Ecommerce to Transform Retail Landscape Quicker than Previously Expected

Shifts in consumer power and preference around efficiency and speed are converging rapidly with technological, economic, industrial and societal factors to accelerate retail's transformation even faster than expected over the next 5-10 years. The results are continuing to power innovation that will drive brands and shoppers away from big box stores and further toward digital commerce and convenience, including more brands that will offer Direct-to-Consumer, according to Edge by Ascential's Future Retail Disruption report.

This shift will be most apparent among mass merchandise channels (comprised of online players), which are expected to account for 23 percent of all global chain retail sales in 2024, up from 17 percent today. Ecommerce will grow at a 12.5-percent CAGR during this period, compared with 4.3 percent for store-based retail. And by 2030, 75 percent of CPG suppliers will operate a D2C platform, fully integrating them with other sales channels and using them as testing and innovation platforms for products, brands and market entries.

"The U.S. retail industry is experiencing disruption and reinvention at unprecedented speeds – and it is not slowing down," said Xian Wang, Global Content Director at Edge by Ascential. "The confluence of trends, innovations and sheer access to information is forcing brands and retailers to adapt and innovate or suffer severe consequences."

Key findings within the report include:

Retail will be part of an ecosystem
As smartphones develop into life management devices and customer touchpoints multiplies, transparency and choice will expand for consumers, undermining traditional levels of shopper loyalty. Yet, smartphone and connected device growth will create unprecedented amounts of shopper data which brands and retailers will leverage to inform real-time product development and personalized targeting in an attempt to restore loyalty.

• By 2025, the share of Internet users who access the internet solely via smartphones will rise to 73 percent, up from 51 percent today.

• In 2019, about 25 operators around the world launched 5G mobile networks, which offer speeds about 100 times faster than 4G. Another 26 expected to launch in 2020.

Proximity, speed and convenience will fundamentally change physical stores
Speed and flexibility in fulfillment are major competitive battlefields, requiring support from brands. New fulfillment methods, the expansion of delivery intermediaries, rising customer expectations of speed and the trend towards warehouse automation all mean that suppliers must prioritize the creation of flexible supply chains to enable on-demand service to on-demand retailers that serve on-demand customers.

• Net closure rate of retail outlets will continue to accelerate. In the first half of 2019 alone, 7,062 stores closed, while only 3,022 opened.

Living dynamics will play a major role
Consumers will be older, less wealthy, live in smaller households and suffer from restricted mobility.

• By 2050, 68 percent of the world's population will live in cities, up from 55 percent today.

For further details download the report at https://www.ascentialedge.com/insights/future-retail-disruption-report-preview

The Future Retail Disruption report was issued by Edge by Ascential Retail Insight, a platform for future retail trend and five-year forecast reporting