Jones Lang LaSalle has issued the following part of the Retail 2020 study; Online Gold Rush. Retail 2020, which was launched on 27th May via a bespoke interactive website, examines the rapidly changing global retail landscape over the next ten years.
Online Gold Rush explores where the next generation of online retail innovation will originate from. It considers the apparent paradox that new retail entrepreneurs may well lack retail experience, yet some will go from "zeros to heroes" in a matter of months. Online Gold Rush also looks at why some traditional bricks-and-mortar retailers have been slow on the uptake to move online, what they need to do to embrace the opportunities offered by the internet and how this may require a radical new business model.
Online retailing is still in its relative infancy, but over the next decade the retail landscape offered by the internet will dramatically change, with barriers to entry radically reducing and convenience to consumers increasing. Whilst many store based retailers are already embracing the power of online shopping, few have launched entire new businesses and business models on the internet. Over the next ten years real innovation in retail will happen online, and will be led by “non retail” entrepreneurs new to the market. These entrepreneurs will revolutionise consumer’s retail experience through new sales techniques and the delivery of goods, payment systems and return policies.
For established players to match the competition that will arise from these new retail entrepreneurs, traditional retailers will need to be truly adaptable to changing their operating format but will also need to recruit a new generation of “digital” savvy employees.
Online shopping portals obviously do not have to worry about the operating costs of the high street or shopping centres, however this does not mean that property will become obsolete for retailers. While embracing the internet offering is crucial to business models and a process of re-evaluating existing real estate portfolios and property requirements is inevitable, a physical presence for retailers will still be necessary. However, this physical presence will have to evolve and provide consumers with compelling retail experiences while also satisfying the craving for variety with innovative leisure and catering facilities. New property requirements will also develop, for example distribution hubs to satisfy online orders. We could also see online retailers taking up space in retail locations to bolster brand awareness.