Welcome to the future of retail
What will shopping be like in the year 2030? Will climate change make some products hard to find or much more expensive? What role will traditional brick-and-mortar stores play in an age of growing e-commerce? We answer these questions and many more in our “Future of Retail” study, examining what consumers want and what retailers should do today.
“We’re witnessing a major demographic shift between now and 2030: the numerous Baby Boomers will retire, while more and more of Gen Z will be starting their careers. Preferences held by ‘digital natives’ will thus become increasingly visible in retail too – in areas such as sustainability and innovative technology.”
Our study: an overview
Previous publications in the “Future of Retail” series
Part 1: Retail 2030 – four consumer trends for tomorrow’s retail market
Four consumer trends will play a major role in shaping the future of retail. The first is growing diversity of lifestyles and consumer preferences, driven by demographic shifts and immigration. The second trend is an economic one: consumers are set to remain very price-conscious, but will also be increasingly prepared to spend money on branded products. On top of this, AI-powered tech is increasingly gaining acceptance and is creating new ways of increasing convenience, combatting the skills shortage or better serving rural areas. Finally, sustainability will become ever more important, driven by consumer demands from Gen Z and pressure from regulators.
Part 2: Future of retail – five areas of action for retail 2030
Five key factors will determine the success of retailers in 2030:
1. Customer focus
Customer focus means offering customers a highly personalised and seamless shopping experience across all touchpoints. Brick-and-mortar stores will continue to play a key role, as they offer an experience and serve as a place to pick up products. But for personalised customer contact, retailers need a suitable data strategy and a customer data platform.
2. Cost effectiveness
New revenue streams and cost-saving measures are a hot topic for retail: cost pressure remains high, against a background of intense competition, low margins in many sectors and increasing costs – particularly for staff. Retailers need to operate cost-effectively in order to strategically develop business models and make necessary investments.
3. Omnichannel enablement
Convenient and seamless shopping experiences across all touchpoints are becoming the norm. Although personalised shopping experiences are already perfectly feasible at the frontend, omnichannel excellence will also require a supply chain that can provide flexible, cost-optimised responses to customer demands while also staying on top of the basics such as stocking, resources, and efficient processes and logistics.
4. ESG compliance
Sustainability considerations are becoming the norm in many product categories, in part due to regulations, and sustainable products are displacing conventional variants. Companies must ensure that their supply chains are transparent, and must demonstrate sustainability in complex supplier and sales networks in a clear, measurable way. Non-compliance can result in severe penalties and endangers companies’ reputations.
5. Technology fit
Technology is becoming increasingly important as the backbone of retail – for intelligent stores, cross-channel shopping experiences and automated processes throughout the supply chain. Retailers need to invest heavily in their IT infrastructure and become faster and more agile in order to really take advantage of the opportunities offered by AI and other innovative technologies.
Four trends that will shape retail consumption of the future
- Growing diversity
- Price-consciousness
- Innovative tech
- Sustainable consumption
Growing diversity
Consumer lifestyles are becoming increasingly diverse, driven by demographic shifts and immigration. This will lead to more heterogeneous consumer preferences, varying shopping habits and an increasingly fragmented customer base.
Price-consciousness
Price-consciousness is set to remain high, while brand loyalty will decrease. However, lifestyle products will be an exception to this trend, with high prices being less of a deterrent for potential customers – or even making products more attractive.
Innovative tech
AI-powered digital tech is set to become a game-changer in retail, opening up new opportunities to make life more convenient for consumers, combat the skills shortage or better serve rural areas.
Sustainable consumption
Consumers are becoming increasingly sensitive to climate change and its impacts. Pressure from Gen Z and regulators will continue to push eco-friendly retail practices further into the mainstream.
“Retailers’ success in the market of the future will depend on their ability to focus on the right areas and strike the right balance between customer orientation and cost effectiveness in their business models.”
Dr Christian Wulff,Consumer Markets Leader Germany and EMEADownload this study
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Methodology
The “Future of Retail” series is largely based on surveys and analysis conducted for the following three PwC studies:
- Voice of the Consumer 2024: For this study, we survey around 20,000 people in 31 countries worldwide twice a year.
- Generation Babyboomer: This study surveyed 1,000 55-to-75-year-olds from Germany in 2023.
- Fachkräftemangel im Handel und der Konsumgüterindustrie (Skills shortage in the retail and consumer industry): This analysis from 2022 is based on data collected by the WifOR Institute and the German Federal Employment Agency.
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