What’s in Store for Retail in 2020?
In 2020, retailers will look to embrace new partners/channels, the Internet of Things and other critical technologies, as the industry continues to get the sharp end of the digital-disruption stick.
Here are my predictions for 2020:
- Open Relationships
Winning retailers will build ecosystems by accelerating the use of value-adding partners, seeking those who can supplement their product with a unique service – and adding new channels through which to sell their products. As Gartner said, these ecosystems create “connections between partners, employees and even competitors… built into vibrant networks that can unlock value for all.”
- Support Networks
Retailers will use IoT to innovate and differentiate but also realize that their IoT projects need to be connected. By connecting IoT initiatives together they will benefit from the “network effect” that transforms individual silos, projects and initiatives to enable new insights and innovation. This can then support and automate decision-making to provide a relevant and timely response.
McKinsey believes that applying the likes of IoT technology to a store environment can double store profitability. Retailers will need to start – and connect – IoT projects quickly for fast ROI.
- Sitting at the Top Table
Technology will sit at the top table organization-wise in the New Year, after years of underestimating the importance of IT in enabling new digital business models. Technology leadership will start to bring innovation to the rest of the business, as visionary CIOs contribute new ideas. Retailers will need a flexible IT architecture and approach to support this.
- Eco-warriors
Environmental responsibility will become a differentiator for retailers. An increased focus on the environment informs consumer choices and retailers will respond accordingly. Amazon has ordered an electric fleet of vehicles in response to concerns over its supply chain’s carbon footprint. We have seen retailers discontinue plastic cotton wool buds and plastic straws due to concerns about littering the ocean.
Smart retailers will see technology as tool to help. This could be IoT and real-time AI response to supply chain issues, improving data visibility that drives decisions or using process mining to understand and eliminate delays that have an adverse environmental impact.
- Blurred Lines
The blurring of industry lines will continue as consumer goods companies seek to avoid using the traditional retailer. The “direct to consumer” business model focuses on delighting its customers without any intermediary involved. Think Dollar Shave Club (since acquired by Unilever) offering razors direct to the customer for as little as $1.00 per month. Even Lego are considering offering a rental service for its toy bricks.
Although technology shock-waves continue to disrupt the retail industry, we see retailers fighting back in 2020 – and there are business models out there we have not even begun to imagine. What’s yours?
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