This article is part of Raydiant’s new Future of Retail series which interviews the world’s leading retail experts to better understand how the industry has evolved and most importantly, where it’s headed.
The following is from a recent interview with Board Advisor Richard Hyman.
What personally excites you the most about the retail industry?
RH: The most exciting development in retail is coming from the total shift in the relationship of supply and demand. For generations, growing a retail business meant simply making it bigger. Today, oversupply and saturation have changed all that. Growing will increasingly depend on being better. On being more relevant, on understanding your customers better and executing better. Success will depend on being increasingly commercial.
What has been the most dramatic change you’ve seen in the industry over the past 3-5 years?
RH: This reversal in what was the structural status quo and its implications is the key determinant of fortunes. There is no longer anywhere to hide. After decades of chasing growth at almost any price, many retailers are now struggling with consequences – too many stores, too much footage, too many SKUs and a customer base too focused on peripheral customers and not enough on core customers. Now that supply exceeds demand, these weaknesses are increasingly strangling many players.
What are the top trends you see shaping brick and mortar retail in the next 3-5 years?
RH: The most successful players are those that really understand their customers and build a model to serve them. This is less about data and/or spend on research and much more on knowing how to use it to leverage your sales and optimise returns.
What technology do you believe will have the biggest impact on the retail industry in the next 3-5?
RH: We really are only in the foothills of AI development. Personalisation is much talked about, against a more general backdrop of progressively lowering customer service levels and poorer actual experiences. Reversing this trend has the potential to transform the industry’s trading economics.
What’s the future of brick and mortar retail?
RH: People will always want to visit and purchase in physical shops. However, the massive growth of online has cannibalised physical floorspace. There needs to be a massive reduction of physical space, and this has barely begun. The weaker players will gradually be taken off life support and make room for the strong to elevate the overall customer experience across the industry.