Five big retail technology predictions for 2021
RTIH kicks off the year with a series of unlikely but nonetheless possible events which, if they were to occur, would send shockwaves across the retail sector.
1. Instacart ventures down IPO route
Instacart will launch its IPO in 2021, according to Brittain Ladd, a supply chain consultant and former Amazon exec.
He says that the company should immediately invest in opening 100 micro-fulfilment centres powered by Attabotics, AutoStore or Fabric.
“Instacart must remove the fulfilment of groceries from the stores of their grocery customers and instead, automate the process of fulfilling online orders using micro-fulfilment centres,” Ladd comments.
“This will significantly increase the value of its stock price and also increase the value of Instacart to its grocery customers.”
He also recommends that Instacart becomes an online grocery retailer no later than 2025.
“From a strategy perspective, it doesn’t make sense for it to fulfil online orders for grocery retailers if it can become an online grocery retailer and fulfil online orders direct to customers. I also encourage Instacart to open branded grocery stores in select locations.”
“Ignore my recommendations at your own peril, Instacart. You are a house of cards. You know it and I know it,” Ladd concludes.
2. Worn out ‘online vs offline retail’ debate is finally laid to rest
Online now accounts for 60-70% of John Lewis sales, whereas before the coronavirus pandemic it was 40%.
Nonetheless, the percentage of UK retail sales that are online currently stands at around 26%. So, when everything opens up again, and people flock back to high streets, shopping centres and retail parks, the physical experience will be far from dead.
This is not to underestimate the acceleration of e-commerce across all demographics. But ultimately, the customer is the channel. Too often last year, the conversation was focused on e-tailers thriving whilst their high street rivals dwindled and died.
When in fact during 2020, online became offline and offline became online. And there will be a further blurring of channels this year, with retailers ramping up their omnichannel offerings, mindful of the fact that the one constant is change.
3. Buy now, pay later bubble bursts
The buy now, pay later space has been booming in recent years. 2020, however, saw the beginnings of a backlash.
First, Martin Lewis, the English journalist/TV presenter and founder of MoneySavingExpert, had his say.
“Some people don't even know they're signing up for it. Yet there are also huge numbers with mental health issues and capacity issues,” he added.
“These schemes encourage people to increase spending - even if not right for them. The key is to regulate it - get rules in and a proper complaint system.”
Then Capital One barred customers using its credit cards to clear buy now pay later debt.
The third largest US card firm with 62 million accounts, plus more in Canada and Britain, said it would no longer allow “transactions identified as point of sale loans charged on its credit cards, regardless of the point of sale lender”.
“These kinds of transactions can be risky for customers and the banks that serve them,” it commented.
And just before Christmas, the Advertising Standards Authority (ASA) banned an Instagram campaign by Klarna for encouraging customers to take on debt during the coronavirus pandemic.
Expect more push back in 2021 as the economic fall out from the coronavirus outbreak hits many consumers hard.
4. Down with drones!
Drone technology is set to revolutionise delivery systems, some say.
We say that drones are overrated. To quote Brittain Ladd: “The weakness of drones is that they have a one to one ratio. One drone, one package, one delivery. Repeat.”
When it comes to online delivery, 2021 will be all about dark stores and micro-fulfilment centres. Oh, and delivery robots. Delivery robots are cool.
5. Bye bye, Bitcoin, bye bye
At the tail end of 2020, Sam Zell, the Founder and Chairman of Equity Group Investments, said: ”I am very sceptical, frankly, of Bitcoin. Ultimately, it may be the answer or one of the answers.”
“But right now, it's a world that's extraordinarily populated by chameleons and other fast talking characters. I don't believe everybody involved in it are the kind of people I'd like to follow."
We couldn’t agree more.
Winning the support of PayPal got a lot of fanboys and girls very excited. Expect a few more retailers to dip their toes in crypto waters this year, but Bitcoin et al won’t go mainstream as a means of retail payment and never will IOHO.
Bitcoin kicked off 2021 by passing $30,000 in value for the first time, continuing a recent sharp rise. But the many peaks and troughs mean it is not functional as a currency.
The future of money.? Not for retailers, we say.
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