Technological change will drive improvements in retail sector: JLL

The pace of technological change will drive consumer demands for improvements in the retail sector, according to part six of Jones Lang LaSalle's Retail 2020 report which examines the rapidly changing global retail landscape over the next 10 years.

The arrival of Radio Frequency Identification (RFID) and Near Field Communication (NFC) devices look set to revolutionise payment systems to the point where European high streets may even see unmanned 24-hour stores appearing by the end of the decade.

The report notes that shopping will also be made easier through advances in logistics. Home delivery will become cheaper and more rapid, especially in urban areas, taking place just two hours after the order is placed. Deliveries will become more flexible, taking place when consumers are at home or at work and at their convenience. Meanwhile there will be an explosion of alternative delivery mechanisms from drive-throughs to local centralised pick-up points, for example petrol stations, dry cleaners and purpose-built facilities.

James Dolphin, Head of pan-European Retail Agency at Jones Lang LaSalle, said: 'Making life easy for consumers does not go hand in hand with a simple life for retailers. Whilst automising checkout payments reduces cost and management headaches, other advances come with a price attached for retailers.'

'Faced with these challenges, retailers will seek efficiency savings and inevitably outsource more of their operations. As this trend accelerates in the future, retailers will find it more of a strain to keep profits in-house. As they outsource, revenues will flow externally to website builders and hosts, phone companies, logistics operators and technology providers.'

Guy Grainger, Head of UK Retail Agency at Jones Lang LaSalle, concluded: 'Ultimately, new technologies and new operating practices will lead some retailers to ask almost existential questions about who they are, the purpose they serve and whether essential core products and services are profitable any longer.'