Beyond 2020 retail (future foundation)

Beyond 2020
Retail
The Future Foundation has carried out an extensive
forecasting exercise to explore the future of several
commercial themes and sectors beyond 2020. In this
report, we examine our predictions for the future of
retail, identifying informed assumptions for the
evolution of consumer trends, product and service
innovations and the role that technological
developments will play. We also provide invented
images of retail concepts that might characterise the
future marketplace as a result of the shifts we
describe.
For more information please contact Jason Mander
Email: jasonm@futurefoundation.net
Direct number: +44 (0) 20 3008 6105

2
Contents
Beyond 2020 : The Future of Retail
The 2020 series : an introduction
Shopping futures : some working assumptions
Retail 2020+ : the constants
Retail 2020+ : the changed landscape
Concept : The Experience Bazaar
Concept : Autopilot Shopping
Concept : 3D Vending
Pen portrait : the shopper’s day in 2020

3Beyond 2020 : The Future of Retail
The Beyond 2020 series examines
how various sectors and themes will
evolve in the next decade and
beyond - employing quantified long-
term data forecasts, global
manifestations and the trends which
matter most to a) project changes
already underway into a
technologically more advanced future
and b) capture how developments
currently in their nascent stages will
progress in the years ahead.
To anticipate the longer term future in
this way is to stimulate into play the
best new trend insights - and thus
maximise marketplace advantage.

4
Some working assumptions as we look beyond 2020…
 The competitive pressures facing
conventional high street retailing will have
intensified to the point where innovation in,
say, the online shopping experience will
provoke counter-innovation from the
owners of physical spaces.
 Bricks-and-mortar retail locations will place an
increasing focus on experiences -
providing the shopper with tactile, sensory,
playful and unique encounters which simply
cannot be replicated online.
 Technology will enrich so many of our day-to-
day retail moments, with smartphones in
particular becoming indispensable in-
pocket shop assistants which help us to
navigate stores, gather offers, manipulate
prices, augment the shopping experience…

5
Some working assumptions as we look beyond 2020…
 By the start of the next decade, online
retailers will be capturing much more of our
attention (and spend). But there will remain
certain occasions when shoppers actively
want to visit the high street, as well as
times when the need to purchase and own is
so instantaneous that physical retail outlets
are the only viable option.
 No serious weakening in the price
sensitivity of the average and even the
wealthier shopper should be anticipated.
 Brand loyalty will remain under intense
pressure, especially as smart technology
makes it ever easier to locate a better deal
and / or inform any retail decision in any
sector. The appeal of premium customer
service will be energised accordingly.

6
Retail 2020+ : the constants
Some brands, especially those offering low-
value FMCGs, will continue to derive
marketplace advantage by operating on a
no-thrills, maximum-value proposition.
A distinct tribe of consumers will eschew all
technological advances and revel in a more
traditional type of high street encounter
(browsing unassisted, using written shopping
lists, paying an employee at the POS…).
There will be no weakening in the thrill
attached to physical sale shopping (its
appeal being perpetuated by the consumer’s
desire to touch, participate, grab-a-
bargain…). The post-Christmas or flash sale
will thus retain its ability to stimulate a
pilgrimage to the high street.
Cornershops and similar venues will remain
go-to locations for consumers in need of
quick retail fixes or emergency top-ups.

7
Retail 2020+ : the changed landscape (1)
 One cannot envision the long-term future
of retail without taking a view on the
Internet of Things. There can be little
doubt that the decade to come will see
further revolutions in the situational
display of highly personalised intelligence.
 Specifically, the shopper will carry round
with her a personal augmented reality
accessory which can, in fun ways, guide
the search for the most suitable winter
coat, the one with the strongest CSR
credentials behind it, the one you did not
buy two weeks ago but should have done
(because the price has risen by Euros 50),
the one that your friend Laura
recommended for you on Facebook, the
one Miley Cyrus wore when she arrived to
judge The X Factor World Finals in Kiev.
Connected shopping
 Google Goggles allows users to capture images of
any product and search its extensive library of
images to find a match.
 Buyyou is a “virtual mall” which brings together “all
your shopping in one place” through a “simple,
seamless and intuitive” interface.
Online consumers : % who use the internet
at least once a year
Source: ITU World Telecommunication ICT/nVision
0%
20%
40%
60%
80%
100%
UK
Sweden
Germany
Canada
Japan
Australia
USA
Spain
Russia
Poland
China
Turkey
Brazil
Argentina
Mexico
Indonesia
India
2010 2012(f) 2017(f) 2020(f)

