Ecommerce looks set to transform the retail landscape faster than expected, according to Edge by Ascential’s annual future retail development report, which sees consumer power and preferences driving innovation and fundamentally changing the role of physical stores.

Shifts in consumer power and preference around efficiency and speed are converging rapidly with technological, economic, industrial and societal factors to accelerate retail’s transformation even faster than expected over the next five to ten years.

The results are continuing to power innovation that will drive brands and shoppers away from big box stores and further towards digital commerce and convenience, including more brands that will offer direct-to-consumer sales, according to Edge by Ascential’s Future Retail Disruption report.

This shift will be most apparent among mass merchandise channels comprised of online players, which are expected to account for 23 per cent of all global chain retail sales in 2024, up from 17 per cent today. Ecommerce will grow at a 12.5 per cent CAGR during this period, compared with 4.3 per cent for store-based retail. And by 2030, three-quarters of CPG suppliers will operate a direct-to-consumer platform, fully integrating them with other sales channels and using them as testing and innovation platforms for products, brands and market entries.

“The US retail industry is experiencing disruption and reinvention at unprecedented speeds, and it is not slowing down,” said Xian Wang, global content director at Edge by Ascential. “The confluence of trends, innovations and sheer access to information is forcing brands and retailers to adapt and innovate or suffer severe consequences.”

As smartphones develop into life management devices and customer touchpoints multiply, transparency and choice will expand for consumers, undermining traditional levels of shopper loyalty. Yet, smartphone and connected device growth will create unprecedented amounts of shopper data that brands and retailers will leverage to inform real-time product development and personalised targeting in an attempt to restore loyalty.

By 2025, the share of internet users who access the internet solely via smartphones will rise to 73 per cent, up from 51 per cent today.

In 2019, about 25 operators around the world launched 5G mobile networks, which offer speeds about 100 times faster than 4G. Another 26 are expected to launch in 2020.

Speed and flexibility in fulfilment are major competitive battlefields, requiring support from brands. New fulfilment methods, the expansion of delivery intermediaries, rising customer expectations of speed and the trend towards warehouse automation all mean that suppliers must prioritise the creation of flexible supply chains to enable on-demand service to on-demand retailers that serve on-demand customers.

Net closure rate of retail outlets will continue to accelerate. Consumers will be older, less wealthy, live in smaller households and suffer from restricted mobility. By 2050, 68 per cent of the world’s population will live in cities, up from 55 per cent today.