The future of retail: global trends that will shape the next 5 years

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If retailers have learned anything in recent years, it's how to stay resilient in a disruptive economic environment. There's no doubt that the road ahead won't be easy, but Google's goal is to help retailers and brands navigate the uncertainty .

To achieve this, the company partnered with Kantar and Bain to analyze shopper behavior. Together, they identified 4 key trends that will characterize the retail sector in the next 3 to 5 years.


Shopping has become an environmental experience

Today’s consumers move between digital, physical, kazakhstan phone number material virtual and social platforms, seamlessly transitioning from browsing to research and purchase. This omnichannel shopping behavior will continue to evolve as it moves from a discrete task, where people search for a specific item on a specific channel within a defined time frame, to an ambient experience.

People will discover new products and services while browsing social media, streaming video or playing video games. So the next phase of commerce will be less about consumers' choice of channel, but rather about how closely retailers can get closer to consumers and the places where they spend their time – spaces where demand, discovery, choice and consumption occur.

Retailers must therefore consider how they want to appear as the lines between commerce and content blur even further. Experiences based on augmented reality and virtual reality, along with shoppable videos , will become increasingly important as consumer appetite for technology-based shopping experiences increases.

Younger shoppers are currently the biggest adopters of technology tools. They are 2-3 times more likely to have purchased using emerging mediums such as social media, virtual try-ons and live streaming.

The right customer and the right message will be a moving target. Marketers must rely more on Artificial Intelligence (AI) to stay agile and quickly adapt to the continuous changes in channel touchpoints and content selection. Solutions like Performance Max campaigns (powered by Google AI) can help marketers maximize performance across all Google channels.


As brand loyalty fades, the value of associations grows

Brand loyalty will take a backseat as shoppers choose companies and products that better align with their personal values ​​and requirements. In fact, consumer expectations around personalization are growing, with 73% of shoppers expecting brands to understand their unique needs and aspirations.

Retailers and brands that want to have a better chance of retaining their customers must innovate their offerings by establishing partnerships and collaborations. Indeed, a number of intermediaries are already becoming important players in the retail landscape. These include super apps, such as Rappi in Latin America or Grab in Southeast Asia, that centralize different customer needs in one place, buy-now-pay-later financial providers such as Affirm or Klarna, loyalty aggregators, social media apps, and last-mile service providers.

According to Allied Market Research, the global autonomous last-mile delivery market will reach USD 90 billion by 2030 . At the same time, marketplaces will account for 45-50% of online spending by 2025 . These numbers highlight why retailers need to find the right partner that can help them differentiate themselves and offer customers better shopping experiences.


Generation Z is the new driving force of shopping

Generation Z accounts for almost 30% of the world's population and is expected to make up 27% of the workforce by 2025. They are also the first generation to have been fully raised in a digital world, spending more time online than any other group. Their purchasing power is also on the rise.

Retailers need to appeal to Gen Z’s specific habits and preferences, such as how they seek information from trusted sources online. Gen Z and millennial consumers are twice as likely as older shoppers to say that watching an online video was their most influential shopping activity. Specifically, YouTube is more likely than other video and social media platforms to meet Gen Z’s core shopping needs , whether they’re making a quick decision for an impulse purchase or need guidance and trusted information for a more thoughtful purchase.