The future of retail in 2035

We are working with employers to explore the challenges and opportunities of the future of work for different sectors.

As one of the UK’s biggest employers and the heart of our local high streets, the retail sector is one of the country’s most important.

In one of our Future Work Labs, we brought together a group of major high street retailers to discuss what they thought the impact of technology would be on the future of retail in 2035.

On June 21st we will be holding another Future Works Lab for the retail sector to start to address these challenges in a practical, action focused way. If you work in the retail sector and are interested in attending, please get in touch.

The RSA’s ‘Four Futures of Work’

We based our conversation around getting retailers’ views on our ‘four futures of work’. These are four different possible futures for what the future of work might look like in 2035 based on the RSA’s research:     

• The Empathy Economy: what if technology makes emotional work more important?  
• The Precision Economy: what if sensors flood the economy and workers become subject to a new level of algorithmic oversight?
• The Big Tech Economy: what if technology develops at a rapid pace and leads to widespread automation?
• The Exodus Economy: what if another economic recession causes technological progress to stall?

Retailers didn’t focus on the ‘Exodus Economy’ future in our conversations despite mentioning that it is something they are worried about with the UK’s imminent departure from the EU.

What would the other three futures of work mean for the retail sector in 2035?

“Customer expectations will be so much higher”

In the ‘Empathy Economy’ future, high streets change dramatically. Physical stores become more experiential. The job of sales assistant becomes more important.

Showfields is one example we can point to today which sums up this future. Visit the store in downtown New York and you are guided by knowledgeable salespeople through a series of experiential (and Instagrammable) showrooms. No inventory is stocked but each showroom is equipped with a kiosk where people can order what they want to buy online.

Like in Showfields, the role of the shop floor sales assistant would be elevated, as they become more central to high street retailers value proposition. “Customer expectations will be so much higher, so our staff will have to be much more credible, otherwise people will just shop online” one retailer said. Another agreed, saying “empathy is already becoming a business need” – but the emphasis is currently being placed on developing technical skills rather than the human skills needed to deliver high quality customer experiences.

New jobs would emerge in “blended technology roles”, both serving customers and acting as “line managers for robots” to ensure technologies are working properly and decide when they need to be upgraded.

There was a consensus that this future would be largely positive for retail workers. But some employers were worried about the prospect of burnout, given the increased demands on staff. They recognised they would have to do more to meet higher expectations of wellbeing at work. Others felt that this future would mean higher job satisfaction as staff “will add value by making other people feel good about themselves”.

“Data will be more of a carrot than a stick”

The ‘Precision Economy’ is all about tracking and data. In some parts of the retail sector, it’s already here.

Percolata uses algorithms to build profiles of retail employees based on an analysis of their performance data, then combines this with weather information, online traffic and other signals to predict how many people will visit the shop and which staff should work that day.

One major supermarket chain told us they “already have highly monitored distribution centres”. Amazon has patented a wristband that buzzes when warehouse workers move their hands towards the wrong item. Retailers said wearable tech like this might be used more outside of warehouses, for stacking shelves or helping customers find things in store.

But the retailers expressed scepticism about “whip cracking managers”. They suggested that “data will be more of a carrot than a stick” - workers would embrace the quantified self movement, with data empowering them with more tailored skills development and career progression opportunities.

This future sees a big role for ‘gig economy’ platforms, letting workers complete shifts with multiple employers. Retailers weren’t so sure, suggesting “in-company gig-ification” (using algorithms to allocate shifts within a business) was more likely. One reason given for this was that gig workers could reduce the quality of customer service, with brand new staff turning up to gigs not knowing how different stores operate.

Others argued that wearables might help overcome this. It could vary in different parts of the retail sector, with jobs made up of routine tasks (e.g. shelf stacking, or self-service check out assistants) more likely to be outsourced.

“Would people still shop with us if we laid off 300,000 people?”

In the ‘Big Tech Economy’ future, today’s tech companies have become retailers. So, today’s retailers must become more like tech companies to compete. A good example of this is Ocado, which started as an online supermarket but now builds robotic warehouses for M&S.  

In our conversations, retailers disagreed that there would be a wholesale shift to online shopping - there would still be a role for high streets to address social isolation. Retailers suggested their network of smaller high street stores, which could adapt the needs of local areas, could be a huge advantage when trying to compete with the likes of Amazon.

How much automation would there be in this future? One major supermarket suggested that the cost of full automation was unaffordable, and that legacy infrastructure was a barrier to adoption. However, they suggested there would be a sharp decline in need for manual labor skills: “just as self-service check out machines mean we only need 1 person on a till rather than 6, semi-autonomous lorries will mean you only need 1 person to control 3 trucks remotely”.

Some new jobs would emerge in high-tech roles, including drone delivery drivers and AI-augmented trend forecasters. But businesses were concerned about how widespread redundancies would be perceived by the public. As one asked “would people continue to shop with us if we laid off 300,000 people?”

An Industrial Strategy Sector Deal for the retail sector

The obvious question is ‘which one of these futures is most likely’? But they aren’t designed to be complete predictions. The retail sector in 2035 will probably have some characteristics of all four.

They are designed to provide an antidote to fatalism. Instead of only fearing the impact of technology, the retail sector should be asking how it can harness opportunities and mitigate risks to create a positive future of work.

The Government’s Industrial Strategy promised to work with low productivity industries such as retail, but little progress has been made so far. In our discussions with retailers, we identified three key challenge areas for the retail sector to address as part of any industrial strategy sector deal:

• Upskilling and reskilling: equipping workers with the soft skills and technical capabilities for the jobs of the future.
• Physical stores and high streets: adapting to the changing role of physical stores, redesigning job roles and business models, considering new forms of collaboration on the high street.
• Benchmarking good work: establishing a set of sector-wide standards for practices such as flexible working and outsourcing.

On June 21st we will be holding another Future Works Lab for the retail sector to start to address these challenges in a practical, action focused way. If you work in the retail sector and are interested in attending, please get in touch.