The Future of Shopping in 2030: A Few Speculations
In this article, we’ve gleaned a few decent speculations from reports by McKinsey, Gartner, and other reliable research and consulting agencies, who tried to foresee what B2C and B2B shopping might look like in the near future.
While 2030 might seem like a stretch, it’s really not that far off if you think of it. It was like 2021 for us back in 2012. It is much closer down the road than 2015 was for Marty McFly and Doc Brown in 1989’s Back to the Future. Speaking of which, the famous trilogy envisioned that by 2015, we’d have a drove of new technology like flying cars and home-energy reactors, most of which proved wildly inaccurate. Speculating on the future is a thankless task. More often than not, predictions just don’t wind up true. Nevertheless, it’s a lot of fun thinking about the future.
Here, we won’t go as far as imagining automated logistics with flying cargo trucks that will deem Suez Canal irrelevant; neither will we repeat our predictions from the previous article we wrote on the future of mobile shopping (which has some incredibly useful points for e-shopping through other digital channels). Instead, we’ll flip through predictions that we think will most likely happen.
An Omnichannel Shopping Experience in 2030: Retail and B2C
In the new edition of The Next Normal, McKinsey interviews several industry leaders on how they envision the future of retail.
Quite predictably, what started as a crisis response for most retail businesses has now become the new normal, with big implications for the future. If, at the beginning of the pandemic, businesses were literally forced into rapid adoption of digital channels as a way to compensate for the unprecedented shutdowns, now, industry leaders concur that digital is imperative, shutdowns or not. However, Sajal Kohli, a senior partner and global leader of the Retail and Consumer Goods Practices from McKinsey in Chicago, is adamant in his belief that retail should shift from opening new brick-and-mortar stores entirely and spend those loose investments on technology instead. McKinsey experts even go as far as coining the term “phygital” that describes the retail of the future where physical and digital converge to create a new, completely connected reality.
But retailers, don’t despair! The future for brick and mortar is not that dingy. Experts predict that while most products are going to be sold online, flagships will still be on full display in specially equipped dazzling showrooms. Speaking of which, those few physical retail spaces that remain will take personalization to a new, previously unfathomed, level: Companies will personalize the in-store experiences to help customers engage with a product on a deeper emotional level, such as through personalized sound, smell and touch, and have digital mannequins that will quickly change what they wear depending on who is in front of them and how those people are clothed already. Sounds like science fiction, doesn’t it? Considering the way companies now gather and use our data, such a degree of personalization seems achievable.
For example, Sergei Goncharov, CEO of Pyaterochka, a Russian grocery retail chain, places high bets on big data and analytics. In his opinion, big data will soon provide information not just in aggregate but also on individual customers, which will help companies target people more specifically. He is confident that in the future, customer data will represent a combination of data from different sources, such as banking, social media, other stores and apps (nutrition data from food delivery apps, for example). This way, companies can predict a person’s shopping behavior, health and habits, and offer different options depending on circumstances. Say a person wants to lose weight and is pro-actively engaging with weight-loss apps like calorie-trackers. The stores will then provide custom-tailored recipes and shopping suggestions to help the customer achieve their goals.
So as soon as a person enters a physical space, the store will have all the customer information on file and will be able to pull it out immediately. However, the customers will be in for more surprises.
According to Brian Solis, Global Innovation Evangelist from Salesforce, successful retailers will employ experts in video-game design and spatial computing to work on imagineering of physical spaces. That is, turning brick and mortar into innovative amusement parks and translating that experience of mixed reality across different channels. Solis says that such immersive spatial computing will become a standard practice and probably be christened with a new, swank name of something akin to experience architecture.
If all that reimagining business sounds familiar, then it’s because we’ve seen it in futuristic movies like Minority Report and Blade Runner. However, as Solis emphasizes, instead of being intrusive, technology needs to be designed to help so that it can be easily embraced and welcomed by the end-users. He finishes on an optimistic note, saying that:
Great retailers, in the future, will make you feel like you’re in a special place, designed especially for you, so that you take time out of your life to go to that place because it feels like the right place to be. It’s aspirational.
The future of B2B shopping might not look as entertaining as the future of retail, but it certainly feels just as promising. After all, at some point in time, the B2C trends gradually find their way into the B2B world. It takes time, maybe longer than you’d expect, but eventually, what happens to B2C becomes a part of the B2B reality.
