This article is part of Raydiant’s Future of Brick and Mortar Retail series featuring interviews with industry experts and thought leaders with the goal of providing actionable insights that can help brick and mortar retailers prepare for what lies ahead.
The following is an interview we had with Neil Saunders, Managing Director of Retail at GlobalData.
What are the 3-5 top trends that will shape brick and mortar retail in 2021?
NS: There are a whole host of factors that will impact physical retail in 2021. Foremost among these is the ongoing growth of omnichannel which has exploded during the pandemic and shows no signs of slowing down into next year. This will require many retailers to adapt store operations and configurations to better service online demand. Another trend will be increased format flex where retailers will employ a variety of different store types to serve different locations. Having a one-size-fits-all approach to stores no longer works, so retailers need to be more flexible in their approach to store development. Using space effectively will be another area of focus for physical stores because, unfortunately, a lot of retailers have store footprints which are too large relative to demand. This might mean we see more creative partnerships such as Ulta opening in Target and Sephora taking space in Kohl’s. Finally, retailers will look to streamline store operations by using technology to automate processes, especially in fulfillment, and labor-intensive operations like checkouts.
What technologies will have the biggest impact on brick and mortar retail in 2021?
NS: Anything that helps omnichannel operations will be big in 2021. Too many retailers do not have completely joined up systems that allow them to use stores as an effective part of the distribution network, that will likely change as we move into 2021. Automation will also be important for reducing costs, although a lot of that may be behind the scenes in fulfillment rather than on the shop floor. Systems that monitor customer flow and traffic will also be vital as retailers increasingly want to assess how customers are shopping their stores so that they can optimize things like layout and configuration. Staff empowerment is another area of focus, with more staff being armed with tablets and devices that enable them to pull up customer information to assist shoppers or quickly check people out if they want to pay.
What should brick and mortar retailers be doing now to prepare for 2021?
NS: Retailers should first be assessing what their optimal physical footprint looks like in the years ahead. The pandemic has disrupted the industry and demand has shifted dramatically. It is inevitable that all retailers will need to make changes in terms of how many stores they need and where they are located. That thinking needs to start now. The other main thing retailers should be doing is carefully mapping out the role that their stores play in customer journeys and then optimizing operations to suit those needs.
In the midst of so much change and uncertainty, what’s the future of brick and mortar retail look like?
NS: Despite some of the gloomy headlines, there is a bright future for brick and mortar retail. People like shopping in physical stores and the pandemic has actually shown that there is a very big role for stores to play in the retail ecosystem. However, stores of the future will be multipurpose. They might be part fulfillment center, part pick-up point for online shoppers, part experience center for in-person shopping, and part service center to help customers with queries or problems. Stores that meet multiple needs are the ones that have the best prospects.