These days, retailers are nervous and with good reason. The COVID-19 pandemic caused consumer behavior and technology to leap forward. Many retailers are struggling, while the Amazons and Instacarts of the world have charged ahead. The Amazon effect is rippling through our economy at lightning speed. It’s changing technology, raising expectations and turning retail inside out.

After the upheaval of the past year, no one is eager to take big risks. So, retailers and brands are doing a lot of brainstorming and not a lot of advancing. We understand the desire to hesitate. But we also see huge opportunities for those retailers that lead the transformation and shape the future. One thing is certain: The future of retail is going to look and feel a lot different. And the retailers at the forefront will not only have the most control, but they will also have the most to gain.

So, what does the future of retail look like? While we’re neither retail economists nor fortune-tellers, we do have some ideas about the future of retail. It starts with recognizing what’s not working, and what shouldn’t be working. Once we address the challenges of the present, we can shift towards future possibilities. By our predictions, these include more convenience, more personality and a lot more fun.

The Challenges Facing Retail Today

Brick-and-mortar stores are simply no longer viable as a transactional shopping destination. There are two main reasons: price and convenience. Same-day delivery, next-day delivery, and free shipping and returns have pulled the rug out from under traditional retailers. The fact that a retailer has inventory available to purchase in-store is no longer a competitive advantage. Not when so many items simply show up quickly and effortlessly on our doorstep.

Equally disorienting for physical retailers is the fact that consumers are becoming experts at comparison shopping. These days, we all walk around with computers in our pockets that give us instant access to a global database of prices. So, even as fewer people are shopping in person, those who are may visit a store to interact with a product, then turn around and purchase it online at a lower price.

Traditional retail is facing a number of threats. But, that doesn’t mean that the entire institution is doomed. In-person shopping does indeed have advantages. They aren’t what we see in brick-and-mortar stores today.

Stores of the Future Will Not Be for Shopping

As shopping becomes more automated, fewer people will actually go shopping. This means that retail stores will have to rethink how they use their physical space. Instead of evaluating stores in terms of revenue per square foot, retailers will need to consider how their physical space works for attracting and growing their audience.

The future of retail will be less about shopping and more about recreation. Tomorrow’s brick-and-mortar stores will trade in promotional pricing calendars for audience-driven event schedules. After all, people will always want something to do. Successful retailers will be those that check more than one box: a place to entertain the family, get inspired, learn something new, interact with a community, and browse and buy products.

Consider the success of stores like Ikea and Camp. While at different scales and complexity, both stores have given shoppers “something to do.” Both stores are designed with room for events, activities, and inspiration, as well as space for products. Starting today, retailers and brands should begin to think beyond merchandising towards brand experience. This involves big thinking, big investment, and big risk. But it will pay off for those who do it well.

Retail Gets “Phygital” with Advanced Technology

We all know that technology is changing everything. What really matters is how willing you are to embrace it. Once you get on board, you can start to envision how technology can simplify and satisfy the buying journey. Innovative retailers are no longer thinking about integrating digital and physical channels, they are adopting “phygital” strategies that blur the lines completely. Amazon Go is a perfect example. It’s a physical store that offers transaction-free shopping, also known as “Just Walk Out Shopping.” Amazon Go has developed a way to shop with no checkout and no lines. And if you think people aren’t going to love this, go stand in a line.

The transactional side of retail is a complete drag. Checkout lines and broken shopping carts should have been eliminated years ago. With the widespread adoption of smartphones and retailer apps, we expect their days are numbered. We imagine a future retail environment where you can browse and buy without a wallet, a cart or a wait. Simply browse, scan and purchase, and the products either meet you at your car or at home.

Believe it or not, this isn’t a radical idea. Our own Greg Corey once worked as a porter for JCPenney. His job was to pick products and load them in shoppers’ cars. We also see this in the growing number of stores offering curbside pickup, even home improvement retailers like Ace Hardware. The point is, parts of the retail experience broke down a long time ago. Now that the technology exists to fix them, retailers will have a shopper mandate to do so.

Rebuilding the Humanity of Retail

Personalization is not futuristic; it’s happening now. But even as shoppers have their every physical need anticipated by algorithms, they still have emotional needs. If we learned anything from COVID quarantines, it’s that human connection is important. Retailers need to capitalize on this by doubling down on personality and service.

We all know how creepy it is to think that an algorithm has us figured out. Meanwhile, it’s incredibly reassuring when another human being understands what we need. For that reason, retailers that can deliver human connection in the form of next-level customer service will attract in-person traffic. If you’ve been to an Apple store, you know how nice it is to have an appointment and to be greeted by name.

In fact, we won’t be surprised if the transactional roles of today’s retail associates become obsolete. Imagine tomorrow’s retail associate emerging as a brand concierge, a highly trained and service-minded expert in uniform. Think back to the Apple experience, where a “Specialist,” “Expert” or “Genius” is assigned to your case. This particular level of elevation may not work for all brands, but the general idea of elevation and personalization is compelling nonetheless.

Retail Gets Collaborative with Help from Influencers and Brands

As the digital world becomes more saturated, brand awareness will become more competitive. Influence may quickly become the secret weapon of commerce, as retailers seek to grow their audience through non-traditional channels. The familiarity that people have with certain celebrities and brands will be an important lever for retailers to activate. Because of this, we expect to see two trends emerge. The first is the rise of influencer events in retail. The second is the development of collaborative, cross-branded product lines.

We are already seeing the impact of influencers on shopper behavior and trends. What we expect to see in the near future is more creative ways to use influencers to drive traffic. Remember the section above on in-store events and experiences? Influencers could play a key role in such strategies.

The appeal of influencers is obvious. They are both exclusive and accessible. This same formula can be applied to brands through effective collaborations. We’re seeing this today. Have you seen the Hearth & Hand shop in Target? How about the Gap Home collection at Walmart? Exclusive, co-branded product lines are nothing new. What is different here is the dedicated floor space, branded merchandising, seasonal promotions, and experimental partnerships.

These crossover experiences give retailers an exclusive product from a well-known brand. In exchange, the brands get exposure on the retailer’s website. In the case of big retailers like The Home Depot, Lowe’s, Walmart, Target and Amazon, they’re essentially retail search engines. We expect that all retailers will be forced to rethink floor space, with more store-in-a-store environments.

Really Great Branding Pays Off

As retail gets more experiential and collaborative, branding will get more risky and complex. Retailers and manufacturers alike will need to think beyond logos and products. Tomorrow’s brands will need to possess an authentic, compelling, multi-dimensional identity. Brands that get it right will thrive. Brands that don’t, won’t survive.

If you’ve got a crystal ball, now would be a good time to consult it. Better yet, brush off your brand guidelines and take a fresh look. What do you see? Are you ready for the phygital era? Can you imagine your brand as an experience? What does it mean to deliver personalized service to your audience? Who might you join forces with to expand your reach? If you can answer these questions easily, that’s great news! If not, it’s time to get creative or get some help positioning your brand or store for the future.

See What’s In-Store in the Future

We don’t have a time machine, but we do have mad illustration skills. Download our Future of Retail infographic to see our predictions illustrated.