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Subscription services tipped to replace traditional stores

Subscription services will supplant retails stores in the future, believes respected futurist and the co-founder of superannuation disruptor Zuper, Jon Holloway.

Speaking at an e-commerce forum for retail industry leaders in Australia hosted by IRI Worldwide, Holloway cites subscription services as the biggest reason for the demise of retail stores.

“Right now in Australia there’s probably 500 subscription business, there’s another 3000 being built as we speak today,” he said.

They cover everything from cosmetics to fashion, food and cars.

Supermarket shopping is likely to become an altogether different experience, as many consumers will opt to receive items such as laundry detergent, shampoo, deodorants on a monthly subscription and centre their supermarket visit around sourcing fresh food – a trend which will see consumer packaged goods companies dealing directly with their end customers, often eliminating middle-men, ie: retailers.

A great example he cited was  Marley Spoon, which delivers fresh ingredients and recipes to the customer’s door.

Holloway spoke about the transient nature of people as global citizens. In a world where the average tenure in a job is 18 months and the average tenure living anywhere in one place is two years, he asked the question that many supermarkets will soon be asking themselves: “How do you build an audience for a shop in a local area when they’re not going to be there in two years?”

Currently, somewhere between 6 and 10 per cent of retail sales in Australia are completed online, and Holloway predicts this could be as much as 50 per cent by 2030, maybe even earlier.

Within the next six to seven years, Holloway believes that it won’t be a matter of stores versus e-commerce, it will be a true omnichannel experience.

“The digital side of buying today is so much bigger than an e-commerce website,” he said.

“Retails stores will not exist in the future. It’s too easy not to have a retail store.”

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