On stage at Shoptalk 2019, Shoptalk Founder and then CEO Anil Aggarwal remarked that it is human nature to overestimate the change that should happen in the short term and underestimate the change that will happen in the long run. term, say over 10 years or more.
And this article is all about the risks associated with the latter.
Make no mistake, the pandemic arrived in 2020 like a bat from hell, bringing with it a wave of ongoing and much needed innovations in nearly every industry and especially in retail. The pace of technological innovation, as has been said ad nauseam, has likely increased by three to five years in 2020 alone.
Ideas that were once fun to talk about at parties – things like curbside pickup, Instacart deliveries, and social commerce – have suddenly become a staple of survival for almost any retailer in some form or form. fashion.
But, it was also the easy stuff.
As the pace of innovation accelerated under COVID-19, tea leaves were all present on these innovations before the outbreak began. Smart retailers, like Amazon
All of this begs the question, coming back to Aggarwal’s point above, if these trends have been missed by so many people, then what trends are still looming in 10 years that retailers may soon miss again?
The following is a list of potential blind spots on the horizon, and while some of them may look weird and out there, remember that it is also human nature to overestimate how far away they are. could actually be.
Trend # 1 – Disintermediation of delivery speed
The arrival of many newbie delivery companies, companies like Buyk, GoPuff and Gorillas, all promising delivery in 30 minutes or less, is a harbinger of a very important point – that the speed of delivery is important.
Amazon holds the majority of American consumer opinion for fast and reliable delivery, but even Amazon hasn’t gone as far as Gorillas, which promises delivery in 10 minutes or less.
And, more importantly, even though Amazon is number one in terms of mind sharing, who is number two?
Nobody, at least not at the moment anyway.
But this is the territory everyone from Instacart to DoorDash to the companies mentioned above is trying to claim.
The approach to the problem is twofold: 1) building the hardware infrastructure as a retailer to occupy this space (the GoPuff approach, for example) or 2) trying to claim it by becoming a marketplace specializing in “get – it-quick delivery “through an assortment of various lightweight crowdsourcing or” gig “options (ie the DoorDash and Instacart approach).
The first path is a difficult and much more dangerous way to get to the top, while the second path is a short walk from your garden variety retailers – your Bed Bath
The day is coming when Amazon and “another” will emerge to stand on top of the mountain of fast delivery. The only question remaining is how quickly the retailers of yesteryear will allow tomorrow to happen, while the hard infrastructure types die trying on the backs of billions of dollars in venture capital funding.
Because the cost of being option number two is just huge.
Trend # 2 – Cashless Stores
The most egregious example of something that will drastically disrupt retailing over the next 10 years is Amazon Go.
Powered by artificial intelligence computer vision (or AICV for short), Amazon Go allows consumers to walk into a store, grab whatever they want off the shelf and “walk out” and pay. the same way you pay for an Uber.
The experience is awesome. This means no longer waiting in line. . . already.
Amazon launched its Amazon Go concept in 2018. The first store was approximately 3,000 square feet. Two years later he expanded the concept to around 10,000 square feet, and then in 2021 he opened a full 20,000 square foot experience plus a grocery store, called Amazon Fresh.
During the same period, none of the big players – not Target, Walmart, or Kroger – even launched a public experiment with the technology. Whether it’s pride or outright neglect, this lack of activity is downright laughable.
Because a day will soon come (my prediction = 5 years or less) when Amazon will discover technology in all product categories, and when it does, retailing in the United States will never be the same again.
Trend # 3 – Real-time in-store pricing and promotions
When it comes to in-store pricing, most retailers are like Stonehenge.
Week after week, they print hundreds, if not thousands of physical signs for various promotions and allocate payroll weeks in advance to put those signs on the shelves, only to find a few minutes later that they have already been obsolete by aggressive prices online or, worse, just completely fallen off the shelves because little Timmy came over and knocked them all over while shopping for groceries with his mom.
If the above Amazon Go rant hasn’t scared the pants off the grocery industry, this last point certainly should be.
Amazon Fresh’s “Just Walk Out” technology is cool, but what’s even cooler in the long run is Amazon’s use of electronic labels in its Amazon Fresh stores, because that means Amazon doesn’t Never need to schedule another print job, another hour of work, or again choose another inscription on the floor.
No, instead, Amazon can price products in its grocery stores in real time, at any time, from a centralized location, which means a lot of bad news for the grocery industry in terms of pricing. promotions.
This means the world will soon see online flash sales meet in-store grocery shopping, as ideas like strategic promotions on the 1st and 15th of the month, just as people get their paychecks, with very little advance warning, could one day become a reality.
And any grocer still showing physical signs will be powerless to stop it.
Trend # 4 – Pickup Warehouse Clubs Only
This trend is a fun little thought-provoking exercise. Ask yourself: what is Costco?
Well, basically this is a large bulk warehouse that asks consumers to act as warehouse preparers and last mile delivery drivers. The only difference between this and a god-honest warehouse is the unnecessary presence, as mentioned above, of a cashier at the end of the experiment.
So imagine, imagine that instead of consumers picking up in a large warehouse / store, automation replaced humans and robots who picked and packed customer orders while they were shopping online , and all customers would have to do is swing their cars through a few lanes designed for pickup, like a Taco Bell or McDonalds
The seeds of this idea are already with us too.
Last year, Target announced the creation of what it calls “sorting centers”, i.e. mini-warehouses that are closer to consumers and which are also equipped with passageways for drivers. – third-party Shipt deliverers.
Therefore, it’s not really a logical leap from the idea of a sorting center to ask: what if customers could also come by car and pick up from these locations? Especially if they are willing to buy in bulk?
In fact, “skipping” is probably not even the right word. Something like a “baby step” seems much more appropriate. And even that can still be too small a benchmark.
Trend # 5 – Asset-Lite Influencer Distribution
Finally, when we get our hands on many of the trends just mentioned, a final concept also begins to emerge, and that is the arrival of physical retail based on asset-lite based on influencers.
For decades, if not centuries, merchants have ruled the roost in retail businesses.
But now? Who needs them?
The influencer has taken on the role of authority on what people can and should buy. Which begs the question: why not buy directly from the influencer?
In the online world, it’s easy to see how this is emerging. Live streaming, Instagram shopping, etc. all bring this to life, but in the physical world, creating a direct connection like this between the famous influencer and his fans almost always required some type of retail partnership, as the investment costs associated with opening physical stores is too difficult to undertake alone.
With the advent of contactless scan-and-go shopping, physical stores will begin to function as a store on Instagram, only the product is still visible in person but shipped to the consumer at a location of their choice.
It’s not unlike the glimpse Amazon gave this world with its 2018 GH Lab experience with Good Housekeeping at the Mall of America. See the video below:
There, one of them pulled out his cell phone, scanned a barcode to buy anything he liked, and was immediately transferred to the Amazon app to coordinate delivery.
This example is important because it breaks down our conception of what and who is a retailer and because it shows that from whom people actually buy is much less important than from who they think they buy (i.e. the storefront).
Or put another way, this is one of the reasons that Toys R Us is no longer the authority on toys in America, as that title now belongs to a kid named Ryan who unboxes toys up to $ 30. million dollars a year on YouTube.
And with just a few well-placed mentors to guide him along the way and the right tech behind his back, meaning Ryan couldn’t build his own toy empire, the same way GH Lab did, one new light-capital store at a time.
The future is coming. Underestimating or overestimating it is the choice of every retailer.
But, then again, no one has ever gone bankrupt because they were too prepared for the future.