The retail landscape is changing radically, according to consultant Bain & Co., with the result that traditional ways of doing business will be eclipsed by technology and more expansive business strategies.
In the report, The Future of Retail: Six Disruptions That Could Shape the Next Decade, Bain spelled out a number of developments that it believes will drive change in retail. Success could depend on how quickly companies recognize and respond to critical trends in the marketplace, the consultancy pointed out.
Bain stated that retailers should pay particular attention to:
- Algorithms and Robots. Companies will automate core retail functions such as pricing, promotions and merchandising, commoditizing retail capabilities that have traditionally offered a competitive edge.
- AI Shopping Agent Impacts. Shoppers handing over decision-making to brand-agnostic AI tools will upset loyalty models and digital marketing strategies.
- Personal and Contextual Value Determinations. Data collection that can paint the full picture of a consumer’s behavior and strategies that can be applied will help retailers meet consumer needs during shopping decisions and boost the odds of successful interactions.
- Retailers as Consumer Packaged Goods Companies. Private label growth could further blur the lines between retailer and supplier.
- Rebalancing the Role of Stores. Store operations will evolve to reflect changes in consumer behavior, with consideration given to alternative space uses such as franchising or leasing to third-party traders.
- Scaling Up Across Borders. Local scale can’t keep up with consumer expectations and industry competitive pressures, which will make cross-border mergers and acquisitions and virtual alliances more critical.
