The latest RetailX Global ecommerce 2023 report tracks what’s likely to be important to the retail sector in 2024. It found that political pressure to ‘onshore’ supply chains is only increasing.
Understanding the attitudes that different stripes of governments will have to their domestic industrial bases could become increasingly important in the years ahead.
It is worth noting here that businesses are often more adept at recalibrating supply chains than you might expect. It may be that onshoring will have the biggest effects in areas that are strategically important, notably green technologies, and thus attract tax breaks. Reports of globalisation’s demise may, taking the long view, turn out to have been severely exaggerated.
The 250-plus page report’s look ahead also suggested that the perfect tech stack may not exist. It said it is surprising how many retailers still spend too much time looking inwards. If we can just get the right ecommerce platform, all will be well.
The idea of composable commerce has been much hyped but the philosophical shift here – less emphasis on enterprise-level software, more on thinking about the tools needed to get specific jobs done and to make the most of opportunities – is one that many retailers have yet to make. And arguably, one that they should.
Additionally, the report looked back at 2023. The previous report had highlighted four areas to look at:
- The changing face of town and city centres
- Don’t get caught in the middle
- Privacy matters
- Virtual currency woes
To take each of these in turn, we argued that the way we use our town and city centres will change, partly as a result of consumers doing more of their shopping online. Clearly, that process is still playing out.
One thing we perhaps under-emphasised last year was how all those town and city centre offices have become part-time destinations for so many of us. At the very least, the rise of hybrid working is a key development for multichannel retailers trying to work out where in the world they should be located and how large the retail footprint should be in a specific area.
This development, though, is occurring at the same time that a new urbanism is on the rise. The way the 15-minute city has got caught up in the culture wars is in part a result of a backlash against the popularity of the idea by those who don’t like it. Forget the noise and fuss of X warriors, there’s plenty of evidence that eventually the 15-minute city will become the norm. But what kind of retail space do you need in such a city? It’s a question multichannel retailers should be thinking about.
Moving on, the middle ground within retail remains as difficult as ever to occupy successfully. Related to the above point about serving customers, retailers with a sense of who their customers are and how best to serve them will succeed. Trying to be all things to all people continues to be a risky strategy.
Privacy matters, we argued last year, and further argued the effects of the European Union’s General Data Protection Regulation (GDPR) had been underappreciated. That’s still true and we would add that maybe businesses need to pay more attention to the role of regulators. The way Microsoft had to jump through hoops to complete the acquisition of Activision Blizzard was particularly intriguing if you stopped to think whether it would have been so difficult for the software behemoth if the same deal had gone through a decade ago. Probably not.
Finally, we recommended keeping an eye on the cryptocurrency sector, suggesting that problems in the sector may lead to more regulation. The ongoing FTX trial suggests there are certainly issues here but also, considering the sums involved and the noticeable lack of contagion of the wider financial system, makes us wonder if we might have overestimated the sector’s importance.
At the risk of sounding cynical, maybe the cryptocurrency sector is, at least as yet, a playground for money nerds that needn’t concern the rest of us too much.
This excerpt is from a feature authored by Jonathan Wright, which appears in the RetailX Global ecommerce 2023 report.
One of RetailX’s flagship publications, it is aimed both at those already trading in different markets and at those considering expanding into markets where the challenge is to compete with established businesses.
Download it in full here.