1. Retail 2020
Online Gold Rush 3
Retail 2020

2. 02 • Jones Lang LaSalle Retail 2020
Online Gold Rush
Online Gold Rush
Who Stole My Lunch?
Retail has long been the key touch point between goods manufacturers
and end consumers. So it is no surprise that the sector has been vibrant and
innovative, bringing such inventions to the market as: layaways; self service
shopping; concept stores, in-store bakeries, factory outlet centres, loyalty
cards; pop-up shops, airport retailing – even scuba diving in shopping centres.
However, looking ahead, the Take the online pharmacy. Whilst regulations will save
next generation of visible Regulations today are keeping independent pharmacies for a
innovation will come mainly this movement at bay but with while longer, some independents
from online retail initiatives escalating healthcare costs, will feel the cold winds of change
– and many of these will few governments will stand in blowing very strongly over the
be entirely new entrants to the way of ‘progress’ for too next three years. Legacy formats
retail. In fact, over the next much longer. With an ageing like independent bookshops
5 years, existing retailers will population less able to collect and music stores cannot survive
find themselves increasingly their prescriptions, with doctors in their current positioning.
asking the question: who stole soon being able to issue repeat Instead, they will become cottage
my lunch? And the answer will prescriptions electronically and businesses selling an attitude
be a disparate group of digital with many consumers happy to and an approach to an afternoon.
natives who see selling directly order vitamins and Viagra online, Bookshops were pleasant,
to consumers as a get-rich- a tsunami will hit the independent dusty places before transactions
quick gold mine. And these pharmacies by the end of the became all important, and they
entrepreneurs will grow without decade to come. Today’s online will have to return to this
pharmacies – for example, experiential focus.
paying rent to anyone. Despite
pharmacy2u.co.uk, infar.com
their lack of retail experience,
and medix24.com – are pioneers
these new retail entrepreneurs
but expect a rush of new entrants
have youthful enthusiasm on
to this profitable sector over the
their side plus a revolutionary
next few years.
platform (i.e. the web) which
has radically lowered entry
barriers and increased
consumer convenience.
This online gold rush is, of course,
in full swing today but we are
just in the foothills of what will
occur; the 2020 retail landscape
will look very different from a
consumer’s perspective.

3. 03 • Jones Lang LaSalle Retail 2020
Online Gold Rush
Best of Both Worlds
Given the increasing number of online entrants, the last decade has
seen owners and occupiers react in one of three ways to e-commerce
and web-based marketing.
1.
Perceive online as a potential competitor
– but a small, containable one
2.
See online as another channel, one to be integrated
into a multi-channel trading strategy
3.
Use the communication possibilities of the internet in
an integrated multi-media strategy.
In other words, online has been either ignored,
or more recently, blended with existing operations
to get ‘the best of both worlds’. However, possibly
because of the legacy of bricks and mortar,
few retailers have really positioned to launch The real retail innovation on the internet has come
entire new businesses and business models from elsewhere. In fact, it can be argued that the
on the internet. real innovation anywhere has come from online.
Take e Bay (eBay.com) and their revolution in:
a) auction selling b) accessing the second hand
market c) taking retail global d) introducing safe
payment systems. Fluctuating fortunes mean they
have lost ground recently but fully intend to rebound
through new initiatives such as their newly launched
fashion micro site selling trendy new clothing at
deep discounts using ‘flash’ sales techniques. eBay
are also experimenting with an online outlet mall,
have signed exclusive fashion deals with designers
like Narciso Rodriguez and are improving the whole
site experience. eBay sold $7.1 bn of clothing in 2009
and has access to 90 million active buyers and sellers.

