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 an interview with Tony D’Onofrio, Board Advisor, Influencer, Mentor, and CEO of TD Insights
This summary was written prior to COVID-19 reaching USA in full force. I am confident, that retail will be back stronger than ever with several of the trends described below being accelerated. Near term, the end of the COVID-19 pandemic may be uncertain, but multiple historical lessons point to retail recovery and stabilization.
What personally excites you the most about the retail industry?
TD: Short term, I am concerned about the Coronavirus and its impact on all industries, especially retail. China one of the highest growth retail markets which represents 20% of global GDP is most impacted. The end of Coronavirus is uncertain, but lessons from other historical crises point to recovery, stabilization and return to growth.
The latest projections have the global retail industry reaching nearly $30 trillion by 2023 with an average annual growth rate of 4%+ in that timeframe. It’s a market full of possibilities especially in still untapped markets in India and Africa.
What has been the most dramatic change you’ve seen in the industry over the past 3-5 years?
TD: Retail has transitioned through three major megatrends. The Smartphone in the hands of the consumers is the third. It is dramatically digitally transforming where retail goes next. By 2025, 79% of ALL global connections will be on smartphones and over 30% will be already on 5G. The tech-savvy Millennials which in 2019 surpasses the Baby Boomers in becoming the dominant USA generation will lead the digital transformation of retail.
What are the top trends you see shaping brick and mortar retail in the next 3-5 years?
TD: The “Retail Apocalypse” of physical which surfaced as a term in USA in 2017 remains mainly hype. An IHL study in 2019 pointed out that for every chain closing stores, 5.2 chains are opening them. Amazon & other online retail companies will more aggressively open physical stores. Ultimately you need a balance of “clicks” and “bricks” to succeed in future retail.
What technology do you believe will have the biggest impact on the retail industry in the next 3-5?
TD: GPS technologies inside stores, artificial intelligence, and computer vision are three technologies that will increasingly disrupt the future of retail. Look for these technologies to move to the edge and generate timely data for increased consumer engagement. The physical store for the most part is still highly under-sensored. Continuously connecting the digital to the physical will be a strategy for competitive advantage
What’s the future of brick and mortar retail?
TD: Stores are not going away. By 2023, 78% of global retail commerce will still be in physical stores. As Walmart and Target have demonstrated, new digital services linked to a physical store can drive aggressive differentiated growth. Physical stores will only thrive is they have a clear branding or consumer recognized pricing leadership position. Think luxury brands on one end of the spectrum with clear brand positioning and low pricing leaders on the other such as Walmart, TJ Maxx, Aldi, and Lidl. The retailers that will continue struggle are those in the middle that lack a clear brand identity, and/or aggregators of lots of brands such as department stores. The future of retail are consumer and store associates becoming passionate brand ambassadors continuously engaging in primarily a digital conversation across multiple harmonized retail channels.