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What shopping will look like in the next decade

January 26, 2018

Unmanned brick-and-mortar stores are set to be the next big thing in the retail sector. Photo: Mike Kane/Bloomberg

From robots to smart mirrors, the world of retail will look like a very different place in 2030.

Shifts in lifestyles, urban environments and retail operations and logistics will transform the way people shop in the future, a new CBRE report predicts.

One of the biggest changes will be the rise of robotics and automation.

Self-serve checkouts are an example of automation in shops that has been in place for several years. Photo: Justin McManus Self-serve checkouts are an example of automation in shops that has been in place for several years. Photo: Justin McManus

CBRE retail director Zelman Ainsworth said automation was already happening on a basic level in many Australian stores.

“Something that is working really well in all supermarkets is the self-checkout model – not only does it alleviate the need for some staff, but it also helps to prevent long queues and is a far more cost-effective way to manage a store,” he said.

Amazon made headlines this week when it opened its first Amazon Go store in Seattle, which is cashier-less and lined with cameras and weight sensors to track activity in the store. The launch came close on the heels of Chinese tech giant Tencent unveiling its unmanned pop-up store in Shanghai. The company is late to the game, with four of its rivals having already opened similar shops across China.

Robotics is also being tested and introduced in stores across the world. Target ran a one-week trial in San Francisco of an inventory-tracking robot, Tally, which can move on its own to scan products on shelves to monitor stock levels and detect misplacements.

Pepper, a line of humanoid robots developed in Japan, works directly with customers in retail stores. As it is always connected to the internet and the cloud, it can provide information real-time in conversations with shoppers and even complete transactions for them.

Mr Ainsworth said smart mirrors were another emerging technology that could check up on a product instantly for customers, who won’t need to leave the change room. This enhanced the fitting-room experience, which hadn’t been improved in most stores in about 50 years.

“The technology scans all products being brought into the change room, and the mirror will then display what other size and colours are available in the store. Customers can easily touch the smart mirror, which alerts the store staff to bring certain products to the changing room,” he said.

Apart from convenience, it provided valuable data on what customers were buying, as well as what they are not, and why.

Pepper the humanoid robot is the world's first "social" robot, as it is able to recognise basic emotions. Photographer: Yuya Shino/Bloomberg Pepper the humanoid robot is the world’s first “social” robot, as it is able to recognise basic emotions. Photographer: Yuya Shino/Bloomberg

The way companies assess store performance will also change as brick-and-mortar shops become more focused on service and brand experience, as opposed to closing sales, CBRE’s global Future of Retail 2030 report suggested.

“Store performance measurement (is) currently measured in sales per square foot and/or conversion rates, but this will change to metrics like foot traffic, ‘touch points’ or dwell time,” it wrote.

“(Thus) lease structures typically dependent on percentage or turnover rent will need to be restructured as the methods of measuring store performance shift.”

The report also noted that shop frontage is underutilised, as most stores are not open 24/7. Window space will be let out as real estate to brands which aren’t present in the shop to generate income.

The Amazon Go store is a sign of what's to come: more automation and artificial intelligence. Photo: Amazon via APThe Amazon Go store is a sign of what’s to come: more automation and artificial intelligence. Photo: Amazon via AP

“The power to make the windows ‘come to life’ will be used to a far greater extent that it is now. Store windows will be used in conjunction with smartphone-like devices to create animated and curated visual output.”

In Nuremburg, Germany, a trial by Adidas allowed customers to browse and buy products through the store windows and their phones.

CBRE’s head of retail leasing for Australia Leif Olson said while e-commerce was set to grow further, brick-and-mortar stores still played a key role in retail.

“With consumers increasingly wanting a balance between experience and online retailing, omni-channel (strategies) offer both worlds and therefore finding a balance between the two will help further position retailers for success,” Mr Olson said.

The process of returning goods will be simplified, the report predicted, with self-driving cars expected to be used for collecting returns from customers’ homes. Shoppers will also be refunded on the spot, rather than having to wait weeks for their money back.

Turnover in the Australian retail sector grew 3 per cent year-on-year in the 12 months to August 2017, according to CBRE’s latest retail market report, with food and beverage the only category performing consistently above 4 per cent.

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