The “Predictions” game is a tricky one. Who can really predict what’s going to happen in a scenario as rich and diversified as that of Retail and E-commerce? Nobody, at the time, predicted the advent of Amazon and still today nobody is capable of anticipating the surprises that Bezos has in store. Just a few months ago everyone thought that Amazon’s logistical dominance was a thing of the future; today we wonder at the fact that it’s already able to serve 50% of their American orders; make FedEx tremble by halting its ground contract and keep UPS (of whom Amazon is the number one client) on a short leash.
If there’s someone out there who can make serious predictions that’s Natalie Berg, one of Europe’s finest Retail connoisseurs and one of the few voices we feel we can always trust.
In her new whitepaper: “Welcome to the 2020’s. Retail Predictions for the Next Decade”, Berg lists some important incoming trends. Let’s take a look at them, one by one, and share some of our thoughts.
1) Peak Amazon. It’s transactional, not emotional, loyalty that Amazon generates with its shopper and that will ultimately be its downfall.
According to Natalie the next decade will see Amazon getting to its maximum power and then start to recede. As of today, it’s not easy to agree with her, even with some symptoms already showing: governments moving against counterfeit goods, ongoing investigations and tax regulations. Amazon, though, is not only an e-commerce, it’s also a Web Service, a broadcaster, a music platform, etc. Prime memberships seemed to have peaked in early 2019 and then they leaped to 150 million. In a few years Amazon will become a major courier. So: we agree that the peak must come, because there’s no such thing in the world as a limitless growth, but we think it’ll be probably be followed by a long stabilization and exploration phase, more a mutation than becoming “from disruptor to disrupted”, as Natalie writes.
2) Digital Detox. Over the next decade, expect more retailers to invest in experiences that enable customers suffering from screen fatigue to unplug from their devices, to slow down and enjoy the moment.
This is becoming an anthropological need, so pretty much inevitable. To go back to the previous point, we might speculate that when the digital binge will turn into an indigestion Amazon might already be there, waiting for us with some “physical” magic trick. Symptoms of digital fatigue are already in place: Facebook’s profits and growth dropped, fake news nausea is spreading and choice paralysis, imposed by too much offer, is widespread (and here Amazon shows its weakest side). Giambattista Vico, three hundred and fifty years ago, spoke of a cyclical human history: this also applies to some habits related to technology. We will not always order so many meals at home and we will not always be relegated to virtual squares. Or at least we allow ourselves to hope for it …
3) The Era of Participation. In order to find their tribe, retailers need to be bold about who they are and what they stand for.
This has already started and the Brands who think they can appease everyone are paying for it. Those who focus on a “tribe” (as Berg writes) and try to involve it though every possible means, will prosper. Involve, not Exploit.
4) Mindless to Mindful Consumption. Consumption is becoming a dirty word as the ‘Greta Thunberg effect’ hits retail.
This is a necessity more than a trend. Millions of objects sent to waste, returns out of control, materials of questionable quality and origin, manufacturing-pollution. People are less foolish than those who govern them or who would like to exploit them and those brands who are more attentive to sustainability will make the competition eat the dust.
5) Experiential E-commerce. Going forward, social media platforms, Instagram especially, are well positioned to bridge the gap as they become more commerce minded. And forget chatbots; expect more retailers to embrace technology like the Hero app or even WhatsApp that connects online customers with real humans in-store, marrying the best of both physical and digital worlds.
Easier said than done. If confidence in social networks drops, the opportunity to use them as a gateway to e-commerce retail will also drop. There are also significant physical and technological limitations to what can be offered online, see the temporary AR and VR flop. We’ll see …
6) Death of the Salesperson. The store of the future will be a place to eat, play, work, discover, learn and rent. So, if the role of the store is no longer purely about selling, isn’t it time we ditch the phrase ‘sales associate’?
How can we disagree? This should not be done tomorrow, it had to be done yesterday.
7) Battle for in-Home. In the future, retailers won’t just deliver groceries to your fridge, but perhaps cook you a meal once there. The possibilities are endless – personal styling, health assessments, collecting online returns.
The house is a border that many are trying to cross. But a border it remains and, in this age of walls, paranoia and overbearing anti-globalism, in our opinion this barrier is unlikely to be significantly breached.
8) Fulfilment as a Loyalty Driver. But ever faster delivery is unsustainable in both financial and environmental senses, and there is an opportunity for retailers to incentivise shoppers to opt for slower, more economical fulfilment options.
Personalization of delivery and returns are the new battleground. Obviously, this being our job, we agree with Natalie!