Disruption has become the new norm. Technology is accelerating this change at such an exponential rate that 2030 is already just around the corner. Retail is currently undergoing a revolution - how, where and when to buy is going to become an entirely different experience. CBRE unveils the consumption trends that will mark the next decade in its latest study The Future of Retail 2030. Martin Summerscales, Director, Retail, CBRE UK, will help us to decode these trends and will reveal how the retail market is already adapting itself to changes.
Big data is central to predicting consumers´ needs. Can you comment?
Yes, we are seeing retailers increasingly using big data to learn more about consumers. For example, Missguided, a UK retailer, uses big data to understand the quantity of clothes that they need to produce. They do this by utilising data on the level of interaction that they see on their website.
This ensures that the retailer only manufactures the number of garments that they would sell, allowing them to reduce the number of unsold items, keeping profit margins as high as possible.
Will ‘customization’ be a keyword in the future of retail?
Yes. It is likely that in the future each product will be tailored to client needs – perhaps not the whole product but it will definitely be more common for parts of a product to be customised for each shopper.
How is CBRE anticipating these insights?
At CBRE we build strong relationships with and regularly meet our retailer clients to understand their businesses and how they are innovating in this data-heavy world. We also invest heavily in our own research and analytics to ensure that we can offer our clients market-leading insight. Calibrate is a great example of this. Our proprietary technology, Calibrate uses GPS data from mobile phones to understand shopper movements and consumer profiles. It allows our clients to gain a really strong understanding of different retail locations and helps them to understand if a location is right for them. The future of Retail 2030 is another fantastic example of that.
How is the consumer today?
Thanks in part to the internet, consumers now have more choice than they have ever had before and this means that they consequently hold more and more power over retailers who must compete for their customer.
Consumers now constantly demand better prices, faster delivery and simpler returns. Ten years ago, we ordered something and the delivery took five days. Now people expect their deliveries to arrive the next day. In another five years, people will expect to receive parcels within the next hour. Because retailers must constantly adapt to consumer demands in order to compete with one another, shoppers have higher expectations than ever before.
How is the retail environment today?
Particularly in the UK, leisure is an increasingly important aspect of the retail environment. As more shopping continues to take place online, it is increasingly important that shopping centres offer something to differentiate themselves from online retail.
People are increasingly looking for experiences. A way of doing this is through offering more options for dining, leisure and services and for that reason we do expect to see the proportion of shopping centers dedicated to retail to be lower in the future. Retail will no longer be purely about the transaction, but the whole shopping experience.