“Screenless shopping is the future”
Screenless shopping thanks to the new generation of virtual reality glasses or contact lenses, drone deliveries, experience stores, and automated retail concepts… The future of retail looks very promising, according to Dutch futurist and trendwatcher Richard van Hooijdonk. “Within the next three to five years, major changes will take place. Companies must take action now to future-proof their business.”
E-commerce and artificial intelligence (AI) are increasingly shaping consumer purchasing behaviour. In addition, AI can help companies make their processes more efficient and reduce costs. According to Richard van Hooijdonk, the opportunities offered by emerging new technologies and tools are endless, yet we are still making far too little use of them. The Dutch trendwatcher and futurist travels the world to closely examine and test the latest technologies and retail concepts firsthand. A conversation with a man for whom drone delivery and online shopping in a gaming world are just the tip of the iceberg.
How do you look back on the past year?
I think retailers are still recovering from the coronavirus pandemic. Over the past two to three years, the high number of bankruptcies has continued. In Belgium and the Netherlands, quite a few retail chains have run into trouble because they didn’t adopt a digital strategy in time. Take BCC, for example (a Dutch electronics retailer owned by Mirage Retail Group, ed.). It was a very large chain with around 700 stores, but it went bankrupt a few years ago, while its competitor Expert has grown by as much as 500% precisely because it has gone online, developed an app, and made home delivery incredibly easy.
You see people making the transition from offline to online. More and more is possible online: better apps are being developed, more data is available, and people can predict when we are going to buy things… It has become very easy for us to make our purchases online. For example, you have Google and Google Shopping, but now you also have AI assistants. There are also shops where you can place orders via AI. If, for instance, you are having a conversation with ChatGPT about sports and football boots, it becomes very easy to add a reference to the Nike brand within that conversation and point to the nearest store where you can pick up the shoes, or have them delivered by drone.
Consumers are clearly looking for a multichannel approach: they prefer to buy online because of the convenience, but when they do go to a physical store, they are primarily looking for an experience. We are clearly evolving toward a world of experiential shopping.
What does that mean in concrete terms?
Physical stores will evolve into experience stores in the future. You can see this, for example, in the Dubai Mall, the ultimate example of future shopping. Nike has a store there: you don’t go there to buy anything, but to experience basketball, and you can talk to shoe experts and top athletes. Another example from Dubai is a supermarket where I shop regularly, a kind of Walmart-style concept. In the fruit and vegetable section, for instance, there is a greenhouse where fruit and vegetables are grown on-site. In addition, there are robots that come to you to guide you to the right aisle. That creates a great experience. It’s much more than an ordinary supermarket. In the Dubai Mall, you can clearly see that people don’t necessarily come to shop, but to have a good time. In the future, it will become important for retailers to come up with concepts that make people enjoy their visit.
In the Netherlands and Belgium, you can also see experience becoming more prominent in stores. For example, there are many (children’s) clothing stores or opticians such as GrandVision, where a DJ is present on Saturdays and where people can enjoy food and relax. The “meet me at the mall” concepts – concepts designed to bring people together and let them have a good time – are very popular. Businesses make a lot of money from them.
So our way of shopping is changing?
That’s correct. The shopping streets in Belgium and the Netherlands are changing as well. For example, you can now also find physiotherapists, municipal services, and other non-retail functions in shopping streets… Shopping centres themselves are increasingly becoming more like service hubs, creating a very different environment.
At the same time, a second trend is emerging in physical retail: people no longer want to be assisted by staff. Research into the importance of personnel in stores shows that 90% of shoppers simply want to do their own thing. In concrete terms, this means that physical retail in the future will split into experience stores and autonomous store concepts like Amazon Go, where there is no staff, no checkout counters, and no queues. The autonomous store of the future is a robotised store with sensors and cameras that knows who you are. You move from human customer service to AI companionship.
How is it that consumers no longer feel the need for physical contact?
That is mainly due to convenience. Online, it’s so easy to watch videos of the clothes you might want to buy, or to purchase a piece of furniture that you can place virtually in your own home via IKEA’s website. There are so many tools in virtual reality that can show you what a product looks like in real life, so you can better visualise your purchase. Take the automotive sector, for example: 30% of cars are bought online without people ever having seen the car in person. What’s more, you can use an AI agent that knows you and can show you all sorts of options within your budget, create your outfit in real time, compare prices, and more… That’s not possible in a physical store.
