Yesterday Amazon celebrated its 20th anniversary. As well as being yet another indicator of how quickly time passes, the anniversary provides an opportunity to reflect on how far the retail industry has come over the past two decades and how far it can still travel.
Amazon’s success has to a large extent been born of data. It has, for example, used customer data not only to make the retail experience simpler, but also to personalise it. The idea that an online shop would recommend new purchases based on past choices was truly revolutionary and an early indicator of the promise of big data analytics.
Over the next 20 years online shopping is going to evolve further and will eventually completely overwhelm the retail space – to the extent that the traditional bricks and mortar based retailer will have to innovate significantly to remain relevant.
Technology will strengthen customer experience
Indeed, it is possible that many shops will become little more than showrooms for products that can only be bought online. Consumers will also leverage data more – to identify where they can obtain goods at the lowest price with the best customer experience. The most successful retailers meanwhile will continue to use technology as an enabler to strengthen and deepen relationships with customers. Customer loyalty will be achieved (both in terms of attraction and retention) by improving the customer experience. Technology will be the key enabler here to ensure that customers will be provided with the best and same customer experience through every touch point.
The impact of data analytics on the online world will continue to be huge. Today online retailers can, if we ask them to, remind us of birthdays and anniversaries. In the future, not only will we be reminded of imminent birthdays but predicative analytics will be able to choose the perfect gift and even write the card for us. No more missed celebrations, and no more gifts destined for the bin.
Making mobile work harder
If the future of retail is predictive, it is also mobile. All online businesses will in the future be built from the mobile device up. Improvements in smartphone software will mean that the ‘Siri’ of the future will be even more impressive. Drawing on vast data lakes, our digital avatars will become shopping assistants, recommending new retail experiences based on our individual tastes and habits. Consumers will be able to set these retail avatars according to taste. Some consumers will abdicate responsibility for all shopping tasks to these digital assistants, safe in the knowledge that the choices the technology makes on their behalf will be as good or better than the ones they would make for themselves.
Interestingly, this digital shift will also see a decline in impulse buying. Big data, mobilisation and social media combine to mean that find exactly what we want, when we want and where it is cheapest. The days of browsing through stores and stumbling across goods may well be coming to an end, a trend that will impact on the ways in which brands market their products in the field.
Delivering to the customers’ needs
Finally, there is every reason to believe that the way in which goods are delivered is set to change. Social network delivery services are going to disrupt the industry, allowing users to order delivery-on-demand. This will impact the way in which users can receive deliveries. For example, it will be possible for shoppers to have drivers wait while they try on the clothes they have ordered, and then return unwanted goods by the same courier. The whole experience will be much more focused on meeting the customer’s needs rather than those of the delivery company or retailer.
The possibilities digital transformation promises retailers and customers alike are endless, and over the next twenty years the options made available to consumers will increase exponentially. New Amazons will emerge with business models that we can scarcely imagine today. One thing is for certain however – it’s going to be a very interesting couple of decades.