Future of Ecommerce: How Amazon and Giant Retailers Will Change in 10 Years
Physical retail stores are closing at a record pace all while giant brands such as Amazon and Walmart are expanding their digital footprint. Of the largest retailers, they too are shifting to an omnichannel world, though many remain lagging behind. Even grocery stores, the goliaths that commonly take up more physical real estate compared to that of any other retailer, may feel safe for the time being, but disruption is on the horizon. Between grocery deliveries, smaller specialty shops, and online ordering with store pickup, grocery stores of today will function differently in years to come.
In the year 2027, it’s hard to imagine going to the same big box grocery store when already so many technological advancements are making its way into each business. Beyond grocery stores, similar changes can be found in the fashion and general merchandise industries. This poses the question, what will happen to the largest of retailers over the next 10 years? Will there be a shift in physical size? Will experiences become more meaningful than general displays and product availability? These are the kinds of questions we asked our partners, and here is what they came up with:
For giants brands (Amazon, Costco, Home Depot), how will they change or adapt to meet consumer demand in 10 years?
Bronto Senior Commerce Marketing Analyst Greg Zakowicz
From a consumer demand perspective, Amazon is leading and will continue to lead in many of these areas. Their distribution centers and warehouses have put them in a position to provide quick and cheap delivery. However, in 10 years, Amazon may be seen as more than just a retailer – as they are today. Today they have plenty more to offer, but people think of them as a store. I think they will be seen as more of a media company that sells products. I believe they will continue offering TV-type services, such as network shows, original content, sports programming, and movies.
For big-box retailers, like Home Depot, they will be more aligned to execute changes in consumer demand. Consumers expect their online and in-store inventory to be accurate and for customer service reps to have a full view of product locations to assist customers. We also expect associates to have a connected device so they can assist as needed. The thing to watch is how they control the user experience after someone leaves the store. Will installers and hired third parties deliver better service than they do now? These hired guns become the face of the organization, and in many cases, they ruin a relationship between the consumer and the brand. The store itself had little to no control over that experience, other than sourcing that third party.
AddShoppers Cofounder Chad Ledford
I don’t see huge changes happening for these retailers. They’ll continue to do what they’ve said they will do, which is delivering low price + fast access to products. Consumers will continue to consume and the large brands will continue to go where consumers are (geographically, digitally, socially, etc.). Their playbooks are simple and they have the capital to execute quickly – they don’t need a lot of creativity.
Brick & Mortar will continue to be one of the largest channels for purchases but their location sizes will continue to go down. Stores will become more like showrooms for customers to experience products and less like warehouses.
Windsor Circle VP of Business Development Gautham Pandiyan
They will all continue the multichannel journey to “Omnichannel land”, especially as Amazon experiments with brick & mortar locations, grocery stores, etc. The best blends of online & offline will become commonplace by now, with VR, augmented reality & drone delivery starting to get traction through these companies. The consumer experience will be differentiating and allow survival of the margin/price wars, so experiential shopping will be key.
Nostro Head of Partnerships Chris Nuguid
We believe that customer engagement will continue to reign king in the future. The ability to find the right products, at the right time, via the customer’s preferred channel will be the only way to reach that. Companies like Amazon, Costco and Home Depot will continue to push the boundaries of providing a seamless customer journey. They will offer the ability to not only find the products that meet your individual requirements but also get the product in minimal time.
How will consumers receive items purchased from a virtual or online platform in 10 years?
AddShoppers Cofounder Chad Ledford
I don’t think consumers care how a package gets delivered as long as it’s delivered quickly and transparently. The benefits of automation will come to the early adopters who offer this as a competitive advantage and are able to find cost savings.
Windsor Circle VP of Business Development Gautham Pandiyan
I fully expect drones to be starting to get traction by this time, and/or self-driving cars/robots. It’s a natural evolution of where we are today…how shipping/delivery touches the developing world consumer will be interesting to watch – will they do the same thing they did in skipping landline phones for mobile? Or, will this revolution not be that dramatic and overnight….?
Bronto Senior Commerce Marketing Analyst Greg Zakowicz
This will depend on areas of the country. In places where there is one mall, and shipping times are longer, I think you’ll see similar footprints like you do now. For larger metropolitan cities, I think the changes will vary a bit by product vertical. As a whole, I believe there will be a shift to smaller store footprints, which will predicate smaller inventories. But this is a double-edged sword because smaller stores are only sustainable with fast and free shipping for the consumer.
I do believe as consumers become more integrated with technology, their desire for human interaction in-store will grow. This makes the sales associates in these stores more valuable. They become the face of your brand. They become your customer service department. Because they hold more value for the brand, they likely become more of a career position than an hourly worker.
I would not be surprised to see more cohabitation of storefronts, where you have two complementary brands in single storefronts. This can bring the allure of “one-stop-shopping” to the offline world, without competing products like you would find in Walmart or Target. It also allows retailers to save on the cost of the physical storefronts while effectively doubling your marketing efforts, as each store would have two marketing departments.
I think the pickup centers will be the most adopted of all of these. These centers may turn into the requirement for free shipping. Shipping is expensive for retailers, especially the last mile, so we could see more free shipping to centers, while having to pay a small fee to have it delivered to your doorstep. Again, this provides consumers a choice of cost versus convenience.
Robots may be employed by select stores to deliver in-store pickups, but retailers should view this as an opportunity to put a human face with the brand. When in-store pickup is managed by a robot, retailers create a very sterile interaction. At that point, what is the emotional connection to the brand?
I am skeptical of drones and don’t believe them to be a long-term delivery solution. There are too many obstacles, such as the potential for lawsuits, terror threats, and general public safety issues, to make this a viable strategy.
Nostro Head of Partnerships Chris Nuguid
We will continue to see more and more of an emphasis in online channels… Not just your traditional ecommerce storefront, but social & mobile channels will continue to emerge as priority channels. Every brand you see now is building a Facebook Page, Pinterest Page, Instagram page, Snapchat, etc. Social & Mobile will no longer be just possible channels for business, but platforms of choice. Even today, more and more brands are continuing to find ways to build their presence and, more importantly, monetize those channels. Customer acquisition on those channels is the next step to understanding how crucial social data becomes for businesses.
We see this as an ever-changing market. The adoption of drones in our society has now come to be socially acceptable. People have spun this interest into other areas of controlled personalized transportation and fast shipping methods. As this becomes more and more accepted we see pick up centers and drones being the logical choice. It is all about how fast you can get your products nowadays. One hold back that this area still needs to address is flying laws and driving laws associated with drones and robots… Some of the current restrictions are not the most optimal for these forms of delivery.
Lasting Thoughts
Windsor Circle VP of Business Development Gautham Pandiyan
10 years is like a new era away, hard to think up of all the things that could happen…and exciting to imagine! I expect eCommerce to be 40-50% of retail by then, and mobile commerce being perhaps 75% of all eCommerce purchases!
AddShoppers Cofounder Chad Ledford
The big guys have very basic playbooks that stack the cards in their favor. If you play the game they’re playing you’ll get crushed. The key is for David to play a different game in the same arena as Goliath.
Bronto Senior Commerce Marketing Analyst Greg Zakowicz
Retail technology is advancing faster than adoption at this point. While exciting times are ahead, 10 years is an eternity for technology. What we see from a shopping perspective in 10 years may be completely alien to us now. I expect browserless commerce (voice control) will have a much larger footprint than it does now. Kids today use Siri and other voice-controlled devices as normal, everyday tools. When they are in their teens and ordering something using their voice, it won’t seem like a new concept. They already will have assimilated use of that mode of communication.
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