What do AI shopping agents mean for shopping centres?
A new report from management consultancy firm Bain (as reported by Retail Week) has found that whilst traditional retail spending is down, non-core business revenue (think third-party marketplaces, sales on credit etc.) is growing.
The report speculates that players in the retail industry are going to see a dramatic shift in the way they do business in the next 10 years. This will be as a result of increased use of AI as well as changes in consumer habits, including the use of AI shopping agents.
What are AI shopping agents? Imagine you are looking to buy a pair of jeans. Instead of trawling through multiple styles in multiple shops (the pain is very real for a lot of us), you would be able to ask an AI tool and it would provide you with a list of options based on your budget, previous style preferences, previous brand preferences and brand sizing to name a few.
So what does this mean for the humble shopping centre? Will there still be a place for physical stores? I certainly think so, but perhaps not in exactly the same form as we currently know. It may be that AI shopping agents will point consumers in the direction of a physical store that stocks their desired product. But physical stores will continue to have a place beyond that.
In the UK we certainly love a queue. And whenever there is a new product launch from a popular brand, you can guarantee there will be shopping centres with queues of people down the mall all waiting for their turn to pass under that balloon arch and grab their prize, often at a heavy price tag. This is because there will always be people looking for a physical experience.
Shopping centres have already shifted towards a larger offering of leisure and restaurant options. In the future, we are likely to see that “experience” element extend to the retail stores themselves. The stores will become more of a showcase for brands to garner interest and customer loyalty, even if the majority of a retailer’s income comes from elsewhere.
Subcribe to news and viewsnon-core business revenue such as retail media, third-party marketplaces, financial services and logistics now represent 15% of sales and 25% of profits for the average large retailer
https://www.retail-week.com/customer/six-major-predictions-for-the-next-decade-of-retail/7048837.article
