A new report by commercial real estate firm JLL, Prepare yourself for the future of retail, identifies some key trends in the retail industry.
Key highlights
Embrace technology: Innovations will create new opportunities. Artificial intelligence could take on shopping tasks, with unmanned drones and vehicles delivering orders as needed. AI may use consumer data to tailor the design, layout and merchandising of each store to the needs of its specific trade area.
Keep it human: The more virtual and automated shopping becomes, a greater premium may be placed on human experience: shoppers could be willing to pay more for it.
Understand mixed-use environments: New integrated mixed-use developments could change how we live and shop. Future retail spaces could more likely be a part of communities that blend residential, commercial, and recreational uses.
Cultivate spaces where planet and people thrive: Future retail spaces will have to prioritize sustainability and resilience, incorporating features like renewable energy systems. Retail environments will need to be designed to serve diverse populations equally.
A future vision for retail
“Since the emergence of e-commerce in the 1990s, some observers had predicted the demise of in-person shopping. They were mistaken. What has emerged is much more complex than a simple, binary online/offline shopping dichotomy. Consumers today enjoy a growing number of ways to shop that cater to their individual needs at any given moment. From delivery to click-and-collect to personalized in-store shopping, the retail ecosystem has exploited new technology to give consumers exactly what they want,” said the JLL report.
“In the JLL Experience Matters 2024 survey, 67% of shoppers in 10 countries told us they prefer shopping in person to shopping online.”
Drone delivery while you sleep
Artificial intelligence, robotics and even quantum computing could one day allow for intelligent human-like thought to be inserted into formerly impersonal interactions. Ubiquitous robotics and automated drones could become commonplace in many countries, said the JLL report.
- In Dallas, Texas, Walmart is offering autonomous delivery by flying drone within a 10-mile radius of a growing number of Walmart stores. The retailer intends to eventually offer drone delivery to up to 75% of residents in the region.
- Starship Technologies’ six-wheeled autonomous robots have made over six million deliveries in the US, UK, Finland, and Estonia.
Consumers of the future could make fewer regular trips to the store, as intelligent robots take on many of their shopping duties. AI, informed by sensors in home pantries and refrigerators, could be empowered to order refills of milk, eggs, and laundry detergent on our behalf, said JLL.
“Today’s smart refrigerators already hint at this future. For example, the Samsung Family Hub uses AI and internal cameras to track food inventory and automatically generates shopping lists for
low items, it said.
“Electric drones both small and large, in the air and on the roadways, would deliver these items when most sensible. Items needed immediately could be delivered right away, while other deliveries could be made in the evening when the cost of electricity is low, and the streets are less crowded,” explained JLL.
“In this possible future, retailers may shrink store footprints in neighborhoods where drone delivery has taken hold. They will also have to think about which technology partnerships they’ll need to make to successfully roll out such a complex initiative. Property developers could plan projects with drone delivery in mind, thinking about landing and parking spots in homes and apartment buildings, as well as areas devoted to drone loading, staging, charging and maintenance.”
Physical, digital, augmented… it’s all just shopping
Some future shoppers may make fewer overall trips to the store. But the trips they do make would more likely be for items they prefer to experience in person. Yet shopping experiences won’t be limited to brick- and-mortar retail. Shopping could encompass a seamless merging of digital, physical and hybrid activities. And with help from AI, those experiences could be highly personalized, said the JLL report.
Imagine the scenarios:
- An AI assistant offers a shopper a menu of suggested outfits inspired by the shopper’s past purchases and body type. The shopper arrives at the shoe store having already trialed the store’s inventory via a virtual fitting on their digital twin.
- A parent kicks off back-to-school shopping with a quick virtual fitting via augmented reality. Through smart glasses the parent is presented with realistic images of what their children would look like in their new outfits.
“Several apparel brands and retailers have tested technologies which may pave a path to this future. Shoppers are already enjoying virtual try-ons at home via mobile devices and VR headsets and in stores through AR-enabled mirrors. They may not yet be realistic enough to replace a visit to the fitting room but given time these technologies could improve. There are also a number of AI tools which offer style suggestions based on uploaded selfies, photos of wardrobes and information about past purchases,” noted JLL.
“E-commerce retailers would especially benefit from this technology. That’s because online apparel purchases would be more likely to fit and thus less likely to be returned or thrown away. This would be good for both the planet and the retailer’s bottom line.
“Shopping center owners may want to consider the impact this technology could have on their retail media networks. An interactive billboard could show an interested passerby how they might look wearing a piece from a designer’s latest collection. This could greatly increase the value of media engagements, thereby driving up revenue.
“While it’s still early days for these applications, retailers may want to engage technology providers today to develop relationships for the future. Those brands that have preexisting connections with vendors will be the fastest out of the gate as these new technologies arise.”
The full JLL report can be found here.
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