Six far-reaching disruptions set stage for a retail renaissance in the next decade—Bain & Company
Bain pinpoints powerful trends set to reshape the global retail landscape by 2035, with businesses which seize the opportunities set to be tomorrow's winners
Middle East: Far-reaching disruptions in the global retail landscape are set to radically – and rapidly – transform the industry over the next decade, Bain & Company finds in a new analysis of the powerful trends reshaping retail business models, published ahead of next week's Consumer Goods Forum Global Summit in Amsterdam.
As retailers worldwide grapple with an array of immediate challenges, including the impact of tariffs, Bain's report, The Future of Retail: Six Disruptions That Could Shape the Next Decade, urges them not to lose sight of six major shifts impacting their future success in the longer term. Tomorrow's retail winners will be the businesses which move quickly to seize the opportunities offered by these trends in technologies, consumer behaviors and shifting retail economics – and will set the pace for a new retail era, Bain concludes.
'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':
Algorithms and robots will run your business: Core retail functions such as pricing, promotions, and merchandising will increasingly be automated, commoditizing 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.
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. Executive teams need to start planning today for the likely impact of AI shopping agents becoming widespread.
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.
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.
You might not need as many stores as you think: The role of stores must evolve to reflect the changes in consumer behavior. Executives must remain open to alternative uses for space, such as franchising or leasing to third-party traders.
The hunt for scale will cross borders: Local scale isn't enough to keep up with consumer's expectations and competitive pressures. Cross-border M&A and virtual alliances will be key to funding tech investment and staying competitive.
Today's Bain report 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. Bain's research shows that 'beyond trade' revenue accounted for 15% of sales and 25% of profits in 2024 for the average large retailer, up 10% from 2021.
'No one can predict the future with certainty but we're already seeing how the winning retailers are diversifying their trade,' Marc-André 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.'
About Bain & Company
Bain & Company is a global consultancy that helps the world's most ambitious change makers define the future. Across 65 cities in 40 countries, we work alongside our clients as one team with a shared ambition to achieve extraordinary results, outperform the competition, and redefine industries. We complement our tailored, integrated expertise with a vibrant ecosystem of digital innovators to deliver better, faster, and more enduring outcomes. Our 10-year commitment to invest more than $1 billion in pro bono services brings our talent, expertise, and insight to organizations tackling today's urgent challenges in education, racial equity, social justice, economic development, and the environment. We earned a platinum rating from EcoVadis, the leading platform for environmental, social, and ethical performance ratings for global supply chains, putting us in the top 1% of all companies. Since our founding in 1973, we have measured our success by the success of our clients, and we proudly maintain the highest level of client advocacy in the industry.
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