Rapid technology advancements and rising customer expectations have transformed the global retail industry in the past decade. However, the COVID-19 pandemic has been a key disruptor.
Frost & Sullivan’s recent analysis, The Four Ps of the Future of Retail, highlights the four aspects of retail – future retail place, future points of commerce, future people, and future processes – in the post-COVID era. In this constant state of flux, retailers should understand the industry’s current trajectory and prepare strategies to gain an edge over competitors while maintaining financial solvency. These four Ps will help retailers develop their roadmap.
“The retail space will undergo massive changes as the age of disruptive technology, exacerbated by the pandemic, continues to impact consumer behavior and buying trends,” said Murali Krishnan, Visionary Innovation Group Senior Industry Analyst at Frost & Sullivan. “Going forward, physical stores will have to reinvent themselves; they will evolve from small boxes to novel boxes, and the emphasis will be on technology adoption, customer engagement, and social experience.”
Krishnan added: “New points of commerce such as home ambient commerce and in-vehicle commerce will emerge, and Gen Alpha—babies born from 2010 to 2025—will join Gen Z in becoming a dominant digital-native population influencing retail strategies. Further, digital assistants, assisted commerce, AI-driven decision-making, and automated processes, among other technologies, will revolutionize all aspects of retail, leading to a personalized, fulfilling customer experience.”
To tap into the growth prospects, vendors need to focus on the following:
Future retail place: Online retailers will aggressively partner with or acquire companies with a strong physical footprint to provide an effective online-to-offline experience.
Future points of commerce: The rise of the Internet of Things and the growing trend of sensorization will mandate that retailers and brands develop new strategies to compete and lead in these new points of commerce, such as smart home commerce, in-vehicle commerce, and anywhere commerce.
Future people: Vendors need to understand the purchasing habits of Gen Alpha. This group comprises the latest power brokers in the family and will also become a dominant population cohort by 2025.
Future process: Contactless shopping will gain prominence in the post-COVID world. Retailers will increasingly invest in digital technologies, including augmented reality, ambient commerce, artificial intelligence, automation, and data analytics to gain a competitive advantage.