The key innovations to watch to meet the changing brick-and-mortar landscape
John Karsberg, Head of Strategy and Insights at WorkShop: ”The consumer is not changing, it is the context around the consumer that is changing.”
2 Jul 2024

John Karsberg is a retail expert with extensive experience from the H&M Group and a PhD in consumer Marketing from the Center for Retailing at the Stockholm School of Economics. In his job at WorkShop, he helps global brands and decision-makers succeed in retail.

How have you seen the retail landscape change over the years?

— The retail landscape has shifted towards a more digital-first approach, with significant growth in e-commerce. Post-pandemic, there’s been a heightened focus on health and safety, and a surge in omnichannel retailing. The good: greater innovation and flexibility. The bad: increased pressure on physical stores to adapt and compete with online giants. Here I see that many stores are competing with online head-on, rather than using the perks of offline retailing. So, focusing too much on convenience rather than experience and staff and service excellence, says Karsberg.

What are the keys to success in physical retail in 2024?

”Treat every store as a flagship store”

How important is physical retail for brands now?

— It remains crucial for brands, both small and large. While online shopping has grown, physical stores offer unique advantages like tactile experiences and personal interactions and are a great way to really connect and create brand communities. Also, online traffic is increasingly difficult and expensive to get with increased competition and data legislation. Physical retail is not necessarily more or less important, but its role has evolved to complement online channels and provide immersive brand experiences.

And what innovations do you see in retail now?

— Retailers are using AI and machine learning to predict trends, manage inventory, and personalise the shopping experience. AI-driven chatbots and virtual assistants are also improving customer service and engagement. This is still very much being developed, but there are promising signs. Walmart is talking about adaptive commerce, which is using tech and data to adapt to customer needs in real-time, Karsberg shares. He continues:

— The adoption of contactless payments has surged, making transactions faster and safer. Additionally, checkout-free stores, where customers can grab items and leave with automated billing, are becoming more popular, reducing wait times and enhancing convenience. How to use this is not yet set according to me. The risk is that the drive of this development is reduced cost, rather than improved customer experience.

— Innovations in sustainability are at the forefront. This includes the development of eco-friendly materials, waste-reduction technologies, and energy-efficient store designs. Brands are also implementing circular economy practices, such as recycling programs and take-back schemes for used products.

— Thanks to enhanced data analytics, retailers are leveraging big data to gain insights into customer behaviour, optimise store layouts, and improve product placement. This helps in creating a more tailored shopping experience and making informed business decisions. This does not have to be difficult and very advanced, less is usually more, but there needs to be clear goals and metrics and a structure on how, who and when to follow up the development. 

— Lastly, experiential retail and temporary retail spaces and pop-up shops provide unique and immersive brand experiences. These innovations help in engaging customers in a novel way, creating buzz around products and testing new markets.

John Karsberg.

What are the keys in order to succeed when meeting the consumer in-store, and enhancing the consumer experience?

Looking ahead, what do you forecast for physical retail?

— It’s similar to the innovations mentioned. Working with experiential retail, stores will focus more on providing experiences rather than just products. We’ll see technology integration and continued growth in the use of AI — and maybe also AR and VR, even though that has been said to take over the world for some time by now — to enhance shopping. We’ll see increasing demand for eco-friendly practices and products and hyper-personalisation, leveraging data to offer highly personalised and adaptive shopping experiences, Karsberg shares. He adds:

— Retail is developing fast driven by the rapid tech innovations. What is important to keep in mind is that the consumer is not changing, it is the context around the consumer that is changing. So there is maybe an even bigger need to keep a consumer-centric mindset to be successful. That said, retail is at a fascinating crossroads where technology, sustainability, and consumer expectations are driving rapid change. The key to success will be agility, genuine curiosity, and the use of data to understand what needs to be focused on. As we move forward, retailers that can innovate while staying true to their brand values and the consumer will thrive.