Thanks to e-commerce, it’s also become very easy to get products delivered quickly or to return them. So why would you still go out to a shopping street in all kinds of weather, where you can barely find parking and where it’s often far too crowded for your liking?
However, that doesn’t apply when it comes to exclusive products. People still go to physical stores for a very expensive watch or for products that truly require advice. In short, we don’t want human interference, but we do want human assistance when we need it. It also depends on the target group: many older people still like assistance and, for example, still go to a traditional optician or clothing store where they can get help with their purchases, whereas the younger generation does more of that online.
How will the role of the supermarket evolve in the future?
The supermarket is something we need every day, so I don’t see it disappearing anytime soon. Supermarket revenues are also continuing to rise. What you do see, however, is that the supermarket business model is starting to change: they are increasingly becoming fresh food markets, like those in Riyadh and Abu Dhabi. There are sushi areas, fish markets, greenhouses, dry-cleaning stations, and they have their own kitchens for fresh meals… So they are taking on more of a neighbourhood function. You get a kind of market that creates a more welcoming and enjoyable experience, something people are more than happy to come to the store for. The same applies to food squares, which also focus strongly on experience.
On the other hand, there are also many people who prefer to have their products delivered to their homes within a very short timeframe – the so-called ultralogistics, as seen in Dubai. There, you can have your products delivered to your door within fifteen minutes by inexpensive couriers on mopeds or by drones, or via small robots that transport products from point A to point B, as is also done in Miami. So, ultralogistics will indeed become a threat.
“We need one major crisis, and then companies will spring into action. Look at the coronavirus pandemic; it has also sparked innovation in Belgium.”
Is the Belgian market ready for this?
At the moment, not yet. First of all, we still need to wait for new aviation legislation that will make drone delivery possible in Europe. In addition, there is currently no collective distribution network here that uses taxis, drones, vans, scooters, and bicycles to quickly transport products from point A to point B, as is already the case in Dubai. It’s a kind of flash-delivery concept, but very well developed and fully technology-driven. Companies make money through a combination of revenue streams, large volumes, and the use of extremely cheap freelance labour – mainly Pakistanis working for starvation wages. Such a system does not yet exist in Europe.
Moreover, the European market is far too slow. Progress is painfully sluggish, which means we have long since lost the battle with innovative countries like China, India, the United States, and the Middle East. That in itself isn’t necessarily a problem, but if you want to remain competitive, you will have to keep up with the big players. Belgians, by the way, are even slower in this respect than the Dutch. The biggest problem is that we are simply spoiled. We are not built to change. We’ve been doing the same things for 30 years. Everything is running smoothly. The pressure isn’t high enough yet. So why change? We need one major crisis, and then companies will spring into action. Look at the coronavirus pandemic; it has also sparked innovation in Belgium. I therefore call on companies to wake up. They urgently need a kick in the backside and to pick up the pace!
Where do you still see opportunities in online shopping?
I see them, among other things, in gaming. Seventy per cent of young people play games, so this is still a huge market with a lot of potential. What we’re seeing today is that large companies like Walmart are building shopping infrastructures within gaming environments. Combined with the strong rise of virtual reality, including Meta glasses, this means we are evolving toward a world of screenless shopping. Through the latest VR glasses and contact lenses that work with holograms, gamers will enter a world known as a “Mixed Reality Gaming Shopping Experience,” where they can move from Zalando to Fortnite and back again. Let me give you an example: a teenager playing a game might see a hologram of a famous fashion designer presenting their latest designs, after which they can purchase them or compare prices online. This is, of course, a very engaging way to bring the real world closer. In that environment, you’ll also receive rewards, badges, and points that you can save up for outfits. So the online store of the future will look very different from what we are used to today.
At the moment, a great deal of money and time is being invested in making ever smaller VR glasses or contact lenses with more information. For example, such glasses can already monitor your body’s health via your iris, and this will only continue to develop further.
“A study by McKinsey & Company shows that if you were to redesign your retail organisation today according to the guidelines of the AI-first organisation, you would build a very different kind of organisation that would deliver 20 to 30% higher returns.”
