Shopping in 2020

3 years ago by in Research, The Fashion Retailscape

The year 2020 is the new 2000. When we drew back the curtains on 1 January 2000, we discovered the world had changed completely. For hundreds of years we had speculated about what 2000 would look like, as a projection of all of the possibilities that the advancement and, specifically, the technology would bring us. And finally we were able to see with our own eyes all of the future scenarios around us. On 1 January 2020 our world will once again look different, even if it is just the way in which we shop (Shopping2020, 2013).

The proximity of 2020 means that the predictions have a more realistic character compared to the science fiction associated with 2000. A number of those predictions are extrapolations of current developments that will almost certainly unfold over the coming years, in other words trends. Demographic developments are an example of this: an increase in the population of the Netherlands (17.1 million by 2020), the number of people over 50 that will be larger than the number of 20 to 49 year olds and the increase in the number of single person households (GfK, 2013). Although these are general trends they do have direct consequences for the retail sector: older people have specific wishes with regard to the delivery of goods ordered online and because of the increase in single person households the home delivery of goods ordered will become a bigger problem (Schut et al., 2014).

Over the coming years, economic developments shall also occur within a limited bandwidth. Expectations are that there will be virtually no growth in consumer expenditure (Wolters, 2013; Erich, 2014), spending power will stagnate or drop, more international players will join the market, and the retail offering in the periphery will grow leaner (GfK, 2013). This not only means that consumers will primarily base their choices on price and that they will mainly be interested in new services that can save them money (DigitasLBi, 2014), but that investments in the retail sector shall decline or only be made by the major players in the market. And major players or retail chains behave differently in the market compared to small independents, with all of the consequences that entails for the development of retail as a sector. And that is before we consider the increasing number of empty retail premises, which is expected to increase from 6.3% to 10% by 2020 (Shopping2020, 2013).

In the predictions there are major uncertainties about the role of ecological developments (the role of sustainability, ‘green’ policies) and political developments (including privacy legislation, rental legislation for retail premises and opening hours policy). However, technology remains the best subject for the party game to colour in the situation in the (near) future. Technology and what that will bring us plays a recurring and leading role in all kinds of speculation about retail developments (Hofste & Teeuw, 2012; GfK, 2013; Shopping2020, 2013; PWC, 2014; Shopping2020, 2014). The current star players are big data, 3D printing and wearables (Google Glass, Apple Watch):

  • Big data is the analysis of linked databases in order to provide new insights. The integration of (real-time) structured data (for example payment transaction data) and unstructured data (for example social media sentiment about a brand) represents the Walhalla of being able to understand patterns in the customer journey, the ability to identify trends and new target groups and for building up a profile for each customer so that the range of products on offer and the prices can be varied in real time.
  • The 3D printing trend is seen as the future disruption to the production chain because customers can print (parts of) a product themselves without the intervention of a manufacturer or supplier, apart from the 3D model design. The phase in 3D printing of gadgets and miniatures is slowly being exited and ‘normal’ products are increasingly forming part of what is available: at Shapeways.com it is possible to order a 3D printed bikini. For fashion retail, it appears that the development of 3D scanning is a trend that is just as important. Because measurements are different in each country and for each brand it is often difficult for the consumer to find properly fitting clothes without actually trying them on, and all of the consequences that entails (such as returns for online orders). A 3D scanner performs a 360-degree scan of a person’s body, on the basis of which advice is provided about the sizes of the different brands to be chosen (for example, see http://www.me-ality.com).
  • Much is expected of wearables (Shopping2020, 2014). There is a great deal of press interest in Google Glass for example, and an increasing number of major names such as Samsung and Apple are, for example, focussing on iWatches. Although these examples are the most high profile, wearables also include sensors in shoes and clothing. Those sensors can be used to provide more information about an article of clothing when held up in front of an (interactive) mirror in the store or they can be given a health-monitoring function – from step counters in trainers to sensors in clothing that measure heart rate, blood sugar and emotions. It remains to be seen which of these will be truly useful, for example the vibrating ‘HAPIfork’ that uses Bluetooth to monitor whether you are eating healthily by recording how quickly you eat (see http://www.hapi.com/products-hapifork.asp). And all of that for just 100 dollars.

All three developments are already underway, and that means this future is already here, however hesitantly that may be in some cases. The real question is whether they will survive the hype cycle and, subsequently, how and when they manage to acquire a structural place in the behaviour of organisations and consumers.

In addition to these three current developments, we also encounter a number of familiar faces in the predictions about important technological developments. One example is ‘The Internet of Things’, the increasing interfacing of objects with the Internet as a result of which ‘everything talks with each other’ (and which also makes everything hackable like in the game Watchdogs from Ubisoft). An iconic example of that general connectivity is the refrigerator that places orders when, for example, you are about to run out of milk. The initial performance of these types of commercial products dates back to 1998 by the Japanese firm V-Sync (with a Pentium II processor!). In this case it seems that the science fiction follows the current events with an appearance by a ‘smart’ refrigerator in the film ‘The 6th day’ from 2000. These days, the smart refrigerator is the example that is cited when underlining the fact that technology can be way off target: “Truth is, no one wants to communicate with their fridge. No one wants the obligation of keeping their fridge informed unless they’re seriously short on inter-personal relationships.” (http://www.theguardian.com/lifeandstyle/2012/jan/11/homes-fooddrinks). Perhaps it is indeed not necessary at all that every object has to be connected directly to the Internet since the possibility of uniquely identifying an object via a barcode, QR code or augmented reality and thus be able to retrieve additional information via the Internet is probably sufficient for discovering whether we are buying a piece of healthy meat, whether the item of clothing is cheaper elsewhere or whether your friends enjoyed reading a certain book.

 

Previous blog in this serie: Introduction.

Next blog in this serie: Scenarios for 2020.

 

References

DigitasLBi. 2014. Connected Commerce. Comparative Analysis. March 2014. Advance/DigitasLBi.

Erich, M. 2014. Winkelgebied 2025. Samen in beweging. ING.

GfK. 2013. Dé shopper bestaat niet. Download van www.shopping2020.nl

Hofste, M. & W. Teeuw (Red.). 2012. Winkel van de toekomst, toekomst van de winkel? Enschede: Saxion, Kenniscentrum Design en Technologie.

PWC. 2014. Innovate or die. Download van www.shopping2020.nl

Schut, G., Josten, L., Beek, A., Heinemans, L., Selimi, S. & B. Jansen. 2014. Consument organiseert in 2020 zijn eigen gemak. Postnl/Capgemini Consulting. Download van www.shopping2020.nl

Shopping2020. 2013. Shopping 2020 synthese – de e-ambitie voor nederland. Download van www.shopping2020.nl

— 2014. A changing future of retail touchpoints. Download van www.shopping2020.nl

Wolters, M. 2013. Hoe shopt uw klant in 2020? GfK expertonderzoek shopping 2020. GfK.