We are living in a time of unprecedented change. The way we work, shop, and communicate has changed forever in a matter of months thanks to COVID-19 and the measures put in place to help stop its spread. Out of necessity, people have gravitated to technology like never before, and there’s no turning back. This pandemic has driven a surge in online and mobile commerce and changed global shopping habits forever. Retailers without an online or mobile commerce option are getting left in the dust—relics of the bricks-and-mortar era that is fast evaporating.
Savvy retailers are already looking ahead to what is next. If e-commerce capabilities are now table stakes, what will be required to succeed in the future?
To understand the consumer of the future and deliver a retail experience that will appeal to that consumer, retailers need to pay attention to three key trends:
The emergence of Gen Z
Millennials, the generation born between 1980 and 2000, are soon to be eclipsed in terms of spending power by their younger, tech-savvy counterparts from Gen Z.
Gen Z, or the Tik Tok generation, consists of everyone born after 2000, and believe it or not, some of them have already entered the workforce. They grew up in a much different world than Millennials and as such, display entirely different preferences and consumption habits. Gen Z is the first generation to grow up in an entirely tech-enabled world; understanding how to deliver a retail experience that will appeal to this cohort will be a decisive differentiator for successful brands in the future.
Why pay attention to Gen Z? Even though the eldest of this cohort are barely out of their teens, they already command almost $50 billion in spending and have influence over $600 billion in family spending. As of 2020, Gen Z is the largest generational cohort in the U.S., representing almost 30% of the total population. Ignore this consumer powerhouse and you may as well shut your doors now.
Unlike their predecessors, members of Gen Z were born into a world where the internet and social media already existed—for them, technology is not a convenience or novelty, it’s a way of life. While it may appear that their reliance on technology has driven them away from community building, spending hours glued to phones or game consols, quite the opposite is true—communities are alive and thriving, but being built online. For Gen Zers, the world is their schoolyard.
Technology isn’t the only thing that sets this generation apart. They are much more socially conscious and value-driven than any generation before and will demand higher standards from the brands they choose to do business with.
Make way, Millennials—Gen Z is coming through. Ignore them at your own peril.
5G and the consumer experience
For those that don’t know what 5G connectivity is, it is the fastest internet and connectivity experience the world will ever see. It’s here already, but not yet in full commercial use. Our devices aren’t advanced enough to fully take advantage of all it has to offer—but when they are, watch out.
Ten years ago, the way we shop arguably changed forever with the introduction of one product: the Apple iPhone. What was revolutionary about the iPhone was not the product itself, but the ancillary app store that Apple created. The app store opened up app development to the world and the plethora of apps that followed have forever changed the way we shop, work, and communicate.
5G has the potential to change the consumer landscape in much the same way the app store did, the only question is how. With an increasingly fast internet connection, the possibilities are endless. Businesses such as Uber and Airbnb were made possible because of advancements in internet technology that allowed their apps to be supported on mobile phones—the businesses that 5G will enable haven’t even been conceived of yet. Perhaps niche technologies such as augmented and virtual reality will become ubiquitous as faster connectivity makes it easier for those technologies to run on mobile devices.
While no one can predict for sure how to appeal to the consumer of the future, one thing is for sure—5G is set to change everything. Successful retailers will be the ones that keep on top of consumer trends and adapt their commerce channels and brand experience to a 5G world.
5G and supply chain disruption
The impact of 5G goes well beyond the consumer experience and is likely to drive tremendous change in the very way that business is conducted.
Driverless or autonomous cars are a technology that currently exists; however, they aren’t commercially available as yet. Technology is evolving fast, but unfortunately, legal processes move at a much slower pace than technology. Working with governments to develop laws around driverless technology for public roads could take years, but the same level of policy and process obstacles don’t exist across the commercial supply chain. With 5G technology, it’s easy to picture a warehouse run by autonomous vehicles with no or limited human oversight whatsoever. In fact, this is already happening and causing massive disruption across the entire supply chain.
Given faster connectivity, automation can grow well beyond the warehouse. Imagine captain-less container ships crossing oceans without a single human aboard, and operator-less cranes unloading the cargo once those ships reach port.
The technology is already here. The problem is that at current internet speeds, it’s simply too expensive and not scalable. 5G promises to change all that.
Serving the customer of 2030
Given the rapid pace of change in commerce we’ve seen over the past 20 years, it should be evident that those retailers most likely to succeed are the ones looking forward, figuring out how to serve the customer of the future.
One hundred years ago we had the Roaring Twenties—a decade of post-war economic prosperity and social change. As history is known to repeat itself, we may be in store for another decade of unprecedented economic and social change—this time led by technological advancements and a globally-connected, socially-charged generation hungry for change.