How people will shop in 10 years: will brick&mortar retail still exist, will traditional UX be replaced by chatbots, what happens with mobile payments? These are only several questions that retail professionals would like to know.

We don’t have a crystal ball and can only guess about the future, but educated guesses is better than nothing. Guys from Ovum did pretty good job there and issued a report called “The Future of E-commerce: The Road to 2026.” In this post we will share the most interesting prediction from this report.

Consumer of the future

• Instant gratification will be more than quick fix (convenience and good price). In 10 years these 2 things will be a norm and more sophisticated customers will look beyond that: seamless shopping experience anywhere, from any device and any time with free or cheap delivery and pro-active customer service
• Shopping as an experience. Shopping is already a leisure activity in real world for many people and this will expand to online world, where consumers will be provided with highly interactive, engaging shopping experience. Digital and real world boundaries will be blurred with such technologies as Augmented Reality (AR)
• Pretzel shaped consumer journey. The traditional, linear shopping journey is already disintegrating and this trend will continue, so that concept will be obsolete in 2026. Retailers have to be prepared and provide consumers with consistent experience across multiple touch points: from Smart TV advertisement to in-store
• Sharing economy is here to stay. It will have mixed impact to retailers, the sectors at risks are those that trade high-ticket, non-personal and infrequent use items. Other sectors may actually benefit from sharing economy if approach it smartly and address consumers’ concerns such as negative impact to environment

Pure play, brick&mortar and delivery

• Online retailers will continue to move into real world via pop-up shops, roadshows and collection&showcase stores
• Click&Collect will grow, for UK the prediction is 78 percent up by 2020

• Manufacturers will move into retail, primarily through online
• Need in large retail spaces, especially in less desirable locations will decrease
• With the expectations of fast and cheap if not free delivery set by trailblazers like Amazon, the cost of fulfilment will be a challenge even for large players
• Drone and drive-less car delivery unlikely to get a big scale in 2016 due to safety and security issues

Mobile

• With more powerful smartphones and more mobile friendly online stores mobile will more often support whole shopping journey
• Android will be a dominant mobile platform with 10x more devices than Apple

• Hyperlocal commerce with devices like beacons will be a good opportunity for retailers, but should be taken with great care to not ruin customers trust
• Mobile payment will raise from $51B to almost $700B in 2019, but mostly in remote payments

• Loyalty and reward program will move to mobile

Key technologies

• Predictive analytics and artificial intelligence will provide customers with context relevant curated shopping experience
• Digital Assistants/Chatbots use will be wide-spread, but not totally replace more conventional user interface due to agency problem (need of control), especially for cases of selection of products with high involvement level
• Centralised consumer privacy control platforms that let people to manage easier what information to share with what provider is likely to become a reality
• Hyperconnectivity – Internet of Things (IoT) and Machine to Machine (M2M) communications will be everyday reality, with over 660 million M2M connections expected by 2020. It drives subscription-based retail model like when washing machines will order new detergent
• Wearable will be more widespread but mainly remain complimentary to smartphone devices
• 3D printing is unlikely to be a big threat to retail due to limited scope where it can be used with competitive cost

References

You can get full report at Criteo website