Take a trip to the small town of Rheinburg in Germany. It’s home to a 4,000 square metre supermarket created by Metro, the world’s fifth largest retailer. If you believe the hype, you are looking at the future of supermarket shopping.
In this store you’ll find the latest retail innovations, including intelligent weighing scales that can identify and price fruit and vegetables by sight (whether loose or packed in plastic). You’ll also find tablet computers that can be attached to shopping trolleys and switched on by inserting a customer loyalty card. Once activated you can download your shopping list (which you emailed to the store earlier), check your favourites list, print out personalised special offers or get map directions to the washing powder aisle.
There are also information terminals scattered around the store to help you find out a bit more about a particular brand of wine, get a print-out on a new type of toothpaste or request a recipe for the chicken you’ve just bought. Needless to say the store uses RFID technology to ensure that the shelves are never empty.
Moving forward a few years, an advertisement might start playing the moment you pick up a bottle of Pantene shampoo – or if the aisle recognises you as a heavy shampoo buyer (the Prada store in New York already shows footage of models wearing certain clothes if you hold the clothes up to a nearby screen). You might be greeted by name as you enter the store or be directed to a loyalty queue for a speedy check out. Or perhaps there won’t be a checkout because an RFID reader will automatically scan your bags as you exit the store with the bill being automatically sent to your credit card company or your e-wallet.
But do customers really want such high-tech innovations?
In the future there will be lots more old people – and old people don’t like technology. But they might like stores with better lighting, non-slip floors, lots of seats and big easy to read prices (you’ll find all of these innovations in the Adeg Aktiv 50+ food market in Salzburg, Austria). Future migration back to cities and the rise in single person households means that low-tech convenience stores, 24/7 kiosks and giant vending machines (like the McDonald’s owned Tik Tok Easy Shop in Washington DC) may be more in touch with customer needs too.
In other words, perhaps rolling out identical retail formats is history.
For example, giant enclosed shopping malls are already starting to look like dinosaurs because shoppers are too busy and too tired to fight their way through giant car parks and endless corridors just to buy a pair of shoes. In the last 10 years the number of women who consider shopping a “pick me up” has fallen from 45% to 21% in the US while another survey said 53% of shoppers “hate the experience”.
Why is this the case? One reason is that most shopping centres have no authentic identity or sense of self (‘anywhere places’ I’d call them – because the look and feel is the same from Boston to Bangkok).
Making shopping more theatrical is one way of breaking this monotony, so it’s no surprise that supermarkets are now trying to capture the sights, sounds and smells of French markets, while mall operators are trying to theme developments along the lines of thousand-year-old Moroccan bazaars.
Selfridges’s department store in London even describes itself as a theme park where customers are encouraged to buy ‘souvenirs’ of their visit. Recent foot-fall generators
have included a regional food festival, a Brazilian event and a conceptual art installation where 600 naked people rode up and down on the escalators.
Similarly, shoppers are getting fed up with giant retailers bulldozing local communities and turning streets into homogenised strips that are devoid of life after dark (75% of people in Britain think that supermarkets like Tesco – which takes £1 for every £8 spent in Britain – have become too powerful and would support stricter government controls). This is a fact that has not escaped the attention of the world’s largest retailer, which is testing smaller neighbourhood stores dubbed ‘Small-Marts’.
So maybe the future is ‘stealth retail’ — shops that don’t operate like shops and malls that don’t look like malls. This is not a new idea. Back in the 1960s Victor Gruen, the architect of the modern mall, was calling for retailers to “incorporate civic and educational facilities” into shopping centers. In other words, shopping malls and supermarkets should function more like old-fashioned town centres, with non-retail elements like schools, doctors, libraries, churches and sport facilities. A good example is a Swiss retailer called Migros that has created health and education centres.
But connecting with the local community doesn’t just mean parents collecting tokens for school computers. It means placing the school alongside the supermarket (like Sainsbury’ have done in the UK by teaming up with a company called Explore Learning) or using retail space for community purposes like Tesco has done by putting a Police Station inside a supermarket in Essex (UK). Going local also means utilising local labour and selling local produce. Farmers markets have been so successful in recent years that there has even been talk of allowing them to use supermarket car parks after hours.
Another important trend is Everyday Low Pricing (EDLP), but low prices often carry a high cost for other countries. Moreover, increased consumption doesn’t seem to be where people are heading (read Growth Fetish by Clive Hamilton and Status Anxiety by Alain De Botton). If you put a coat and bag checking service into a store people would be able to carry (thus buy) more. True, but this misses the bigger picture. People are beginning to realise that buying more things doesn’t make them happier.
In 1989 58% of people in the UK said they were happy. By 2003 this figure had dropped to 45%, despite the fact that average incomes had risen by 60% over the same period.
So perhaps the ultimate solution is for retailers be more than just shopkeepers.Maybe their higher purpose is to build and support communities. This would mean creating aesthetically pleasing environments that are integrated with all aspects of the local area. It would also mean employing friendly people rather than impersonal machines. This may add to the cost of goods, but you can’t build a cut-price community.
So what are my top 5 predictions for retail over the next decade?
1. Department stores will be reinvented to appeal to an older demographic
2. i-tags and RFIDs will trigger a revolution in mobile and contactless payment
3. More people will buy online for basics allowing retailers to focus on experiences
4. People will look to retailers to edit (curate) the plethora of products that are available
5. Wireless devices will allow shoppers to interrogate products and companies on shelf (often with negative consequences).