By Brian Walker
CEO & Founder, Retail Doctor Group

In our previous blog article we covered off: Our first 3 future retail trends (rise of the on-demand economy, advancing innovative digital experiences between humans and machines, and time to move from omnichannel to omnipresent); how are legacy brands adapting to the trends and; what steps your business can take to stay ahead of the curve.

In this second part of the series, we look at our next 5 future retail trends and how these will affect the retail industry both in Australia, and abroad.

Immersive Experiences versus Transactional Shopping

According to RDG Insights 2022, 66% of Millennials look for social and digital experiences in retail. The future of retail will continue to see a shift towards creating immersive and personalised shopping experiences that are driven by technology.

Retailers will utilise new technologies such as virtual reality, augmented reality, AI, and the Metaverse to create interactive and engaging shopping experiences that go beyond traditional brick-and-mortar stores or e-commerce platforms.

More retailers will use virtual reality to create virtual showrooms where customers can explore products and try them on, or use augmented reality to provide customers with real-time product information and recommendations. Additionally, retailers will use AI-powered chatbots and voice assistants to provide personalised customer service, and to make product recommendations based on customer preferences.

Retailers will also focus on creating interactive in-store experiences, such as interactive displays and touchscreens, to engage customers and provide them with a more dynamic shopping experience. This will help retailers to retain customers and increase brand loyalty.

Case Study – H&M | Smart Mirrors and Enhanced Checkout Tech

As customers expect retail experiences that are smooth, creative, and fun – while also catering to their individual, unique style – H&M has rolled out a pilot of several new tech-enabled in-store shopping solutions in the U.S., including smart mirrors, new payment systems, and personalised styling.

RDG Differentiation Tip – Retail offers must focus on providing an immersive experience rather than a transactional one. This can be achieved by understanding how consumers wish to spend their time with a brand. The understanding and data learned can be used to develop strategies for store design, digital experiences, and finding new, innovative ways to interact with each other.

Agile and Distributed Supply Chain

An agile supply chain is characterised by its ability to quickly respond to changes in demand and supply, allowing retailers to quickly adapt to new market trends and customer needs. This will involve using technologies such as real-time tracking, predictive analytics, and automation to increase efficiency and speed.

A distributed supply chain model refers to the decentralisation of supply chain operations, allowing retailers to quickly respond to local market conditions and customer needs. This can include:

  • using smaller, more flexible warehouses and distribution centres,
  • and leveraging the capabilities of third-party logistics providers and transportation companies to increase flexibility, reduce lead times and improve responsiveness to customers.

Drone deliveries have the potential to grow retail sales in Australia by $2.2 billion by 2030 and slash delivery costs for businesses by up to $800 million per year. Furthermore, retailers will focus on sustainability and circular economy concepts, which will involve minimising waste, maximising resource-use efficiency, and using renewable energy sources.

Case Study – KFC | Drone Delivery

A great example of innovation driven by consumer needs and behaviours, KFC Australia has partnered with a drone service provider to change their delivery methods for more convenience and positive experiences using technology to create new delivery methods.

Targeting customers that want convenience and the capabilities of this service truly showcases the future of delivery.

RDG Differentiation Tip – For brands to ensure that their supply chain is agile and adaptable to changes in demand and market conditions they will need to implement real-time monitoring of data and analytics. This will help them create real-time visibility into inventory and logistics, allowing quick and efficient decisions to be made, but also allowing for accurate responses to changes in demand.

The Rise Of The Branded Offer

The retail industry is expected to see a rise in the use of ecosystem business models in the future, where vast interconnected communities of consumers, retailers, and partners come together to create a seamless and convenient shopping experience for customers. Companies that effectively manage these ecosystem models have reported benefits in innovation and operational efficiencies within their organization and in the market.

Retailers will adopt these models and form brand ecosystems to become a one-stop-solution for customers, blurring the lines between different channels in retail. This will enable retailers to provide more personalised and efficient service, and better meet the demands of the customers. Furthermore, retailers will also focus on showcasing products in interactive and engaging ways to drive sales and create connections with customers, further promoting the ecosystem model.

