GDR Creative Intelligence is a Retail Innovation Consultancy based in London and New York. I got the opportunity to have a conversation with the Chief Executive Officer and retail expert Kate Ancketill. Kate is a prominent global speaker on retail futures. In 2009, she was selected as one of the ‘UK’s top 100 business people to watch’ in the Courvoisier Future 500.
The terms Omni-channel retail, Experiential physical spaces and Hyper-personalisation are recurrent in some of the blog articles published by the consultancy in 2017. Kate shared some insights on how design, in the retail sector, could be affected by these factors at a global level. According to her, cross-channel retail is the future, where the digital and the physical co-exist. However, she says there is also room for possible disruption in the future. Physical stores will need to be truly experiential to survive. Brick and mortar retail will need to be ultra-localised and should be able to continually adapt to factors affecting the local environment such as the weather, festivals and events happening around as well as the type of businesses next door. Authenticity, genuine communication and a deep understanding of consumers would be imperative for a store to be successful.
In one of her talks on retail futures, Kate had mentioned the exponential change caused by the fourth industrial revolution in which artificial intelligence would replace humans through the amalgamation of the physical, digital and biological technology. Upon asking her for an opinion on the role that culture will play in the development of AI automation and its effects on the social terrain, she said that it would definitely affect consumer behaviour. The cost of labour and AI automation are interdependent. For instance, AI development will gain traction in countries like Japan, which has an ageing population and shortage of labour. However, in low-wage countries, since the labour costs are insignificant, AI automation will not be adopted very quickly. Hence there is a possibility of uneven progress in this particular sector.
She also mentioned that in the next 2-5 years there would be an increase in consumer expectations regarding the customisation of products and services, especially in the realms of Health and Wellness. Medical breakthroughs will be one of the key factors that will lead to consumer lifestyle shifts. Consumers will be more inclined to brands that provide an individualised solution and an accurate reflection of their needs. Voice-activated AI will become popular, and consumers will trust algorithms more than the brand representatives. She also believes that we will gravitate towards transparency and the combination of AI and Human Interaction will improve the experience.
Another important purchase driver would be the need for ‘greater ease’, which can be achieved through innovative delivery services. Pavement based drone deliveries and convenient pickups at railway stations and other regularly visited spaces would satisfy the need for ease. In the future, startups that eliminate the need for physical retail by selling high-quality low-cost goods direct from the factory to the consumer will continue to flourish and pose further challenges to traditional physical retail. Kate also mentioned that the return of purchased goods is a loss-making factor for companies. In the future, companies will prioritise sustainable transactions through incentivising the ‘click and collect’ feature via third parties and by charging extra for the traditional return services.
Nostalgia seems to play a significant role in experiential branding but is it a fad or a long-term trend with potential? According to Kate, there will always be a place for Nostalgia. People inherently hate change. In the time of great change, there will be an increased attachment to the past. With the current exponential change, she says that there is a possibility that the average life cycle of trends might shrink. At present, for the retail sector, the average life cycle of a trend is approximately three years.
Her top trend predictions for the retail sector for the next 5-10 years are:-
1. A decrease in the physical store footprint.
2. An Increase in the customisation of products and services through technology.
3. An increase in the localisation of brands through technology.
4. An increase in the incorporation of full Omni-channel operations.
Her advice for potential trend forecasters is to be curious and sceptical. She suggests that researchers gather information from multiple sources to cut through the bias. Trend forecasters must also understand economics, politics, sociology, anthropology, science and technology. Additionally, they should gather information through census, polls and customer opinion. She suggests going to the difficult sources to extract vital information. Seasoned forecasters usually have the ability and the experience to use their instincts or their ‘gut-feel’ to forecast the future.
Kate shared some invaluable insights into the future of retail, and it looks very promising. It would definitely be interesting for potential forecasters to observe how soon the shifts generated through exponential growth will be adapted globally and reshape the retail industry.