Are the days of going to a brick-and-mortar store to peruse the merchandise and shop behind us? Online shopping has definitely eclipsed shopping in store, as U.S. e-commerce sales grew 16% in 2017. But stores that adapt are still seeing success. Will that still be the case in 10 to 20 years? Will we move away completely from retail stores and shop entirely online?
Will there be a physical store in the future or not? Here are two scenarios:
Scenario One – Physical Retail Stores Will Die
Technology will undoubtedly play a major role in the future of retail. With the help of AI and big data, retail could become much more anticipatory. Brands could know our exact needs, sizes and preferences and automatically provide the products we need. If we need a pair of jeans or a new couch, algorithms could find exactly what we need and provide us with the right product or at least narrow it down to a few options. There won’t be a need to shop in a physical store because all of our needs will be predicted before we shop.
AR and VR could also make it possible to see items in our homes and on our bodies from the comfort of our living room. That means that instead of having to go to the store to try on clothing or shop around for the best item, we could preview items virtually and then make the purchase from home. We’re already starting to see this technology. Some stores use AR to show customers what furniture would look like in their homes or use VR headsets to virtually transport a customer to a dressing room. That technology will continue to grow and could lead to all of us happily shopping virtually.
New technology and more e-commerce options also opens the doors to lower prices. Without having to support a brick-and-mortar store and more employees, many online stores can take out the middle man and offer much lower prices. In the next 10 to 20 years, this will likely continue to grow and create a larger gap between in-store and online prices. It could come to the point where shoppers move away entirely from the in-store shopping experience for less expensive and more convenient items.
Scenario Two – Physical Retail Stores Will Survive
However, even with new technology, it’s very possible that retail stores will survive. There’s something to say for the need to physically touch items and try them on before you make a purchase. However, it’s very possible that larger big-box stores will migrate online and smaller, niche stores will dominate the physical retail space. Retail stores that survive could possibly move towards a more experiential approach. Instead of endless aisles of products, these stores are more like showrooms that allow customers to touch and feel the products and then have them delivered to their homes straight from a warehouse. These stores have less inventory but can still meet the needs of customers. We’re already seeing these types of experiential stores pop up. Brands like Vans, Ikea and Apple have been building experiential stores for years with great success. That trend will likely continue to grow.
There’s also the social aspect of shopping to consider. People crave human interaction, and as the world becomes more digital, sometimes that reaction comes from talking with a sales associate in the store. Shopping is a social experience, and nothing can re-create wandering through a store with friends. No amount of technology can ever replace human touch and interaction. An algorithm could choose the perfect dress, but it won’t be able to listen to a customer share her excitement about the special event she is shopping for.
Retail stores could also follow the cyclical trend found in many other industries. Brick-and-mortar stores are currently in decline. If that continues and more storefronts are empty, it could be disastrous for commercial real estate. As stores move online, the e-commerce world could become increasingly competitive, which would drive more stores back to the physical space to take advantage of cheap real estate. The cycle could take 10 to 20 years to unfold, but it is a definite possibility.
Perhaps the most likely scenario is a blend of these two ideas—more integration between the physical retail and e-commerce spaces. Technology will play a new role and allow customers to see and try items before they make a purchase. Basic needs could be met with subscriptions and automatic refills, and the rest of the leisure shopping could be done in an updated retail store.
Customer experience will definitely transition in the uncertain future of retail. No matter if we’re shopping in showrooms or picking out items virtually from home, the experience will always make a difference.