Is the Future of Retail Predictable?

By April 25, 2017 March 19th, 2019 Evolve Insights

As it appeared in the Daily Nation on April 25th, 2017

Globally, the retail sector as we know it is evolving. Many stores are shutting down while others are opening. Most of the changes happening in this sector emanate from retailers keenly focused on the changing needs of the customers. The retail sector despite having seasoned customer loyalty programs has customers willing to switch at an instant. Many customers are on the lookout for the newest and most innovative retail experience. The switching cost from one retailer to another is nil making a switch painless. Retailers can longer hope that the customers that have traditionally shopped in their stores will continue to do so.

Innovation and especially the use of technology have been at the core of the changes experienced in the sector today. In the USA for example, Amazon the e-commerce giant is at the center of creating the future of retail. Customers never thought that Amazon would be having hundreds of pop-up stores in US shopping malls to display and sell its gadgets. They never imagined that Amazon would open a brick and mortal stores after successfully showing the way in online shopping. The latest automated Amazon Go store in Seattle that uses advanced shopping technology and requires no checkout is a concept that retailers are closely watching. This may completely disrupt physical stores as we know them today.

In Kenya, the changing face of retail is evident. The leaders in retail business we knew a decade ago are today struggling to woo customers back. Customers are spoilt for choice and many have since found better alternatives. New retail brands both large and small are coming into the market. Retailers that were once small are growing and others are staying small and becoming more efficient. Online shopping is making inroads. Many opportunities in this sector exist. I am certain we will continue to see new entrants into the Kenyan retail sector. I wonder what impact an entry of wholesale cash and carry stores such as restaurant depot or Sam’s club would have in Kenya. We have not yet even seen the sort of retail environment that existed in the USA 10 years ago.

I consider retailing to be unique. It is within the retail sector that the majority of customer interactions happen. How these interactions are managed determines if the customers will come back or not. Having worked in the sector in the USA for three years, I have seen it go through major changes. The presentation of merchandise, the management of the supply chain process and the end-to-end customers’ experience have all evolved. I look forward to the day I will shop at a drive-through grocery store.

In 2016, the world retail congress predicted a retail more receptive to the needs of its customers. It predicted a sector focused on speed, convenience and a personalized seamless experience. Small beautiful stores and use of multiple channels were the other predictions. Today, no one including the leading retailers in the world seem to know how this future looks like. Many leading retailers in the USA such as Amazon and Walmart are showing the way and quickly adapting to the changes happening around them. Retailers that have not been able to change with the times are disappearing. Across other markets and here in Kenya, this will soon be replicated. I wonder who will disrupt the retail sector in Kenya. The future though unpredictable is expected to be exciting for the customers!

Lucy Kiruthu is a Management Consultant and Trainer connect via twitter @KiruthuLucy