Key trends driving retail in 2020

The first decade of the millennium saw vast changes with some enormous challenges. How we read, watch, learn, communicate and consume have all altered dramatically. The last decade seemed to involve a continuous battle of the digital and physical. And, as we saw with the blurring of real news and fake news, not always positively. The 2010s also saw environmental concerns enter the mainstream narrative, an urgent subject which will no doubt become ever-more central in the 2020s.

We work within various sectors – with architecture and construction, aviation and finance, and lifestyle, retail, and entertainment – and we keep up with themes and trends within these areas. Recently we looked at urban living, arguing for the paramount role of architects and designers in placemaking and creating better societies through design. Elsewhere, we did a little forecasting into possible future sustainable transport. Less pivotal to our future, but nevertheless an instrumental part of modern life is the retail landscape, how we shop and consume.

The last decade was a testing ground for how digital shopping can live harmoniously with physical retail. As technology advanced, the 2010s saw a generation of digital natives begin to shop confidently online, then seamlessly clicked-and-collected on their device on social media. Traditional forms of advertising gave way to the influencer movement, to powerful plus-million-follower YouTubers. And there were some major casualties too on the traditional high street.

What has emerged, though, is less dramatic and the figures are intriguing. According to a report by Millennial Marketing, Generation Z will account for £111bn of retail this year. This omnichannel consumer group makes their transaction wherever it is more convenient, yet demands the physical experience of bricks-and-mortar. As an example, according to KPMG, the UK market’s online presence will increase by only 10% to 30% by 2050. This leaves the bulk of consumers hungry for the physical touch.

The bricks-and-mortar shop is therefore likely to remain a key player in future retail, but it will evolve into something entirely different. The shop will be the brand ambassador. To thrive, the clever physical space of the 2020s needs to offer what the digital world cannot give. Shops will become experiential places – engage and offer excitement, serendipitous finds, help form tribes, build communities. Branding and design have the power to alter the destiny of retail. Data will also play a major role here. Brands will need to work intelligently with technology to get to know their consumers’ habits and needs. This will assist the logistics of shopping too, determine in-store stock, offer seamless transactions and deliveries.

Millennials and Gen Zs are increasingly aware of the source – they like transparency, they want to know the brand story. This consumer group responds positively to the intimacy of social media, they are increasingly ecologically conscious and like to buy from direct-to-consumer brands. The traditional retail world, therefore, needs to respond to this mind-set, work positively with social media, take a genuine ethical stand and support independent brands. We are already seeing this trend with some of the major retailers hosting smaller labels and offering upcycling and reuse services.

The 2020s are likely to be the cementing decade of the phygital – with the physical shop recruiting and retaining consumers and the digital space dealing with the logistics. In the 2020s the physical space will be free to become a performance stage – an imaginative editorialised space with ever-changing curated content that excites consumers and gets them involved. Many retail outlets are already on the right track, but we suspect the consumer-focused, experiential element will be the key driver to success. To thrive, the shop of this decade – or at least the start of this decade – will be personal, intimate and predictive, and it needs to be progressive and open to change.

Images: Applegreen, one of the world’s foremost convenience food and beverage retailers; and the spa and natural therapy brand Cowshed

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