Physical retail will long be gone by 2050. That’s in our lifetime!
Legacy institutions such as high retail rents and the operational cost of running stores will certainly play their part in this demise, but the instrumental blow will be the future generations’ interest in real shops and shopping. It is very possible that the next two generations, Alpha and Beta, will be the last of their kind before an explosion in artificial intelligence and virtual experience that rapidly reduce interest in physical stores and products. But just as profoundly, Boomers, Gen X, Y and Z might well be the last consumer generations to place any value on real shops and stores.
Generations that shop is a series of six short articles that aim to explore and consider what opportunities remain for brands and retailers to maximise the shopping landscape now and for the relatively short-term future.
The ‘voice commerce’ generation.
Generation Alpha are yet to have a purchasing footprint of their own, but with an estimated 2 billion of them in their shopping prime by 2050, these generational babies are not innocent when it comes to consumer influence and commerce generation.
Born to millennials, Generation Alpha share their parent’s curiosity, creativity and determination, in addition to generating an unprecedented influence on the technology and commerce platforms created by their parent’s generation.
Interactive technology has dramatically advanced in such a short period of time, and it will be the Alpha’s that will develop in life with this as second nature. Many Alpha’s have a digital footprint of some kind, even before they can utilise it themselves, and we see online influencers as young as 4 shaping what we buy. In fact, 3 out of 4 parents told us that they include their youngsters in pivotal decision every day. As young as 6, Alpha’s are included in decisions about food, travel, home entertainment and outdoor activities. Parents admit that up to 85% of their purchasing decisions on a daily basis could be influenced by their fresh-faced Alphas.
Yes, it really is true, influencers as young as 4 now contribute towards online sales well in excess of £90bn as well and generating ad revenues above £4bn. Never before has a generation had access and the ability to influence and shape commerce.
Of course, we are yet to understand what will shape and influence Alphas to buy or what consumers they will be, but there are some pretty strong indicators coming through in our research. Evident is their immersive, intuitive and primary relationship with screen-based technology, augmented reality and ‘on demand’ commerce channels. Their parents shaped these advantages, only to witness their children take them in their stride. Alphas prefer visual communications and voice demand over text or email and they frequently interact with mixed reality platforms such as gaming and online celebrity influencers, flipping from one to the other seamlessly.
Alpha’s are very in tune with their responsibilities for the environment. Influenced by the media to some extent and their parent’s values, but also witnessing global peers such as Greta Thunberg has cut through and has an impact. Alphas tell us that they do and can change the world. Their young developing minds are already focussing on engagements with online commerce brands that brings transparency, diversity and intuitive experiences to the fore. Their parents might well still tolerate between 2 to 3 days for home delivery, whereas Alphas tell us ‘same day’ has to be the norm. Information that is on demand and seamless, is the everyday normal for Alphas. Voice assistants feature up to 20 times a day, their lives are captured through instant motion platforms such as TikTok and favourite digital content is there when they need it. As new consumers, services such as Amazon will be the bare minimum for every expectation.
Alphas will be the start of the end for physical retailing as we know it today. They are and will shape digital reality commerce, already exploring augmented reality in everyday life, analogue retail will simply not work for them. Physical commerce environments will be shaped by Alphas to resemble destinations for learning, exploration, creativity and connectivity. Brand and retailers alike will have to rapidly transform their formats to encourage multi-dimensional experiences that offer a distinct difference from virtual and screen based experiences.
The Alpha generation will take diversity, convenience and creativity several steps further than their parents or Gen Z cohorts. They appear to welcome collaboration with brands and retailers to help form experiences that suit them. However, the reality will be somewhat different. Alphas are far more impatient and information endowed then previous generations and will give little time to brands who don’t comply with their retail demands.
Alphas consider themselves highly adaptive, they will be a wealthy generation and highly educated. Creativity and self-expression rank extremely high in their social placement and show little concern in achieving their goals. There is no doubt, Alphas will be a huge influence on consumption and how we go about it.
Perhaps, in the context of shopping, we will remember them as the ‘same day’ generation. They are the generation that will fully value ‘on demand’ from every aspect of their lives, from information, content, relationships and experience.
By Martin Fawcett, Managing Director, The Shopper Agency