Marc-André Kamel, Partner and Global Head of Bain & Company’s Retail practice.The Future of Retail: Six Disruptions That Could Shape the Next Decade, the latest report from Bain & Company, urges retailers to not lose sight of six major shifts impacting their future success in the longer term.
Far-reaching disruptions in the global retail landscape are set to radically – and rapidly – transform the industry over the next decade, Bain finds in its analysis of the trends reshaping retail business models.
“Retail is on the brink of transformation. These disruptions are not speculative, they’re already taking hold,” said Marc-André Kamel, Partner and Global Head of Bain & Company’s Retail practice. “As businesses manage tariff turbulence and other immediate concerns, they can’t afford to lose sight of the long-term evolution of the strategic landscape. Our research convinces us that the industry will be comprehensively altered over the next five to 10 years, setting the stage for a retail renaissance.”
Bain’s analysis identifies six provocative visions of the key trends that it believes are already driving what it calls a nascent “retail renaissance”:
1. Algorithms and robots will run your business in the future of retail
Core retail functions such as pricing, promotions, and merchandising will increasingly be automated, commoditising retail capabilities that have traditionally offered a competitive edge.
Retailers that don’t let algorithms and robots run key parts of their business might give away a few vital percentage points of profit margin.
2. Customers will cheat on you with AI shopping agents
As shoppers hand decision-making to brand-agnostic AI tools, loyalty models and digital marketing strategies will face pressure.
While planning for the future of retail, executive teams need to consider the likely impact of AI shopping agents becoming widespread.
3. Value will become more personal and contextual
Success will depend on meeting customer needs in the moment, not just on price. The retailers that excel at this will have data that can paint the full picture of a consumer’s behavior as well as the data strategy and capabilities to harness it.
4. Grocers will become fast-moving consumer goods (FMCG) businesses
Private (or own brand) label growth – with nearly half of grocery shoppers in the US and Europe now seeking out private label products – could blur the lines between retailer and supplier. Done well, private label will offer retailers powerful differentiation in the form of must-have, exclusive products.
5. You might not need as many stores as you think
The role of stores must evolve to reflect the changes in consumer behaviour. Executives must remain open to alternative uses for space, such as franchising or leasing to third-party traders.
6. The hunt for scale will cross borders in the future of retail
Local scale isn’t enough to keep up with consumer’s expectations and competitive pressures. Cross-border mergers and acquisitions and virtual alliances will be key to funding tech investment and staying competitive.
“No one can predict the future with certainty but we’re already seeing how the winning retailers are diversifying their trade,” Kamel added. “Scenario planning can help retail leaders think beyond the quarterly cycle and get ready for what’s coming. Those who act early and reinvest strategically will help lead a new era of retail excellence.”
The report also highlights how retailers are already expanding beyond traditional buying and selling of goods, gaining access to new profit pools in areas such as retail media, third-party marketplaces, financial services and logistics.
