Street style at Paris Fashion Week spring 2019

LONDON — Theatrical retail is dead, and while the future shape of shopping remains a riddle, there is no doubt it will be a mix of the speed and convenience offered by AI — as well as the human touch.

Customers want to be engaged “through human interaction rather than the theatrics of light and sound,” so retailers would do well to create community events and use data to offer personalized in-store experiences, according to Tom Savigar of The Future Laboratory.

Savigar was presenting a new report from The Future Laboratory and QVC about the future of retail. The biggest evolution that retail will witness in the next quarter century are around AI, which will facilitate routine purchases, and around the continued importance of human interaction in physical spaces.

The elements that will shape retail in the future are already starting to take shape and the bravest retailers are taking note — and treating these changes with excitement.

Savigar said the lack of genuine human interaction is behind the issues that many British high-street retailers have been facing. “John Lewis and Marks & Spencer are not listening: They put a café in store instead of having humans greet customers,” Savigar said.

Lululemon’s afternoon yoga classes and Nike Live concepts in Los Angeles, where stock is adjusted based on customer profiles, are examples of brands on the right track, according to Savigar.

“It’s the idea that the social and the hospitality experience is more important than the transaction,” he added, pointing to the rise of food and beverage in retail hubs and predicting that in the next 20 years, 70 percent of physical retail will be dedicated to food and beverage.

Savigar said the changes are not only fueled by technology but by the evolution of human behavior, too. “We are rewiring the way we have been socialized,” said Savigar, pointing to an ongoing craving for human experiences, for tactility and belonging, while at the same time expecting convenience more than ever before. “Convenience as a dimension of retail is only just beginning.”

In the future, consumers’ search for convenience will lead them to let brands into their worlds, setting aside any reservations of sharing information due to privacy issues.

Zalando’s experiment with geolocation delivery is one example of how online orders will be delivered in the future. Savigar predicts that consumers will soon be letting Amazon — via Whole Foods — replenish home fridges using drones.

Virtual retail will also take a prominent role, increase the delight and convenience of shopping, although the human element will remain important, too. “It’s a different, more sophisticated way of thinking about retail than just putting on our goggles,” Savigar said.

He highlighted a shift from the screen to virtual showrooms, where customers will interact with both human and artificial influencers, as well as AI-enabled services. In the future, customers will be able to measure themselves and ensure they always get the right fit when ordering online, while companies will be able to reduce the waste and the cost of returns, which have been having a negative impact on online players’ businesses thus far.

In the U.K., returns cost businesses about 60 billion pounds and, according to research by Brightpearl, an online platform offering retailers integrated management services, a third of British retailers are already addressing the problem and making plans to ban shoppers who deliberately buy multiple items online with intent to return the majority of their order. They are following in the footsteps of Amazon, which since May has been closing accounts of customers “requesting too many refunds.”

Virtual reality can also help increase the profitability of physical spaces by creating a more seamless integration between brick-and-mortar stores and e-commerce. Utilizing AI, a retailer can mirror the physical experience online by showing the feel of a fabric in movement, for instance — and thus ensuring that more customers are inclined to visit a store and then shop online from the same retailer.

“Everyone loves having some coffee and a cinnamon bun at Arket,” said Savigar, explaining that while 86 percent of U.S. customers still enjoy the store experience, physical retailers are still suffering. This is because customers might still enjoy going into stores, yet they are less likely to purchase anything on the shop floor and more likely to leave a store and buy online from a competitor.

While physical stores are loss-making, retailers have up to 15-year leases on their spaces, so they need to go out of their way and create something interesting with their spaces.

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