Future of Retail
2017 ICSC Presentation
Principal: Sean Selby
Understanding the Architecture of Shopping
In the 20th century, shopping architecture grew larger, flatter, and more standardized, as retailers focused on expanding scale and improving efficiency to maximize profits. While this focus on efficiency worked well for the pre-internet age, advances in technology migrated the physical advantages of scale into computerized logistics and supply chain management. As retail foot traffic shrinks, and online sales increase, the industry is uncoupling from large-format, one-size-fits-all, efficiency-driven real estate. To thrive in the internet-connected economy, retailers have to invest in more human-scale development and design tailored, one-of-a-kind experiences that place people first. Digitally native companies are building brick-and-mortar flagships that celebrate their brand and products. Next generation retail will serve as unique places that connect brands with their community, through design, community events, and attentive service.
Over the past few decades, shopping has been radically transformed by information technologies and changing consumer tastes. 2017 has seen a flurry of mergers, downsizing, and bankruptcies by department stores and large retailers, as foot traffic has declined in many shopping malls and brick-and-mortar retail centers. Traditional retailers face stiff competition from large online retailers like Amazon, as well as smaller, more nimble digitally-native vertical brands (DNVB)*.
Evolution of Shopping
Throughout history, successful retailers and developers have learned to invest in innovation and leverage new technologies to adapt to changing consumer tastes. From mail order catalogs to escalators and point-of-sale systems, retail leaders, designers, and marketers have constantly implemented new technologies to improve their customer base and reduce sales friction.
The modern history of retail can be broken down into several generations defined by technology, economy, and social behavior: