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Our Predictions for Retailers Show More Change Ahead

By Robert Hetu | December 09, 2019 | 0 Comments

Technology and Emerging TrendsRetail Trends

Customers are demanding greater levels of contextualization of products and services. Retail CIOs can leverage intelligence to capture deeper insights, anticipate customer needs and proactively deliver across every touchpoint. Retailers must reinforce their store’s position as an integral part of delivering unified commerce. Our recent research Predicts 2020: Consumers Determine Retail Success Well Before the Sale expands on the 5 predictions from our Gartner team on the future of retail.


Why these predicts are so important

The retail industry continues to transform through a period of unprecedented changes, with customer experience fast becoming the new currency. The digital disruption caused by new technologies and a shift in customer expectations continues to challenge traditional retail models. However, beyond the movement toward customer centricity, a new landscape is emerging across all segments of retail.


Tight labor markets and disruptive technologies have caused retailers to investigate new human-machine hybrid operational models. These models are built on the foundation of AI and automation technologies to assist human workers in streamlining and optimizing efficiency and accuracy in tasks such as warehouse picking, inventory management and customer services to boost productivity.


The level of investment for digital transformation efforts continues to rise, forcing retailers to find alternate sources of funding beyond cost optimization efforts. Inventory reduction provides a clear opportunity for funding if “dead” inventory can be reduced. This will require a delicate balance of inventory management, particularly in the store, as buy online, pick up in store (BOPIS) remains a popular choice for consumers. Many retailers are now leveraging their existing store estate as local fulfillment hubs to mitigate the rising costs of last-mile delivery. Furthermore, retailers now have the challenge of predicting demand and aligning inventory at a localized level to support customer expectations for same-day in-store pickup or same-day delivery option. Retailers must also further investigate new models to profitably deliver against the growing needs of online shoppers and make their networks of stores less of a financial constraint

Digital Workplace

This will require a focus on associate training and development, including upskilling in-store associates to perform a wider variety of specialized tasks. At the same time, retailers continue to have challenges in retaining skilled and productive staff, as well as a continuing increase in employee turnover. To mitigate labor constraints, retailers can collaborate to enable a shared workforce.
Alternate labor models are part of the “future of work,” which will include more freelance, part-time and limited-term employment. This is the expectation of the millennial and Gen Z cohort as they become the mainstay of both consumer and labor markets. Retailers must start incorporating this into their digital workplace models, just as they should pay careful attention to the current consumer focus on sustainability.

Generation AI

Consumers, led by millennials and Gen Z, are increasingly aware of the need to reduce their consumption and to help lessen the negative impact on the environment. Consumer expectations  push retailers to be more transparent, ethically minded and sustainable in all aspects of their business, focusing on implementing better solutions for their returned and excess merchandise. Retailers are, therefore, now increasingly turning their sight to recommerce or “resale commerce” in a bid to meet customer expectations, along with targets for reducing their carbon footprint.

Artificial Intelligence

Ever-changing consumer expectations and the addition of new business models mean retailers must operate more efficiently, preemptively and at scale. Through the application of AI across a retailer’s ecosystem, retailers are applying data analytics into every touchpoint of their business. Including sales predictions, consumer personalization, store optimization and product recommendations. Retailers are investigating in AI to anticipate consumer expectations for products, services and experiences that are tailored to their personal preferences and are available exactly when required.
Gartner clients can read more about this research here:

Predicts 2020: Consumers Determine Retail Success Well Before the Sale

Analyst(s): Max Hammond  |  Robert Hetu  |  Kelsie Marian  |  Joanne Joliet

The Gartner Blog Network provides an opportunity for Gartner analysts to test ideas and move research forward. Because the content posted by Gartner analysts on this site does not undergo our standard editorial review, all comments or opinions expressed hereunder are those of the individual contributors and do not represent the views of Gartner, Inc. or its management.

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