Retail Trends 2020: What Retailers Need to Know to Grow in the Future

meyers

An interview with Al Meyers of PwC, director in PwC’s Retail and Consumer practice in Dallas, Texas

I met Al Meyers in the early1980s when I worked at Sanger Harris, a division of Federated Department Stores. Al was with Management Horizons in Columbus, Ohio. Meyers is now a director in PwC’s Retail and Consumer sector, which provides industry-focused accounting, tax and consulting services for public and private clients. In the past 20 years, Meyers has been a frequent guest speaker at the annual Texas A&M National Retailing Summit. As a member of the Board for the Texas A&M Center for Retailing Studies, I have had the opportunity to continue to network with Meyers as both of our careers have matured in the decades since we first became acquainted. Meyers is also a frequent speaker at the Dallas Fort Worth Retail Executive meeting.

What is your role at PwC?

As a director in PwC’s Retail and Consumer practice in the Dallas office, I advise retail and supplier clients on strategy, operations, merchandising, HR, technology and financial and accounting issues. I have more than 30 years of consulting experience assisting retailers and branded suppliers with strategic growth and productivity improvement initiatives.

What are the highlights of the Retail 2020 study?

Retail 2020 is a study that PwC has been doing since 2006 which projects retail trends in the future.. In the study, PwC identified three major shifts that are going to occur—a massive shift to globalization, smaller store development and a diverse fragmentation of shoppers. The globalization shift is occurring with the new “non-store,” which includes mobile and online channels. These channels will make up 12 percent of the overall U.S. retail marketplace by 2020. In order for retailers to grow in the future, they must understand and respond to the fact that customers want consumer goods “when and where they want it.” This will be a major challenge for retailers. To customers, these are not channels but rather an “omni-channel,” which is a 24 hours a day, seven days a week mentality.

Another important trend is towards smaller store developments that can meet the needs of urban and downtown sites, as well as rural developments, where larger, big box chains cannot support the community. Putting stores closer to the customer and making every square foot count is a significant shift from the big box stores that have been highly profitable in the last 20 years.

Lastly, increased populations and the diverse separation of the shoppers at both ends –with the luxury market at the top — will also be a major trend. Older consumers who have lived through several recessions are more financially conservative than younger consumers. By 2020, there will be a major split into two groups: the under 30s and the over 50s.

What kind of leaders will be needed to lead companies with this major cultural change?

Historically, retailers are very operationally focused, and the great ones will need to be customer-centric. They will need to be innovators with the ability to change at a fast pace. They will need to be able to re-position to the changing landscape with a relentless focus on the customer while also understanding the new metrics. Retailers of the future will need to really grasp the true meaning of loyalty. The executive of the future must understand the young consumer.

What are some of the newest trends you are seeing?

There are several noteworthy trends. In the stadium environment, retailers are using pop up stores that allow customers the ability to easily select what they want to purchase. In the grocery market, one convenience store chain in Korea is taking “convenience” to the next level with “smart walls.” The smart wall is a concept that allows individuals who are waiting in line at subway stations to select grocery commodities such as toilet paper, dishwashing soap, diapers, etc. from an interactive shopping wall. Their groceries are then delivered to their home in a few hours. One eyewear retailer is offering a “try before you buy” service for consumers in both their online and brick and mortar stores. This unique service allows potential buyers the option of trying the product on at home before they buy or by virtually “trying on the eyewear” via their website. Potential buyers can then share the image of themselves wearing the eyewear with friends on Facebook to get feedback. Food trucks are hitting the scene in a big way. From grilled cheese sandwiches and gourmet paninis to cupcakes and crème brûlée, food trucks are bringing specific food directly to the customers. The self-contained trucks can also be seen in the popular video and online gaming industry.

What changes will need to be made in communication and marketing to consumers?

Leading retailers will be those that are the best conversationalists and are good at listening to their shoppers’ needs, along with communicating a secure and self-confident image to their consumers. They will need to re-act quickly, be where the shopper is and offer relevant messaging all in the timeframe that is important to the customer.

What will small businesses need to do?

Small businesses need to have the ability to reach out globally through technology and go beyond their walls.

If you didn’t have to earn a living, what would you do?

I would own a surf shop in Costa Rica.

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