Stores aren’t going anywhere: what AI empowered customers really want
#Stores and #shopping centers are not going anywhere but they will dramatically change their faces due to #AI. Brick and mortar retail is not dead, it is being #reborn.
Shopping online is faster, more convenient, offers more variety and options and does not come with annoying sales people who try to sell stuff. Brick and mortar stores face a new generation of customers, AI empowered and tech savvy, with diverse needs and high expectations. Whether we look at a small brand store or an entire shopping center, for retail to survive it will have to offer a completely new experience in order to serve a more and more channel-agnostic generation of customers. Those stores that manage to adapt will offer something so special that no e-commerce platform will be able to compete.
You can buy everything online. From groceries (Amazon Fresh) to fashion (Stitchfix), from cars (Carvana) to glasses (Warby Parker). Everything you could possibly want is just a few clicks away. Naturally, we have to expect a retail apocalypse as stores are closing, malls are increasingly empty, and nobody seems to go and carry groceries home anymore. That is the common narrative of the retail apocalypse.
And here are some facts that might surprise you:
Shopping centers aren’t dying.
Worldwide, the number of shopping centers is growing not slowing. Mainly in Asia there is huge demand for retail space and store concepts offline. (AT Kearney)
Going to the store is still the retail choice number one
E-commerce only accounts for about 16% of total retail sales in the US today and this number is projected to hit just short of one third of all retail by 2030. This means: two thirds of all sales in retail will not happen online for quite some time. (AT Kearney)
Millennials really enjoy shopping in stores
Just not any store. Among all generations in the US millennials have the most positive view of retail spaces today with 57% saying they feel the stores are more inviting. 40% of Gen X agree. Also, and even more surprisingly, 56% of millennials would welcome more personal in-store interaction while older generations find it annoying. (Source)
But wait, there is this too:
Malls are empty. 2018 has seen the highest vacancy rates among US malls ever. Traditional brick and mortar stores are closing all over the place.
Younger shoppers have high expectations of fluidity. The younger the customer the more channel-agnostic they are which means they do not care which way they are buying from you. They want seamless transitions between online and offline, between messengers, email, chatbots on websites and in-store conversations.
E-commerce is killing local businesses and their stores. Amazon killed local bookstores, thousands of them. Now, they target your groceries and will eliminate smaller grocery chains. So will their counterparts in China.
Obviously, we are not seeing the end of brick and mortar stores or shopping centers anytime soon but we need to understand that