By the middle of the 21st century, several major changes will have profoundly transformed retail.
IA et retail Les centres commerciaux Nouvelle mobilité
As a response to the challenges we’re facing, we are currently defining the way we buy and sell in the decades to come. While meteoric advances in digital technology, specifically artificial intelligence, are opening up ever more promising prospects for retailers, the need to rethink business models and value chains in a sustainable way is pushing forward another vision for the future.
Tomorrow, just as retailers will have to capitalise on new technologies, they will also have to attach greater importance to respecting the environment and ensure they considerably reduce their carbon footprint. Over the next thirty years, what major transformations will reprogram retail? How will retail have evolved?
It’s rather complex, perhaps even risky, to imagine exactly how the Internet will have evolved by 2050. What is certain is that an increase in the volume of data being input, collected, analysed and exploited seems inevitable, as the development of artificial intelligence drives innovation and creates value in this arena, as does increases in computing power and terminal storage capacity. Nanotechnology, quantum computing, generative AI and the cloud are gradually imposing new rules that are driving a considerable acceleration in the digitalisation of all business sectors.
In turn, it’s quite easy, and not too risky, to hypothesise that retailers will have no choice but to take advantage of the progress that has been made. Retail will be even more digitised than it is today, because society as a whole will become more digitised. For brands, this means a much more thorough integration of new technologies into their processes.
In concrete terms, this means that the future’s physical stores could all be connected and systematically networked to form a global sales ecosystem, guaranteeing greater sales efficiency and better stock management. E-commerce platforms could become more automated and ergonomic, be more intuitive and efficient to navigate, and be able to process more orders. Harnessing more data using more efficient and exact algorithmic software would refine offer personalisation to a very high level, and individualise marketing strategies to the extreme, in order to propose more memorable and fluid tailor-made shopping experiences. As Valérie Candeloro, the Marketing Director for France at Mood Media, a world leader in in-store media solutions, explains, this is a current trend that is likely to speed up through digitalisation: « Retailers are reinventing themselves and we can clearly see a new type of commerce emerging around bespoke service, immersion, community and convenience. »
However, by the middle of the century, at a time when carbon neutrality will no longer have to be simply a goal but a concrete reality, the way retailers use digital may have changed radically. The need to reduce digital pollution has every chance of forcing retailers to adopt virtuous, lower-impact solutions. This means that platforms and sites will have to be eco-designed to run with the least possible bandwidth and without updates, and that refurbished terminals will become the norm. This also means that the use of AI, which is particularly intensive in terms of energy use, will have to be optimised and strictly controlled to avoid excessive consumption. Taking things even further, retailers may adopt a more economical approach to IT by pooling their tools, software, servers and devices, as is increasingly the case, in order to reduce environmental costs. Rather than duplicating equipment, the goal will be to implement a collective organisation, with the same application, the same tool, being used in several outlets, several departments and several services.
This new deal in retail digitalisation will, however, have to contend with the far more harmful influence of global warming on the economy, which will disrupt established ways of working.
As global supply chains are increasingly affected by rising temperatures and extreme weather patterns, to the point of becoming inoperable and unable to deliver goods on time and at the correct price, thus rendering any marketing strategy uncertain, retailers will be forced to resort to local sourcing, from subcontractors and suppliers located in the same geographical area as them. In this respect, the World Meteorological Organisation (WMO) anticipates that natural disasters, the occurrence of which has increased fivefold since the 1980s, will disrupt strategic transport routes with ever-increasing intensity, reducing the loading capacity of container ships and destabilising freight. Logistics will clearly have to reduce its scope of action.
By 2050, this narrowing of value chains, whose aim is to guarantee operational functioning of distribution circuits and points of sale, will have led to not only the emergence of a retail sector that is more resilient in the face of climate change, with their operations rooted in the heart of their regions, but also more ecological as it is more economical in resources. Shorter supply chains will be a powerful factor in reducing CO2 emissions.
Furthermore, this retail, now largely de-globalised, will need to have completed its energy transition. By the middle of the century, as part of the Paris Agreement and the low carbon strategies put into place by industrialised countries to curb rising temperatures, retailers will have to prioritise solar panels to power their stores, and the use of electric motors to power their delivery vehicles. On top of this, and depending on the location of their points of sale, retailers could also take advantage of other renewable energy sources, whether geothermal, biomass, wind or hydro-electric.
This local, low-CO2 retail represents a paradigm shift, but there is still one thing we need to at least consider if we’re going to set out our vision for the future of retail.
In the decades to come, the ongoing depletion of critical metal resources, whose mining will become increasingly difficult and costly over the years, will have mechanically reduced industrial capacity, affecting the production of consumer goods. In 2015, almost ten years ago, Ugo Bardi, a Researcher and Professor of Chemistry at the University of Florence, was already discussing this downward trend: « Extracting minerals now requires 10% of the world’s primary energy, that’s huge – three times the world’s nuclear production! – and it’s still rising. The age of cheap minerals is over, we can no longer afford to waste them. » Since then, the situation has gotten much worse, and technically and economically exploitable stocks are dwindling dangerously. In tomorrow’s world, they will be reduced to almost nothing. By 2050, barely 10% of the aluminium, copper and cobalt contained underground will remain. Fewer metals will necessarily mean fewer new products to manufacture, assemble and sell.
Added to this is the fact that the gradual phase-out of hydrocarbons, both as a source of energy and as an industrial input – an essential condition for decarbonisation – will complicate the marketing of a large number of consumer goods that include petrol in their production, and the list is long… From clothing to cosmetics, toothpaste to adhesives, and glasses to household appliances.
In reality, the current shift towards second-hand goods, with a significant increase in remanufacturing by many retailers, not only plays an ecological role but, like the idea of sustainability, is also intended to guarantee continuous retail in a world where new products will become rare, perhaps even the exception. This is why, in the future, the retailer’s main activity could be selling services. As the supply of new products decreases, retailers will have to redirect a large part of their offer to repair, servicing, advice and maintenance.
By 2050, in a world with an unstable climate, retail will have redesigned its organisation and changed the way it operates, without really having the choice to do things differently. It’s time for the sector’s stakeholders to make the necessary changes, because just as the various future disruptions are already known, so too are the various solutions we can implement.
