What burgeoning technology will really take off in 2020 and what will it enable retailers to do? We put the question to a panel of tech experts.

5G and mixed reality retail

The debut of 5G technology in Britain has the potential to drive a seismic shift in the online shopping experience for UK shoppers. Accenture global retail technology lead Vish Ganapathy points to the growing prevalence of “extended reality” marketing – which combines augmented reality (AR) and virtual reality – that will “provide unique opportunities to reach customers”.

5G illustration

Future Laboratory senior creative researcher Rachael Stott agrees: “With faster connection speeds and low latency, retailers have the ability to connect with shoppers in a virtual world and provide a seamless and inspirational environment in which they can discover, explore and directly purchase goods.

“Selfridges recent ‘New Order’ window activation is a great indicator as to how this new technology could be leveraged. Merging both physical and digital content, shoppers could explore CGI products in the window display and purchase the physical counterparts directly from the window via their smartphone. As we move into the next decade, these omnipresence touchpoints will continue to take hold, and we no longer ‘go shopping’ but are constantly consuming both physical and virtual goods.”

The majority of shoppers may be most familiar with experiencing AR and mixed reality for entertainment – think Instagram or Snapchat filters –however, Ganapathy says it has the ability to drive real sales.

He points out that more than 2 million shoppers have used US interior design firm Houzz’s ‘View in My Room’ mobile app feature, and that those who use it are 11 times more likely to make a purchase.

“If I were a brand, I’d want to figure out the right type of AR experiences you want to create,” says Ganapathy. “Are you just focused on selfies and filters, or something localised or connected to commerce? How are you going to use that technology in the smartest way?”

The upgraded connectivity that 5G offers will connect the dots between social media and physical shopping like never before.

Remanufacturing – reusing waste products

The need for more sustainable retail supply chains and packaging is both urgent and increasingly important to customers, and John Lewis futurologist John Vary predicts it will be a big trend in the year ahead.

“Many emerging companies now create high-end materials from waste sources – plastic, glass, textiles – but also biodegradable materials that create no waste. ‘Remanufacturing’ could bring products at the end of their lifespan back to their original specification, creating a loop mechanism between disposal and production.”

Waitrose has teamed up with Scottish biotech company CuanTec to develop packaging made from langoustine shells to replace plastic film, while John Lewis launched a trial with waste recycling firm Terracycle last year that separated empty beauty products returned by customers into their component parts and recycled them for reuse.

Terracycle has also launched an initiative called ‘Loop’, which allows shoppers to return used product containers for reuse, and has signed up FMCG giants such as Unilever, Nestle and Procter & Gamble to the scheme.

It is a trend that will build a head of steam in the year ahead, bolstered by the government’s launch of a £60m development fund for biodegradable packaging.

Biodegradable seaweed has been used by Lush as a plastic alternative for storing products such as moisturisers. The retailer also develops on open-source platforms to make its sustainability-driven product innovations more accessible to other businesses.

Vary says this will become more commonplace. “Information from sensors and open data are forecasted to help us learn more on how products are made and used,” he says.

Urban production

The combination of shoppers becoming more conscious of how many air miles they have notched up from their weekly food shop and the reality of Brexit limiting access to exotic fruit year-round means 2020 could be the year that urban production sites hit the mainstream in retail.

Big grocers are already leading the charge. Ocado has invested in vertical farming and Marks & Spencer has partnered with Dutch firm Infarm to grow herbs in its refitted Clapham store. More grocers are likely to repurpose urban spaces to grow fresh products.

Vertical farm

It’s not just in grocery where this trend could take off.

Vary says the number of ‘maker spaces’ – physical locations where people gather to co-create, share resources and learn new skills – has increased fourteenfold since 2006 and they are “putting the means of production back into local maker’s hands”.

“This goes further than consumer hype,” he adds

“It is inspiring manufacturers and retailers to decentralise production into local factories that can serve consumers more reactively and with a lower environmental impact. With growing awareness of our responsibility to the environment, we will also see communities continue to utilise underused urban spaces to grow their own produce.”

The Fashion Technology Academy in London is an example of this trend – funded in part by Asos, this 11,500 sq ft space trains over 600 people a year in tailoring and is being used by retail partners including M&S and New Look to source apprentices and source products more locally.

On-demand clothing production and customisation 

Fashion production used to be built on long lead-times and relied on bulk ordering. However, the digitisation of manufacturing is shaking up how retailers produce clothing and paves the way for both on-demand production, rather than bulk ordering products in advance, and customisation.

This is crucial in today’s marketplace where trends grow on social media and can originate from consumers rather than the catwalk.

Mi Adidas

Vary says: “While the perception of factories is evolving from smoky chimneys to smart connected places, new opportunities to transform manufacturing and manufactured goods for the better are on the rise. Digital manufacturing is disrupting traditional fabrication methods: in particular, they make on-demand production and customisation a reality. The steps of design, testing, production and sales are shuffled, consumers are more involved in the process.”

Customisation is growing in popularity, particularly for sportswear brands. Nike, Adidas and Converse all allow shoppers to design their own shoes. Adidas has opened ‘speed factories’ in Atlanta and Germany that enable on-demand production and use digital design to enable mass customisation.

Meanwhile, Amazon has secured patents for a fully automated, on-demand manufacturing system for clothing and Uniqlo is working with engineering firm Shima Seiki to produce knitwear from 3D technology. Uniqlo believes the technology, which it calls Wholegarment, will enable mass customisation.

RFID comes of age

Radio-frequency identification (RFID) technology is by no means new, but Manhattan Associates UK managing director Craig Summers believes 2020 will be the year that it finally comes of age and will enable more store fulfilment options.

The technology is already used by some retailers, such as River Island, to give near-real-time data on the availability of store inventory and the precise location of stock in the store.

Summers says having this visibility of stock can allow retailers to make “smart fulfilment decisions” to meet customer expectations of speedy delivery.

“With the help of RFID technology, retailers in 2020 can turn their stores into fulfilment centres to strategically meet customer demand for convenience and immediacy, but also gather data previously only available online, to deliver an important view of in-store abandoned baskets and items,” he says.

“Meeting the evolving demands of customers is not easy, but when store inventory and fulfilment is done right, complexity evaporates and it provides retailers with the opportunity to deliver on their anytime, anywhere omnichannel promise, whilst being more efficient from a business perspective too – and that surely has to be a win-win for customer and retailer.”

Summers also points out that the technology can be used to help improve customer experience in-store. “For example, if a customer walks into the store to purchase a pair of shoes and requires them in a certain size, the store associate can confidently access store inventory via a handheld device and together, customer and associate can decide if it makes more sense to ship from a store, distribution centre or dropship from vendor.”

Micro fulfilment

“This decade will be characterised by who cracks ecommerce fulfilment in a profitable way,” says Miya Knights, head of insight at Eagle Eye.

Knights believes micro fulfilment, be it from stores or local hubs, will take off in 2020 and beyond and automation and AI will make this possible.

She believes that grocery will be a hotbed of innovation and says there is “lots of activity and innovation from start-ups” in micro-fulfilment.

Knights highlights Locai, a tech firm which brings automatic picking and packing services to the shop floor.

“It’s like transplanting Ocado’s Smart platform into the centre of the store,” she explains. “About a third of shopfloor area becomes fulfilment. Customers order their staples to be picked and packed and they spend their time shopping for fresh.”

Meanwhile, big delivery firms like DHL are opening smaller, logistics hubs in or near urban centres to facilitate faster delivery to customers.