In the USA, over 6,700 brick and mortar stores have closed in 2017, according to the Singularity University Think Tank. These figures are catastrophic despite the retail market being healthy. The reason? The booming of online sales that are radically transforming the face of B2C retail. Analysis by Jean-Christophe Bonis, aka the French Futurist:
The end of the brick and mortar shop as we know it
Why bother waiting in line at a store when you can shop online from the comfort of your sofa? To survive, stores must re-invent themselves, to become an experience, a place where the client is confronted to the real, mobilises all 5 of its senses, tests products, gets information, and where they can even, acquire new skills. In 2015, the French construction and creation work specialist, Leroy Merlin has launched participatory workshops with a multitude of tools (laser cutting, 3D printing…) and softwares for clients to try. In the USA, the construction material group, Lowe’s uses augmented reality to plan spaces and simulate interior design projects (painting, laying tiles etc). The goal: educate and reassure clients so they eventually are more willing to go for new projects (and therefore buy). Internet giants are not left aside. Amazon — alongside with Whole Foods Market and their organic supermarkets — is now opening more and more brick and mortar stores around the world. Commercial spaces still have a bright future ahead of them.
The voice in command
In 2020, a third of online browsing will be done without a screen. In 2018, 2 billion dollars will be generated from the purchasing of goods and services through AI (Gartner). To conquer the market, big players of internet are engaged in a ruthless war. Amazon Echo with Alexa, and Google Assistant are already taking pizza orders through their speakers. In a few years, all domestic purchases will be made through these devices. Example: you want to make pancakes. Your personal assistant provides you with the best recipe to suit your tastes and the necessary ingredients. That is to say, technology will choose which brand to use depending on your purchasing history, your state of health, your tastes… The risk? That a market monopolised by big industrials and internet leaders will make sure to be directly linked to those tools to have a direct access to consumers.
To better consume at a lesser price : a hipster trend ?
To fight against manipulation attempts, consumers must stay alert. Their strength? They are now more informed than ever. Planned obsolescence, over-production, use of toxic chemicals, outrageous margins, these behaviours have caused the general exasperation of consumers who want to buy more righteous, at a fairer price. The good news is, internet brings consumers closer to the producers, and second hand sales have never been as important for non perishables. Ownership loses its value to benefit use, and the economy of subscriptions continues to grow, especially in media (VOD, musical streaming…) or transportation. For large retailers, the challenge is considerable. Brands can no longer rely on their geographical position, but have to build customer trust, who demand total transparency. Seb has understood that perfectly. The n°1 leader in small appliances now has the « repairable for 10 years » logo on 95% of its products. Another step in a direction that seems, after all, pretty encouraging.