The retail industry has undergone a significant transformation over the past decade, and it continues to evolve at pace. Technology is at the heart of that evolution, writes Niall May (pictured), Partner at RSM Ireland

Rapidly changing consumer habits, fast-changing technologies and challenging competitive dynamics are all occurring against an overall positive economic backdrop.

With traditional physical retailing being challenged by technology and the ever-changing behaviour of the connected consumer, brands and retailers are being forced to rethink their businesses. With the changing shopping model, it is critical that retailers find the most effective and efficient way to reach the socially and digitally savvy consumers.

As a result of the above, the retail sector is now defined by emerging technologies that change the way consumers interact with their favourite brands, a shift in preferences and the emergence of battle lines for e-commerce.

The following trends will help with the continued redefining of the retail sector in the coming years. 

Bricks-and-mortar shops

One of the interesting trends of the current retail model is that despite the increased closure rates of the ‘bricks and mortar’ shops, they still play a key role in the sales process. 

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As the retail model continues to evolve, bricks-and-mortar locations will continue to shrink in number of units and in size of footprint, as retailers cater to changing buying behaviours.

Data analytics and demographic data will drive site selection, as retailers endeavour to go where their customers want them to be. Prime retail real estate will continue to command high rates because there will be less of it, as areas once perceived as prime retail selling space are redefined by the consumer.

Efforts to revive regional shopping centres will continue, but success will be inconsistent depending on geography and demographics.        

Buying behaviours and brand

Buying behaviours will continue to evolve as Generation Z becomes a larger part of the consumer base. As the first truly digital generation, Gen Z will push retailers to new digital platforms to connect with them.

YouTube, Instagram and Snapchat accessed by mobile are platforms of choice for Gen Z and they are the most likely group of consumers to purchase on social media, making these platforms very important and introducing a new dimension of ‘omnichannel’ for many retailers. That said, bricks-and-mortar locations will continue to be an important channel for retail.

Despite the growth in online purchasing, recent studies suggest that millennials and Gen Z consumers also enjoy the physical shopping experience. Enhancing that physical shopping experience will be critically important.

Creative and interactive technologies will continue to play an important role in developing unique in-store experiences. Knowledgeable staff who embrace and promote the brand will help build connectivity and promote brand loyalty.                   

Staffing

Staffing will be a challenge for retailers, as low unemployment and competition will make it more expensive to recruit and retain staff. 

It is anticipated that many retailers will experiment with technologies to streamline processes. 

Self-checkout and mobile checkout will become more prevalent in high street shops, as they provide the dual benefit of reducing cashier hours and providing flexibility to put more personnel on the sales floor. 

More progressive retailers will experiment with facial recognition and other advanced technologies to streamline the purchasing process. In all cases, retailers will need to find the appropriate balance of technology and human interaction to connect with their customers and build brand loyalty.   

Ethical standards

Traceability, labelling and overall ethical standards will continue to be a focus for food retailers and across the food supply. Expanded use of blockchain technology will enhance traceability and shorten response times when issues arise in the food supply. 

To be effective, however, retailers and their suppliers need to participate. While this will likely take time to permeate the entire industry, those on the forefront will be rewarded by consumers concerned with our food supply and the number of recalls announced each week.   

The latest trends in retail are driven by a combination of an evolving technological landscape and the shifting preferences of consumers as demographics start to skew younger.

RSM Ireland works with a range of retail businesses in in providing expert advice to mid-market businesses. This advice is provided a team of multi-disciplinary experts across several areas, including risk advisory, technology, governance, human resources, corporate finance, restructuring, taxation and audit.

• Niall May is an Audit, Advisory and Assurance Partner at RSM Ireland. For further information, contact Niall at nmay@rsmireland.ie or phone +353 1 496 5388 .