8
 A blurring between the high street and
online will occur as brands become truly
multi-channelled - harnessing online, in-
store, mobile and social platforms.
 Beyond 2020, some brands will use bricks-
and-mortar stores as the last touch
point for customers who have done their
shopping in advance, online or via mobile
phone, going in-store for final approval,
alterations or merchandise pick-up.
 The propensity to try before you buy, to
check the quality of goods through touch
and feel and size will remain. Online
retailers will begin to address this with the
development of more sophisticated
virtual fitting rooms and, eventually,
computer and mobile apps with screens
which can imitate the feel of various fabrics.
Multi-channel shopping
Innovations in the early 10s :
a sign of things to come
 Digital showcase stores from
House of Fraser
 In-store kiosks from
Debenhams
 ASOS allows customers to
collect items from partnering
brands on the high street

9
 As the ubiquity of smartphones is
solidified, it will be standard play for every
high street shop to have its own app, to
assist customers with queries and allow
them to browse product ranges during
moments of downtime.
 Retailers will use mobile phone
connections to draw consumers in-store
by offering tailored incentives and
rewards. Window shopping gets smart.
And playful, too.
 Virtual maps will be available in-store and
via mobile phones, letting customers
easily navigate the store to find the exact
item they want at a minimised spend of
effort and energy.
Mobile-enabled consumption :
anytime, anywhere
Mobile coverage : already extending
overground and underground…
0%
20%
40%
60%
80%
100%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
GB
Germany
USA
China
India
Mobile consumers : % of internet users who
access the internet on the go
Source: nVision Forecast | Base: % of internet users aged 16-64 who use mobile internet at least once a week

10
 Owners of retail spaces will face
remorseless competition from any offer
which would keep people at home. And
thus, we will go to shops and malls in the
future in the same way that medieval
populations went to cathedrals : for the
artistic beauty, for the enjoyment of
ceremony, to hear talented people speak
and sing, to feel part of a special tribe, to
be entertained.
 Increasingly, the space-owner will deliver
experiences as much as putting
objects for purchase on display. In an
age in which one can buy anything from
pretty well any location (especially the
home), reasons for in-store visits will shift
and diversify accordingly.
As e-commerce soars, in-store
theatrification blossoms
E-commerce in Europe : % who have
ordered goods or services, over the internet,
for private use, in the last 12 months
E-commerce in the UK : in the ascendancy in
all age groups
0%
20%
40%
60%
80%
100%
16-24 25-34 35-44 45-54 55-64 65-74
2008 2011 2012(f) 2017(f) 2020(f)
Source: Eurostat Survey on ICT Usage/nVision | Base: All respondents aged 16-74, EU27 / UK
0%
20%
40%
60%
80%
100%
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Actual Forecast

11
 As the 21st century progresses, the world is
host to more shopping experiences
beautified by fabulous futuristic architecture
on the model of Il Vulcano Buono, Mall of
the Emirates, Khan Shatyr...
 Often, we reference here malls which are
inter alia ski slopes, displays of son et
lumière, golf courses, fashion catwalks,
seven-star hotels with personalised
concierge services, swimming pools,
gourmet restaurants, theme parks with their
own weather systems, carbon-neutral eco-
farms...
 The invitation is to see shopping less as
possession hunting-gathering and more
social capital accumulation of a kind that
cannot be replicated elsewhere.
The shop as work of art
 Starbucks’ concept store (Netherlands)
 State Farm’s insurance café (US)
 Konzepp’s Design store (Hong Kong)

