5 Trends Changing The Future Of Physical Retail

Sriram Kumar
August 21, 2019
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A customer walks into the store; they are welcomed and given product recommendations based on purchase history. The recommended products are customisable based on colour, style, design. Sound familiar? This is how online retailers like Amazon and Alibaba work. But is it possible to replicate in the physical world? Before assessing the retailer, what are the customer expectations?

“Customers don’t expect things they don’t experience yet”, but “If you see the entire market starting to do certain things, that’s where customer expectations will start to be set”.Brendan Witcher- Vice President and Principal Analyst at Forrester Research

Technology continues to change the rules of engagement and consumers are more demanding. Getting them to notice amid all the noise in the market, both online and brick-and-mortar, is a great challenge.

These are the top 5 trends impacting the physical retail industry and trends which must be addressed by the retailers to face the challenge and stay competitive.


Personalisation is moving to a state of individualisation. Given the vast amount of data a retailer can capture through multiple touchpoints like mobile phones, Point of sale systems and their website, a retailer can direct their marketing efforts to customers in a personalised manner, thereby augmenting the customer experience in-store.

Starbucks have taken personalisation one step further by adopting a personalisation engine that produces individualised offers for the customers based on various factors like previous history, preferences, weather and many others. The data helps the brand to understand individual customers and use the knowledge to send personalised messages through emails. This is a win-win situation where the customers get offers for what they want, and Starbucks has increased sales.

Experiential and destination retail:

Retailtainment is creating a more immersive experience in a physical retail setup. Retailers should drive shoppers to their stores and ensure they leave not just with products but also with memories. In the ever-evolving market, physical retail is quickly becoming a destination for far more than shopping.

IKEA hosted a sleepover for over 100 customers in one of their shops. It also included a sleep expert providing customers with the insights of good sleep and how to find a mattress to fit the sleeping style. It essentially requires to satisfy the senses by providing good music, good in-store visual content through interactive store displays and other ways. Many retailers are trying to position themselves as a destination for novel experiences, thereby driving sales and increasing brand awareness.

Virtual and voice assistant:

The impact of AI is substantial in critical areas like smart speakers and chatbots. Virtual assistants are occupying a prime position in the consumer buying journey. Conversational AI can also provide a personalised experience in physical stores by optimising the listings for voice search and ensuring they show up whenever somebody nearby searches for their store or products.

Image result for target google home

Target and Google have partnered for commerce via voice. Google has issued its first voice-activated coupon, a $15 offer for Target orders placed on shopping services like Google Express via Google Assistant. Consumers will start compiling shopping lists and to-do lists through their voice assistants. Based on the list compiled, retailers can provide better offers and recommendations.

Omnichannel commerce:

Omnichannel capabilities can create convenient and easy shopping pathways for customers. Shoppers use smartphones, tablets and other devices to access the internet; they search and compare products priors to purchase. A retailer must remain consistent across all channels.

Walgreens, the leading pharma retailer, allows customers to earn points through purchases and spend them like cash in a store or online. This was enabled through the Walgreens app. This omnichannel experience was enhanced is geofencing; customers will receive alerts when they are near a Walgreens store and provides reward cards and a list of coupons. This, in turn, increases loyal customers. Retailers can harness the advantage of a different channel, thereby increasing the value of customer experience.

AR and VR:

Augmented Reality (AR) and Virtual Reality (VR) occupy a prime position in immersive technologies; they are becoming the norm for omnichannel retailing and enhancing the brand experience. Immersive technology enables retailers to deepen the online and offline knowledge of customers to offer interactive demonstrations, product customisations and help visualise the product in different settings.

L’Oreal uses the AR technology to give customers an idea of how their beauty products will look on them. Customers stand in front of the mirror and try on different shades of makeup. This feature is available on their mobile app, where customers can directly purchase the product. L’Oreal has taken personalisation to the next level by helping customers to decide on the right colour, right routine, thereby the right product.

There are too many trends to list trends, but some other notable techniques are Pop-up-stores, automated checkout, visual search, In-store mobile commerce with many more popping up every month.

Digital transformation is indeed becoming the key to survival for retailers and brands in the competitive environment. Many enterprises are already in the process of digital transformation, turning shopping into a more personalised and exciting multi-channel experience. To ensure this transformation stays on the right track, retailers need to keep up to date and embrace the latest trends.

Want to include personalisation in your offline strategy? We’d be more than happy to have a chat. Get In touch!

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