B2B Shopping Trends from 2021–2030
As a result of the COVID pandemic, the B2B buying behavior has become even less predictable. However, what happened, particularly the switch to digital, was a long time coming and occurred as a direct consequence of changes that were already disrupting the B2B sales. Now, as the world gradually recovers from the pandemic, we can identify a few notable signs confirming that digital sales have come of age, in particular.
● Increasing check value
B2B buyers report having become comfortable with spending online, dodging the age-old idea that digital was mainly for smaller-ticket items:
Seventy percent of B2B decision-makers report willingness to spend more than $50,000 on fully self-serve, remote purchases while 27% would spend more than $500,000. (Source: McKinsey)
● Video and live chat interactions
With the unprecedented shift to digital, in-person interactions dropped precipitously and gave in to video and live chat, forcing B2B buyers to adjust their digital habits and get used to such communication arrangements quickly.
The amount of revenue generated through online communication channels increased by 69% from April to October 2020. As of October 2020, ecommerce and videoconferencing accounted for 43% of all B2B revenue. (Source: McKinsey)
Given the choice between phone and video, B2B buyers share strong preferences for the latter.
● Understanding the challenges and willingness to address them
When asked about what would make their online purchases easier, B2B shoppers commonly referred to real-time inventory (43%), transparent fulfillment (32%) and access to alternate suppliers (31%). So, having been forced to labor through the digital world and its idiosyncrasies, B2B buyers have figured out major ecommerce challenges to address in the near future. With that in mind, B2B businesses must ensure the flexibility of an employed B2B ecommerce platform and proper back-end integrations, which, accompanied by relevant UX improvements, will display real-time inventory, transit times and order fulfillment information.
It seems rather self-fulfilling that over the next five years, we’ll see an even greater rise in digital interactions that will eventually break traditional sales models. To smoothen out the transition, B2B decision-makers need to start investing in talent and technological capabilities, the sooner the better. Companies don’t necessarily have to plunge headfirst into making big investments in technology but start small instead, that is, build upon some digital capabilities of their staff like virtual seller enablement.
Gartner’s research has shown that the future of B2B sales will experience a permanent transformation in processes and resource allocation that moves away from the seller-centric to buyer-centric model, and from analog to hyper-automated and digital-first engagements with customers.
The Gartner Future of Sales 2025 report predicts that by 2025, 80% of B2B sales interactions between suppliers and buyers will occur in digital channels.
To differentiate themselves from competitors and create sought-after value, B2B companies may have to look beyond automation and ecommerce portals into the likes of mixed reality (think AR/VR).
The true magic of those augmented reality experiences is that they bring creative and useful interactions to otherwise static touchpoints and give buyers an opportunity to see (and potentially test) how the product looks, works or might complement existing products, spaces or applications. Because of the complexity of the B2B scenarios, however, the ultimate goal of any newly adopted or integrated technology should be making the shopping experience easier for customers.
Since B2B purchase decisions depend on a multitude of factors and involve a certain degree of uncertainty, sellers need to find ways to resolve customers’ buying anxiety and help them make sense of information overload, which means transforming organizational structures and retraining sales personnel.
As part of the strategy to help customers reach a buying decision and increase customer engagement and satisfaction, companies need to get a good grasp on analytics — capture, organize, query data, and deploy machine learning (ML) and artificial intelligence (AI). To maximize the AI potential to its fullest, decision-makers have to identify parts in the supply and sales value chains where AI improvements would be most useful, such as detecting buyer signals and actions, and starting to integrate solutions in those areas.
With that said, how will B2B shopping look in the future? We think that while the number of ecommerce portals grow, ecommerce penetration in B2B leaves much to be desired. And while it’s entertaining to think of “the rise of the machines” and increasingly intelligent robots shoving aside their human counterparts by taking their jobs and moving up the corporate ladder, it’s unlikely to happen by 2030. The best we could think of is self-service ecommerce becoming the norm for all businesses. If we can achieve that, then everything else is secondary.
Conclusion
Maybe instead of asking how things are going to change and what new things and trends will emerge, we should all follow Jeff Bezos’s advice and concentrate on things that won’t change over time. According to Bezos, cheap prices and fast delivery are the only two constants that he could bet on, be it 2021 or 2265; as those things are unlikely to change, he built the whole empire around that paradigm. This way, apart from going digital, we think what’s best is to figure out, invest and improve on a couple of your most stable business trends for the next decade or so, too.