The idea is to provide customers with a comprehensive and integrated shopping experience, where different channels and services are seamlessly connected and easily accessible.

Case Study – Gucci | Pawfect Pet Collection

With more consumers treating their fur babies as children, Gucci has expanded their product range, launching a luxury Pet Collection for fashion-forward furry friends. The collection includes anything and everything to complete a pet’s wardrobe, from monogrammed coats to sweaters and T-shirts that feature signature Gucci patterns.

RDG Differentiation Tip – Brands need to create a sense of community and engagement among customers, using social media and other digital tools to foster communication and build a sense of belonging. Updating the retail ecosystem can help brands identify areas for improvement and stay ahead of changes in customer preferences and market trends.

Customer Loyalty Loop

In today’s retail landscape, consumers expect to have seamless and convenient shopping experiences across multiple platforms and channels. They engage with retailers through various channels such as in-store, website, social media, marketplaces or the metaverse, and they want it all.

The ultimate goal for retailers is to understand what goes on in the mind of a consumer and to win their mind and heart so they transform from a shopper to a loyal customer. To achieve this goal, retailers must understand and empathise with the customer, and see things from the customer’s perspective.

RDG Differentiation Tip: Instead of just focusing on customer journeys, retailers need to adopt a holistic approach known as the “Customer Loyalty Loop”.

This approach goes beyond the first purchase and considers how to create loyal, emotionally-connected customers that influence others. This requires retailers to understand the rational and emotional needs of their customers and create loyalty programs and ongoing engagement that meet these needs.

A product alone is not enough to keep loyalty as consumers now require retailers to deeply understand their needs (and their emotions), and how these come to life through loyalty programs and ongoing engagement.

Retailers who can create a strong emotional connection with their customers and provide them with a comprehensive and integrated shopping experience, where different channels and services are seamlessly connected and easily accessible, will be the ones that succeed in the future retail landscape.

By understanding the personalities of your customers you can determine how they want to interact with you at all points of their journey and what emotions drive their experience. RDG Limbic Insights™ consumer personality profiling can help map the customer loyalty loop and enhance a customer’s loyalty and repeat business.

Hyper Customisation/Personalisation

The use of data and technology to tailor the shopping experience in retail to each individual customer by creating personalised recommendations, targeted promotions, and customised product offerings will become quintessential.

Retailers will also use virtual, augmented reality, NFTs, and the Metaverse to create virtual showrooms for a more immersive and personalised shopping experience. The use of 3D printing and on-demand manufacturing will also allow customers to personalise the products they purchase and receive them quickly.

Personalisation will also be used to create a more convenient shopping experience through chatbots and virtual assistants. Retailers will use data analytics to track customer behaviour to create personalised marketing campaigns and offers.

Although hyper-personalisation requires significant planning and data mining, it can streamline the customer journey by removing obstacles (such as irrelevant products) and letting retailers guide customers toward the items that provide the most value and satisfaction.

Case Study – Adidas & Snapchat | Exclusive Bitmoji Fashion Drop

As more customers engage with brands in the Metaverse and expect more ability to hyper-customise and personalise their digital avatars, Adidas partnered with Snapchat to launch a Snapchat Bitmoji fashion drop. The result allows users to dress their avatar in branded virtual merchandise.

RDG Differentiation Tip – Personalised experiences can help reduce the cost of customer acquisition and increase the lifetime value of customers. Additionally, a hyper-personalised experience can create a deeper emotional connection, leading to increased brand loyalty and customer satisfaction. Retailers need to determine who their customers are and what their main emotional drivers are to be able to create personalised experiences.

What Else Do You Need to Consider?

In part three of this series, we will look at our next set of future retail trends and what should retailers do next to stay ahead of the curve.

Brian Walker is founder and CEO of Retail Doctor Group, a retail advisory and consultancy group and the Australian elected partner member of the global retail expert’s alliance Ebeltoft Group. As an Internationally renowned retail expert and experienced retail speaker, Brian understands what makes retailers and brands successful. Want to learn more about the future of retail? Contact us on +61 2 9460 2882 or