12
 Beyond 2020, so much more will be
available at 21st century street-corner / in-
store vending machines - which will
feature more than the cola, choc and
chips fare we know today.
 Currently common in some Asian markets
and tested in a few Western countries,
luxury vending will provide consumers
with an even speedier way to purchase a
last minute birthday present, a designer
shirt to replace the one on which the
brainstorm americano was just spilt, the
necklace he forgot to buy for the
anniversary dinner... at any time of day.
 In-store, employees freed from the POS
will act as customer service specialists
- assisting the consumer with their
unrivalled expertise about products.
Self-service : a serious proposition
Vending in the early 10s : showing the future
of 21st century self-service
 Facial recognition machines (Kraft, US)
 Pay for items with a Tweet (Electric Ireland)
 WiFi-dispensing machines (Asahi, Japan)
 Rewarding interaction (Coca-Cola, Singapore)
 Baguette vending machine (France)
 24-hour cupcake ATM (Sprinkles, US)

13
Concept 1 : The Experience Bazaar
 In the 20s, we foresee retail spaces abounding with
experience-heavy and value-adding offers - all
designed to transform shopping into something
approaching a leisure pastime in its own right.
 High street visits will be reserved mainly for a)
choosing high-interest items or b) gaining new
knowledge, ideas and experiences - with retailers
playing on the stimulation of all the senses in order
to attract, immerse and entertain.
 As well as colour, scent, sound, taste and touch
stimuli being carefully interwoven into the
environment, there will be ample opportunities for the
human element to be provided through the presence
of experts, demonstrators, teachers, advisors…
 In the following slides, we visualise how we foresee
the Experience Bazaar being manifested in a
supermarket or travel setting.

14
The Marketplace 2.0
 The Marketplace 2.0 speaks to a retail
future in which large numbers choose to
buy their bulky, repeat purchase and low
interest grocery items via online channels.
 In-store visits, meanwhile, are reserved
primarily for the selection of fresh or
high-value products - those where the
desire to retain personal input is strongest.
 Thus liberated from the need for their
stores to display all of their products in
vast quantities, supermarkets have
become more spacious environments in
which customers can stroll through the
aisles and engage with customer service
specialists and product experts.
 Along the way, shopping has become
augmented, with stores featuring a range
of interactive displays and in-store events.
The TravelTank
 Capitalising on the growing interest in
unusual or once unlikely destinations (Libya,
Iraq, the Arctic…), The TravelTank “pops
up” on a regular basis inside shopping
centres and large stores with the aim of
revitalising the travel booking experience.
 Once a shopper enters the tank, they can
engage with augmented reality and
sensorial technology to see what
destinations might be like and experience
their sights, tastes, aromas and sounds.
 The TravelTank also provides real-time
access to local residents and experts -
giving potential visitors an “insider’s view” -
and allows consumers to build packages
(and activities) bespoke to their domestic
circumstances (catering to the needs of,
say, singletons or multigenerational units).

1717
Concept 2 : Autopilot Shopping
 Autopilot Shopping references a future of
remorseless efficiency, technological facilitation
and automatic trigger points where the consumer
pre-sets criteria for buying across all day-to-day
and humdrum categories.
 The consumer’s smart fridge, smart bathroom
and smart shopping cart will automatically
replace key items, with a range of convenient
delivery options being offered on the basis of
online diaries and GPS tracking systems.
 Whilst on the move, consumers will be able to add
to the inventory via their mobile devices by
synching with codes, capturing images or using
interactive screens in public places.
 Over-rides will be available but only if the shopper
decides to take over; day-to-day purchasing can
thus be as automated as one chooses.
 In the following slides, we anticipate how this
concept might be realised in the context of
department-store or grocery shopping.

