The Stores Of The Future’: Change In The US Retail Market
16 August 2019
As a UK based consultancy, we often discuss the landscape of the British retail market, but radical changes are just as noticeable all over the world. Across the pond, Americans are now seeing their average disposable income rise more than 20% in the last five years, with consumer confidence finally starting to return after a turbulent post-recession period. What changes are the US market facing? Are there global similarities? And can we learn anything from them?
What can we expect from American retail?
Surprisingly, e-commerce is only forecast to account for 21% of total retail sales in the US by 2023, meaning physical stores may have a real future ahead of them. As is true for many global markets, new technology has provided a tipping point for growth in retail success, from automation systems to data analysis techniques. The American market also can’t deny that the consumer journey is one that is ever-evolving. Stores such as beauty giant Sephora provide immediate in-store WiFi, their systems instantly being alerted to a customer’s presence. This now has the potential to be taken much further, with consumer’s only needing smartphone access to merge online and physical, through in-store communication ideas like shopping through pre-created lists and tailored promotions.
In what other ways might changed be addressed?
Another aspect the US market is considering is what changes may also be made to the other end of the retail spectrum – working in it. New tools being implemented aim to improve retail jobs, from negotiating employee schedules from an app to sensors monitoring quantity of stock. The financial impact of introducing such changes is also being considered, with hourly rates looking to be increased by approximately 20%, as well as looking to double current EBIT margins. These ideas are still very much in their infancy, but alongside many other global markets, America looks set to embrace them whole-heartedly. The market is making sure brands and companies alike understand the level of performance needed over the next decade, have identified potential technology-enabled improvements and are in the process of already testing them. This level of detail and scrutiny of different perspectives is perhaps not as established in the current European and global retail sectors, prompting the question – are the rest of us doing enough to embrace ‘the stores of the future’?