This doesn’t seem like something for tomorrow…
That’s right, these developments do take some time. In fact, research has been done on how long it takes a company to implement major changes like these, and it turns out to be five to eight years. But I’m more optimistic. If you look at the new generation of VR glasses being developed by major companies like Ray-Ban, Meta, Google, and Apple, they’re truly fantastic. I think that within three to five years, there will already be a real business model with apps. So, over the next three to five years, major changes are going to happen. Retailers must seize this moment to future-proof their businesses and stay ahead of the curve. A study by McKinsey & Company shows that if you were to redesign your retail organisation today according to the guidelines of the AI-first organisation, you would build a very different kind of organisation that would deliver 20 to 30% higher returns, because you could automate all those repetitive and predictable back-office tasks with agents. In addition, agents can also help with customer issues: for example, they can ensure a more efficient refund process. In the long run, you’ll see dramatic savings in the back office thanks to this technology.
It’s important for companies to realise that the world is changing, manage their uncertainty, and embrace new technology. This will help them reduce costs and increase their returns, because running a store is expensive by nature. Companies also need to experiment extensively with this technology in order to develop the shop of the future. If they’re not on board now and don’t fully understand how the technology works, they’re in trouble.
Are there other trends besides screenless shopping that companies shouldn’t lose sight of?
Absolutely. Social media is becoming increasingly important: for a large target group, it’s the primary resource. As a company, you simply have to be present there. Shopping via TikTok will continue to grow in importance, so companies need to adapt to this. In concrete terms, this means they might have to rename their supermarket manager to a TikTok manager, so that consumers also get to know the people working in the store. You need to build a relationship with your customers to draw them into your store.
On the other hand, I also see trends like sustainability fading into the background. The topic has disappeared from the boardroom table because it has largely already been integrated into organisations through sustainability managers, coordinators, and similar roles. In addition, if you set up your company very efficiently, automate processes, and make use of AI, you can produce more efficiently and reduce emissions. So I have the impression that we’ve already passed the peak of sustainability. The topic is no longer number one on the board’s agenda, but companies are still being held accountable for it and judged on it.
And yet you see that second-hand platforms like Vinted are still booming.
That’s true. It’s a real trend that will definitely continue to grow in importance. Buying second-hand clothing is very hip, and it no longer makes you feel that you’re poor or down on your luck. Second-hand top brands, in particular, will become even more popular in the future. Nobody wants a second-hand Zara or H&M, but a second-hand Gucci or Chanel – that’s a different story. That will only become more popular in the coming years. All teenagers want to wear designer clothes – you see it on TikTok – and platforms like Vinted make them more affordable. There, you can pick up a bag that originally cost €800 for just €400. Not bad at all.
Which innovation are you most looking forward to in the future?
The super agent. In the future, you’ll get a combination of reality and the visual world of the future, which will shape itself based on the abundance of available data. The super agent will even be able to read my brain if necessary, perceive my needs, track my eyes or voice, and thus gauge my purchase intent. So that is extremely interesting.
I’m also looking forward to quantum computing; that’s going to be something huge. These are computer chips that can calculate millions of times faster, resulting in enormous computing power and super-intelligent robots. Buckle up, because there’s a lot of promising stuff still to come!
But aside from the new innovations I’m excited about, it will be important to think together about how we want to shape our world. Which developments do we welcome, and which do we say no to? Technology may be capable of anything, but should we allow everything? These are questions we need to consider together.
Which companies should we definitely keep an eye on in the future?
Large chains like Nike, Zara, GrandVision, and the like have considerable investment power and are already very advanced when it comes to technology and experience. Retailers like Walmart and Carrefour are also experimenting extensively. Still, I personally look more toward OpenAI and Fortnite, particularly the development of online shopping within the gaming world. It’s also remarkable to see how OpenAI, with ChatGPT, is drawing search demand away from Google. That said, I would definitely also keep an eye on Google and Meta when it comes to their latest tools.
So I think you really need to go looking for the new kind of retailer, and that could be you. But then you have to do two things. Over the coming years, you should bank your profits and make sure you use that money to experiment and to develop future scenarios. In addition, you need to collaborate with other retailers. That is why this is a call to the industry associations to finally come up with a future-oriented proposition to help entrepreneurs, because they cannot do this alone, and they need support. Finally, I urge companies to think carefully about whether they should raise external capital. Many investors are willing to inject money into successful retail chains, but those chains have to be prepared to develop the next-generation formula. If companies follow these three pieces of advice, they will be very successful in the long run.
Lisa Goethuysen