The future of retail is clear: It’s digital, and it’s personal. In 2020, eMarketer anticipates worldwide e-commerce sales to hit $3.914 trillion—and that number will only continue to grow as brick-and-mortar makes the switch to digital first. Plus, the majority of U.S. adults want personalization from retailers.
As for pandemic-level personalization, augmented reality (AR) takes it to the next level. When COVID-19 shuttered physical stores across the world, what was once a cool add-on became necessary for many retailers. AR allows for “try-before-you-buy” type conveniences, allowing for consumers to virtually “try on” outfits, accessories and makeup. Many big brands have seen increased sales—some by as much as 80%—by offering AR and virtual reality (VR) options to customers.
Increased personalization is big among younger consumers, as well, so a digital adoption strategy is inevitable for retailers everywhere. By the end of 2020, it’s projected Generation Z will make up 40% of the consumer base in the U.S. alone, and the Gen Z consumer base lives digital-physical lives. Every purchase includes a personal, digital touchpoint—whether that’s through social media, store research or how they make a final purchase.
Doug Stephens, a futurist, author, and self-proclaimed “Retail Prophet,” projected that, by 2033, most of our day-to-day purchases will take place digitally. In an interview with Retail Dive, Stephens said we’re nearing what he calls a “Replenishment Economy,” where items like “automobiles, jewelry, real estate, perishable food items, pharmaceuticals, home furnishings, luxury items and home improvement products” will “represent the next frontier of online commerce.”
With digital-first in mind, remember: Brick-and-mortar isn’t going anywhere. One way smaller retail operations can prepare for the tech to come is to take inspiration from the hospitality industry. Many brick-and-mortar businesses, like gyms and salons, already use reservation systems for better control over occupancy—and, ultimately, the customer experience. Retail stores can do the same thing.
In any case, bridging the gap between physical and digital will be any retailer’s best bet to capture a value-driven audience. Bacon says that the experience should always be the driver of the tech. “There’s some really cool stuff out there, but if you don’t know the lasting impression you want your customers to leave with, you can never know what technologies you should use to enable those experiences.” And that’s the most futuristic mindset you can have.