Technology is transforming the retail sector. Developments in the pipeline in artificial intelligence, virtual reality and innovative delivery systems will by 2030 enable dramatic changes in consumer behavior, challenging the economics of many retail business models and rendering some obsolete.
If retailers are to avoid being left behind, they must act now. At present, most view their businesses through the lens of a three to- five-year strategic planning cycle, preparing predominantly only for the next wave of incremental change within that period. Yet while planning in the medium term, retailers are also making longer-term commitments to retail store networks and format concepts that may prove unsuited to the future of shopping.
In this Executive Insights, L.E.K.’s Geoff Parkin, Dominic Miles and Philip Meier explore the technological advances that are changing the retail sector and their likely impact. This paper looks at the prospects for existing business models and set out the questions that retailers must address to prepare for the future.