Retail fashion thought leader and Authority Magazine contributor Aaron Weiner recently had the pleasure of interviewing Foko Retail CEO Marc Gingras about his rise from serial entrepreneur to retail technology leader, his thoughts on the current state of retail, and the future of retail over the next five years.
Look below to find an abridged portion of their illuminating conversation, and if you’d like to read the whole interview, click here.
The Future of Retail Over The Next Five Years
Retail is evolving at a rapid rate, as evidenced by the spate of store closings currently sweeping across the US and the rest of the world.
The Secret to Amazon’s Future Success
Amazon gets the majority of the blame: they’ve become a ubiquitous one-stop shop, doing away with the need for many traditional retailers. But returning items will always be a pain when it comes to e-commerce, meaning Amazon will never truly be able to compete with retailers working with the try-before-you-buy business model.
Convenience is key to Amazon’s future success. Expect even more offerings from their Amazon Basics line (the company’s generic house brand), Amazon Prime (I have a friend who buys everyday items like batteries and groceries through them, even though he lives next door to a convenience store, thanks to their two-day shipping), and Whole Foods (who already offer click-and-collect and, soon, curbside pick up).
How Smaller Retailers Can Compete
Realistically, only a few big-box retailers will be able to compete (i.e., Walmart and Target), so other companies will inevitably go the opposite route, offering increasingly personalized shopping experiences and endlessly customizable products.
Some big brands — predominantly in the world of footwear, like Nike and Adidas — are already doing it. But so are startups, like Indochino (the made-to-measure menswear store, who plan to open eight new showrooms by the end of 2018) and Revols (who make custom-fit wireless earphones).
So expect one-size-fits-all to only apply to the off-the-rack essentials, and everything else to become more customized and personalized as retailers vie for the attention of increasingly particular shoppers. (According to a recent survey by Segment, 44% of consumers said they’d return to a store after a personalized shopping experience.)
That’s Where Predictive Analytics Comes In
A lot of retailers are already data mining — either in-store, based on previous transactions, or through visits online — but they may not know how to leverage it properly to create optimal business growth. But with predictive analytics, retailers can get a clearer picture of their consumers by analyzing their data, and using those insights to improve everything from direct marketing campaigns (through social media, e-newsletters, and online advertisements), to inventory forecasting (based on the proximity of shoppers to a given location and previous buying patterns).
Bigger Isn’t Always Better
And speaking of stock, America has too much of it. (According to McKinsey & Company, the retail space per capita in the U.S. is 15 to 20 times that of other major markets around the world.) Developed countries are overstored, to say the least, leading to dwindling brick-and-mortar sales and decreased customer traffic.
To combat that, retailers will increasingly reduce their footprint in the future to keep costs down by cutting the number of products readily available, and the square footage needed to house them. Stores will look more like showrooms (as is the case with Story, a concept shop with a rotating collection, that was recently purchased by Macy’s) with more refined offerings (Target and IKEA’s small-scale urban expansions come to mind). And big-box locations on the fringes of society will look more like inventory hubs, offering suburban consumers click-and-collect options, and operating as a warehouse by connecting with other stores to keep transportation costs down from store-to-store.
The In-Store Experience Is Everything
Lastly, expect retailers to give customers a better in-store experience through retail execution that merges art and science.
The days of hunches driving product creation, displays and promotions are over. So is omnichannel, come to think of it.
Customers are everywhere, whether they’re shopping online while at work, or browsing through a physical store, and checking out product reviews on mobile, at the same time. To deliver a truly seamless shopping experience, retailers will focus on the whole package rather than distinct wholes, making stores as brand consistent as their digital marketing endeavors, and crafting experiences customers can’t find anywhere else (either through limited-runs of products, or pop-ups, events, etc.) to stand out from the competition.
Retail is finally catching up to the digital age, making data-informed decisions, customized products, and personalized experiences that feel well-curated and incredibly specific. Not every retailer is going to survive the next five years, but at least those that do won’t be redundant.