1818
The iShop
 The iShop is the consumer’s personalised
online department store and their
“ultimate shopping partner”.
 Designed primarily for the tablet platform,
the iShop is capable of purchasing products
in any retail or FMCG category, prioritising
items from a user’s list of preferred brands
and which best fit their personal criteria
(price, eco-ethical, quality, reputation…).
 Shoppers can specify permission levels,
allowing it to, say, automatically buy 90% of
products in low interest sectors but give
them much greater control in others (eg
clothes, electronics). It can also source
complete packages, such as a week’s
worth of food, all items needed for a holiday,
Christmas presents for the family, supplies
to redecorate a house…
SmartCart
 By 2020, we expect such appliances as
the smart fridge to have entered the
mainstream - and to be communicating
with a shopper’s SmartCart to ensure that
day-to-day products are ordered (and
delivered) automatically.
 The fridge monitors its contents on a
continuous basis, synching with the
SmartCart each morning to create an up-
to-date list of products required.
 Throughout the week, SmartCart uses
price predictive algorithms to determine
when and from which online retailer each
item should be purchased.
 Consumers can exert as much (or little)
control over the process as they choose -
perhaps simply approving its decisions or
else allowing SmartCart to arrange all
aspects of the purchasing process.

Concept to be visualised

2121
Concept 3 : 3D Vending
 For the producers, brands and companies
of this world, the rise of 3D manufacturing
has the potential to dramatically alter
established manufacturing techniques
and the traditional supply chain.
 It raises the prospect of a future
marketplace in which products are mass-
customised rather than mass-produced.
 As the technology improves and printing
times are shortened, will retailers begin
offering in-store, personalised printing
services of their own? Will it be the
spectacle of in-store product creation -
the “theatre of manufacturing” - that
reverses the ongoing consumer exodus to
e-commerce channels? And will it be the
case that the on-the-go consumer can
print customised versions of desired
items from smart vending machines?

2222
3D locales in the 20s : in a retail space near you?

2323
3D locales in the 20s : smart vending options?

24
Pen Portrait : the shopper’s day in 2020 and beyond
07:00 08:00 13:00
During breakfast, the shopper
reviews the latest report
delivered by HomeConnect
- a tool which synchronises
with their intelligent kitchen
and bathroom to determine
which repeat but low-
interest purchases need to
be made this week.
Recommendations accepted,
the system mines online
websites in order to find the
best deals and then arranges
for a delivery to be made at a
convenient time.
As they commute to work, the
shopper uses free WiFi
connectivity provided across
all parts of the transport
system to browse an
aggregated list of new
additions to their favourite
branded websites. They then
review a series of customised
recommendations based on a
combination of their previous
purchasing history and those
products purchased by their
friends or endorsed by their
trusted experts.
At lunchtime, they visit an in-
store café which provides
gourmet and authentic food.
Taking advantage of a
comfortable seating area,
they watch the latest brand-
produced comedy
programme on a tablet
computer.

25
Pen Portrait : the shopper’s day in 2020 and beyond
15:00 18:00 19:00
During their afternoon coffee
break, the shopper connects
to their preferred social
network to see which
products are generating the
biggest buzz (and highest
endorsement levels) among
their contacts.
Using AR technology, they
see how various items might
look in their home / on their
person.
As the shopper waits for their
train home, they use self-
service machines located in
the station to purchase
grocery items supplied by
local producers - earning
points for their ongoing
loyalty which can be
redeemed in-store or online.
Keen to buy a present for a
friend (which they want to
select personally), the
consumer decides to visit
their local high street (which
is open late each night of the
week). Once in-store, they
browse suitable items via a
touchscreen and ask for
advice from one of the shop’s
customer service
specialists. Choice made,
they pay via their mobile and
arrange to collect the item the
next day from the station.

For more information please contact Jason Mander
Email: jasonm@futurefoundation.net
Direct number: +44 (0) 20 3008 6105

Beyond 2020 retail (future foundation)

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