What will shopping in the near future look like?
A lot different, thanks to technology just now starting to appear — and the good news is that much of it will benefit shoppers.
Traditional retailers trying desperately to catch online-only retailers are closing hundreds of stores. Wichitans have seen the loss of some, or all, locations for Dillard’s, Sears, Kmart, Backwoods, Borders, Gander Mountain, Payless Shoes and Sports Authority, among others.
And the transition is just beginning, as retailers use predictive analytics, artificial intelligence, virtual reality, drones and other technologies to build a web of services around the shopper.
E-commerce today represents just 8.5 percent of all retail sales, but it is growing about 15 percent per year, more than five times faster than overall retail growth. Total U.S. retail sales in 2016 were $4.9 trillion.
“We are going to see more change in the world of retail in the next five years than we have seen in the last 100,” said Jim Carroll, a futurist and industry consultant, during an industry presentation he made last year.
Today: you go online, read reviews, then go to the store or have an item delivered by truck in a few days. Or, you go to a store and use your smartphone to do a price comparison with other retailers.
Tomorrow: you walk into store and see video and touch screens are everywhere. While you’re trying on shirts, the clothes use RFID technology to alert the store and you’ll get a text suggesting complementary pants and shoes.
The store knows who you are, where you are, what you like and how much you’re likely to spend, so it can send customized suggestions and discounts to your phone as you shop.
The dressing room features a “smart mirror” that shows the shirt you’re modeling in different levels of light. You pay through your smartphone and avoid the line at the cash register.
The stores themselves will have fewer racks of merchandise and more interactive displays and highly trained staff to provide a more entertaining “experience” centered around the store’s brand — think of an Apple Store.
Using virtual reality, you could immerse yourself in a fashion show or a brand-sponsored charity effort in Africa.
Or, if you stay home to shop online — as more and more people will — same-day delivery will further blur the line between buying in a store and buying virtually.
As you get up in the morning, you can announce to Alexa, Amazon’s digital assistant, that you need a new dress to go out tonight. The company already knows what you like or what looks good, based on experts opinions, and makes suggestions. The dress will be delivered to your door by an Uber driver or drone within a few hours.
One of the big knocks against online shopping is that you can’t examine or test anything. So, maybe, using virtual reality – such as an app being introduced by Lowe’s – you can better see how products fit into your kitchen or can walk through a virtual showroom to look at the products in a much more complete way than you could on a two-dimensional screen.
Ultimately, some shopping may look more like manufacturing as you download a pattern to your 3-D printer and make the product yourself.
Some of this is already here, just not mainstream. Some of this will be here soon. And some is five years away, but coming.
Amazon is clearly driving this change, forcing traditional retailers to try to play catch-up.
What is happening is a merging of the two worlds into what the industry calls the omnichannel world. Omnichannel means reaching consumers through stores, catalogs, the Web, mobile, social media, events — and whatever else comes along — all connected through technology.
But while some online retailers have opened a small number of brick-and-mortar stores, there is no question which way the trend is heading.
The traditional chains are aggressively moving to update their digital offerings in a bid to stay current. Walmart, for instance, has bought four pure-play online retailers in recent years to try to capture their digital magic.
You can see a bit of the result at 115-year-old retailer JC Penney.
Like scores of other large retailers, it has a mobile phone app that lists hundreds of thousands of products, far more than are available in the stores.
But the company’s app is beginning to stretch beyond simply listing merchandise.
It now contains a wallet that keeps track of coupons and rewards points. Based on what you are looking at, it will suggest related items.
Just released is a feature that allows shoppers to use their phones to photograph an existing shoe or pillow and have the app list similar products in its catalog, said Rich Tindall, general manager of JC Penney at Towne East Square. It also enables shoppers to scan bar codes to get a price check.
The company blurs the physical and virtual. If you order online, you can pick it up at the store to save the shipping fee. Or, if a customer elsewhere orders something from jcpenney.com, the request may be routed not to a warehouse, but to the Towne East Square store for shipping. Tindall said his store averages 100 shipping requests a day.
And, of course, online allows in-store shoppers to do research. Tindall said 70 percent of store buyers visited jcpenney.com first.
A lot has changed since Tindall got into the business in 1978. Stores then weren’t even computerized, let alone integrated into a rapidly digitizing world.
How does he like the new world?
“We like it here in the stores,” he said. “It makes things easier, and it makes the customers happier.”
This helps me how?
The expectations of shoppers, particularly tech-savvy younger shoppers, are shifting along with the technology, said Ana Smith of the National Retail Federation.
Technology promises shoppers vastly more selection, less waiting, faster turnover in styles, lower prices and more transparent pricing by allowing instantaneous price shopping.
Smith said that consumers give up a lot of information about themselves, but in return get control over the buying process and pricing.
“The consumer wants to control the experience,” she said. “We are going to see that.”
Traditional retailers are also adding something special to make a trip to the store worthwhile. Nordstrom has opened a cocktail bar in its downtown Seattle location. Macy’s has incorporated the upscale Frontera Grill in a few of its big stores.
But that’s reserved for their premier locations. The smaller markets will see store closures as sales fall, she said.
“There is a role for a physical store, but it’s not to sell commodities like a box of Tide,” said Kissan Joseph, a business professor at the University of Kansas.
“The world is not going to change in one night, they’re not going to zero, but you’ll see a steady 4 to 5 percent decrease every year and that is very painful,” he said of traditional retailers.
As brick-and-mortar stores withdraw from many local communities, it may open the door for more home-grown shops that sell local or unique products, along with the feel-good sense of helping out the community.
Nicole Campos, owner of Bling, a clothing store based in Scott City, is opening her ninth store, and second in Wichita. She’s young and believes in technology. She uses a social media strategy to clue regular customers when new clothes are in.
“I think we’re doing so well because of social media and because we work so hard at building relationships,” Campos said. “We want them to feel like they are in our Scott City store. We want the small town feel.”
The technology and convenience advantage that Amazon and other online retailers have is powerful, and will only grow more so, Joseph said.
“They are increasingly going to be ubiquitous as they understand me better and better,” he said. “They’ll be able to provide more products to me better.”
The cost in jobs will likely be huge over the next decade as national retailers shut down stores, replacing millions of clerks with a fraction of their number of IT workers and warehouse staff.
A report this week by Cornerstone Capital Group suggests that as many as 7.5 million retail jobs are at risk of disappearing in the coming years.
It will be a difficult and painful transition for many of today’s traditional retailers — some won’t make it — as well as the communities in which they are located.
These companies, some with histories going back into the 19th century, are trying to cross the bridge to the future at an increasingly rapid pace as the old ways of selling and the older generations pass on.
“The technology will be a lot more in your face, basically,” said Smith, of the National Retail Federation. “Right now, it’s in transition, trying to appeal to younger millennials and Gen Z, but still offer things to generations who shop very differently.”