4. 04 • Jones Lang LaSalle Retail 2020
Online Gold Rush
Private sales models are also booming. Gilt’s (gilt.com)
model requires personal sign up and gives access
to “luxury brands, hand-selected styles and members
-only prices”. The offer changes frequently, each
sale lasting 36 hours and can be 70% off retail
prices. They have already launched an app for the
new iPad to “significantly transform e-commerce
at Gilt by injecting a sense of entertainment and
Polyvore have 1.5 million registered users and
competition into the online shopping experience”.
200,000 ‘creators’. Again, Polyvore is the initiative
Gilt grew sixfold in 2009 and is on track for $500
of non-retailers being started by a bunch of
million in 2010. The company launched in 2008.
ex-Yahoo employees in 2007.
Polyvore (polyvore.com) is part social network,
And so it goes on. Once again, the point being
part designer club. It aggregates clothing and
that the real innovation in retail is happening
accessories from many different brands online:
now, it’s happening online and it’s being led by
a sort of online transactional department store.
‘non-retailers’. iTunes (apple.com) is dominant in
The twist is that customers compose their own
music sales and Amazon (amazon.com) conquers
looks and styles dragging and dropping together
all before it in book sales. ‘Old economy’ retailers
merchandise they prefer. Others are then
like Virgin Megastore and Waterstones were late
encouraged to vote on their favourite looks
to launch online and, although not solely because
– and indeed buy into the look they prefer.
of this, have essentially underperformed.
This site creates a community feel, an interactive
shopping setting and a good way to pick up on
hot trends and ideas. Consumers are invited to
be creative and have fun. Suddenly, fashion is
becoming democratised – and moving away
from the autocratic cat-walks.
The real innovation in
retail is happening now,
it’s happening online
and it’s being led by
‘non-retailers’

5. 05 • Jones Lang LaSalle Retail 2020
Online Gold Rush
Here today, bigger tomorrow
So what of the next ten years? We will see more of the same; the barriers for
entry in the retailing industry have never been lower.
In the future, we will see more of:
- private selling (e.g. ruelala.com)
- peer-to-peer selling (e.g.leboncoin.fr)
- flash sales (e.g. nakedwines.com)
- auctions (e.g. swoopo.co.uk) and blind auctions
(e.g. auctionsforacause.com)
We will witness raging innovation in retail
– a real gold rush where entrepreneurs go - mutual sites (e.g. thewinesociety.com)
from zeros to heroes in a matter of months. - augmented reality retail sites (e.g. zugara.com)
In the online world, 6 months is a really long time - rental sites (e.g. bagborroworsteal.com)
– and time enough to make a fortune. We will see - luxury sites (e.g. netaporter.com)
innovation in format, in channel, in delivery, in social
retail, in retail-as-game, in sales techniques, - trading sites – where consumers buy wholesale and
in payment systems, in returns policies. sell on retail (e.g. doba.com)
- swapping sites (e.g. whatsmineisyours.com)
- grouped buying (e.g. groupon.com)
- free sites (e.g. limewire.com)
- virtual stores (e.g. polyvore.com)
In the online world, 6 months
is a really long time – and time
enough to make a fortune

6. 06 • Jones Lang LaSalle Retail 2020
Online Gold Rush
And we will see more and more co-production, Will any old-World players match the business flair
involving consumers in the whole process, of these upstarts? Looking ahead, anything is
from design, through selection to selling and possible, but it will require true iconoclasm at the
beyond. For example, made.com showcases very top of a retail enterprise and a new generation
furniture designs and holds public votes. Only the of employees. For a start, retailers should be
most popular designs go into production and voters recruiting as many smart ‘digital native’ Gen Yers
receive discounts for helping select. In true win-win as they can lay their hands on and putting them in
style, consumers are involved and get products pivotal positions (hint: not in the warehouse).
they want; new designers get showcased;
the manufacturer has no unsold inventory,
retailers sell exactly to order. And once again,
the specialists in this supply-chain revolution come
from online.
In the future, creativity will continue to come from
start-ups not incumbents. Perhaps this is the way
it always happens. Future electrical cars are as
or more likely to come from battery makers
as automotive companies. Alternative energy
companies like Vestas Wind Systems and RePower
are more likely to dominate renewable energy,
than Shell or BP. When the platform changes,
leadership changes. Insiders become outsiders
and new opportunities abound.
If you have any questions about this
report, please contact us at:
Paul Guest, Head of EMEA Research
+44 (0)20 3147 1925
retail2020@eu.jll.com
www.retail2020.com