at anytime. Real-time connections will allow for communication with family or friends to
solicit their instant opinions. Shopping for many is a social event and this remains true
online as social networking virtually supports this. Retailers who maintain a fluid, interactive
dialog with these social consumers will build brand loyalty. Ultimately, this interactive brand
shopping experience is entirely at the consumers’ choosing; transforming shopping into a
truly customer driven, personalized, on-demand initiative
Smart Retail Stores
Trend: Shopping as an Entertainment Experience
Strategy: Interactive Smart Stores
As the bricks and mortar retail stores compete for the consumers’ attention
amongst the variety of digital shopping and entertainment options, they will more
than ever need to become intriguing shopping destinations. Retail stores will
continue to be the physical manifestation of the brand, wired to supply the
information, services and options readily accessible through the web. Retail
stores will become wired “smart-stores” and “retailtainment” centers with multi-
media interactivity and virtual product demonstrations. The Walt Disney
Company is currently remodeling all of its retail stores to include a new, playful,
interactive, customer participatory concept. As is done in the Apple and other
retail stores, mobile checkout and social community gatherings will be part of the
experience.
Confluence of Technological Devices
Trend: Merging of Technology for Simplification and Convenience
Strategy: Maximize TV/Web Convergence
The pace of technological change is increasing exponentially, creating new platforms and opportunities to reach, communicate
and transact with consumers. The leading retailers will invest wisely in new “smart” technology and rigorously pursue innovative
applications to reach the digitally connected customers. The on-demand generation of consumers are impulsive and lack the
patience to shop through the conventional “old world” retail processes. They require real-time, instant communication and the
ability to interact with people and businesses seamlessly. They expect innovative, fun and functional technology to enhance their
lifestyle. The consumers’ online and offline worlds will most likely be managed by two linked multi-media devices; the morphed
web/computer/TV and a personal mobile device. They will organize their daily lives with these two devices, allowing them to
efficiently manage all activities. With this advanced, yet user friendly technological landscape, consumers will be expecting
relevant and personalized service from retailers. The converged Web/Computer/TV, seamlessly linked to the smart personal
mobile device, will be the interactive connection to the digital world. This concept is quickly becoming a reality as the technology
already exists that allows a smart phone to communicate with a computer or television. Consumers are currently shifting viewing
time from the television to the computer, as the quality of web content and downloading options expand and improve. Web
access through the TV will soon become mainstream as the confluence of the TV and the web is imminent. Innovative leaders
such as Google and others are working feverishly to bring these smart devices to the mass market. The morphed TV/Web device
will be the household control center for easily accessing entertainment and information. With the implementation of the Web/TV,
the retailers’ web sites will be one of many viewing options, along with traditional television networks, cable networks and the
easily accessible web based networks. This puts major emphasis on the retailers’ on-going development of their web sites to be
meaningful destinations to communicate with, educate, entertain and convert viewers to loyal customers. The increased use of
video for product demonstrations is a perfect use of the Web/TV platform.
Mobile Shopping
Trend: Wireless Shopping Anywhere
Strategy: Capitalize on Mobile Shopping
Applications Mobile shopping options will empower consumers with additional
freedom and a new set of tools to enlighten their shopping experience.
Consumers’ mobile devices will enable them easy access to all of the pertinent
information necessary to make a comprehensive product evaluation at the point of
purchase. Brands are quickly embracing and developing this new selling channel
with innovative applications that permit easy shopping along with marketing and
promotional messaging capabilities. Location based marketing promotions and the
ability to scan any item for detailed product data and competitive comparisons are
also quickly being adapted by consumers. Mobile access to social networks and
review services such as Yelp, allow for real-time insight and advice, making mobile
shopping a fun and functional shopping experience.
Express Supply Chain
Trend: Speed & Options of Product Delivery
Strategy: Expedite the Supply Chain Process
Another critical, but less glamorous component of future retailing success will be the implementation of
increasingly faster and responsive supply chains. This segment of the industry will have to step-up and challenge
the accepted status quo. The leading companies that want to meet the needs of the real-time, instant access,
impatient customer will recognize this opportunity and invest accordingly. An express supply chain is all about
speed, simplicity and efficiency to design, produce and deliver product to the customer. Product development
schedules and production lead times must be reduced through initiatives such as domestic sourcing, flex
production and expedited delivery. Same day or overnight delivery systems will be re- engineered to become cost
favorable, satisfying the real-time customer’s expectations and putting further pressure on the practicality of the
brick/mortar store model. Today, the retailer Zara in Europe has engineered a supply chain that can design,
produce and deliver a fashion product in thirty days. Another innovative enhancement to the supply chain is Sears’
alternative delivery and pickup options currently being offered to customers. In some markets today Sears offers
the customer the option to buy online and pickup in-store and they are also testing convenient drive-through online
order pick up locations. Think of the possibilities when real-time selling data and instant customer feedback can be
used to indentify emerging trends. New or hot selling products can be quickly developed and delivered, optimizing
sales opportunities. On select products today, Nike allows the customer the option to customize the shoe design
and have it delivered within a reasonable time. Customer feedback or opinion pools can be utilized to guide
product development. This type of customer influenced design will become much more prevalent in the future as
technology, production and supply chain advances make this feasible.
Responsive Organization
Trend: Increasing Pace of Technological and Societal Change
Strategy: Speed In All Organizational Aspects
The on-demand customer is utilizing technology to help them organize and
improve the quality of their busy lives. They connect to the digital world to access
pertinent, real-time information, and they expect an instant response to their
requests. They will build loyal and trusted relationships with the services and
retailers that provide them with the fastest response of accurate, entertaining and
relevant information. To succeed in the fast paced, ever changing, on-demand
retail world, an organization must promote a forward thinking, fast moving,
responsive culture across all functions. This is a cohesive operating strategy that
is focused on maximizing the connection, understanding, communication and
delivery to the on-demand customer. Speed of process, data interpretation and
innovation will be required to enable the retailer to evolve along with the customer.
Bonus! #11 It’s All About the Product
Trend: Consumers’ Desire For Lifestyle Enhancing Products
Strategy: Focus on Innovative & Functional Products
Ultimately, an organization exists to deliver highly desired
products or services to the consumer. All other organizational
efforts are designed to support this task. This remains true
whether the product is marketed at a flea market or through a
mobile device on a tropical island. Successful organizations must
first have great products that motivate the desire of the customer.
Without that, none of the above strategies will be enough to
propel an organization to on-going excellence.
Winning In the Future Retail World
The future of retailing is interactive, virtual, intuitive, customized and on-
demand. Although the pace of technological change sometimes seems
intimidating, the brands that develop a responsive organization which
respects, understands and engages the on-demand customer will
progress and succeed in the future digital retailing world. This
comprehensive organizational strategy requires integration of the latest
“smart” technology, advanced intuitive customer insight, stimulating
interactive marketing, a cohesive multi-channel marketing network and
an accelerated supply chain to bond with the demanding and selective
customer. The customer will have more choice, control and power than
ever before. The organizations that create an authentic, personal,
interactive and responsive connection with them will flourish.