New data released today by Klarna, the global payments and shopping service, reveals how retailers will need to adapt their offering to win shoppers in the future. With recent advancements in technology, AI, AR and robots are likely to dominate the in-store and online landscape with shopping services like Klarna already integrating AI personalisation into their products.

Over the past 18 years, Klarna has been instrumental in driving transformative change within the retail industry, during which time the online retail industry in the US grew as a percentage of retail sales by 484%*. To celebrate the brand reaching this milestone year, Klarna spoke to more than 5,000 consumers across 5 countries and teamed up with retail expert Kate Hardcastle, MBE, aka the Customer Whisperer, to explore how the future of shopping could evolve. The Future of Retail report also includes future-gazing predictions from some of the world's leading retailers and ChatGPT, the artificial intelligence chatbot developed by OpenAI, which recently teamed up with Klarna to bring smoooth shopping to the hugely popular ChatGPT.

The study examined shopping habits 18 years from now, when Gen Zers will turn 40 and together with Millennials be the dominant consumers. Results revealed their predictions on how emerging technologies will influence future shopping experiences, such as:           

• More personalization is top of the wishlist.

              65% want the shopping experience to become more personalized in the future, and 36% are sure it will be, both in-store and online.           

• Most fashion shoppers won't try clothes on physically.

              Only half believe they will try clothes in the same way as today (53%). Instead, 48% want to use virtual dressing rooms, 28% Augmented Reality (AR), and 23% will rely on Artificial Intelligence (AI) to advise which clothes best fit their body and fashion style.           

• Well-mannered robot fashion advisors and virtual personal shopping assistants are in high demand.

              More than half (59%) are open to the idea of a robot approaching them in-store to take their measurements and recommend styles, with an additional 18% considering it depending on how the robot looks and behaves. In addition, 34% want access to virtual 'personal shoppers' which can provide recommendations based on their fashion style and taste when they shop online           

• Augmented Reality (AR) will elevate the future in-store shopping experience.

              The vast majority (81%) expect Augmented Reality (AR) to enhance their in-store shopping experience and one-third (37%) think that this technology will eventually become standard across retail stores.           

• Virtual Reality (VR) won't replace the real-life shopping experience.

              Less than half of Gen Z'ers (43%) believe that shopping in Virtual Reality (VR) will come to surpass the real-life shopping experience within the next two decades.           

• The future is cashless.

              Gen Z'ers and Millennials (64%) agree with the prediction that the majority of physical stores will be completely cash-free in 18 years time, and 31% of them believe that shift will take place already in 5 years time.

In addition to technological advancements, the future of the planet and the growth in the circular economy are also at the forefront of consumers' minds.
The younger generations also agree that the circular economy should take a larger share of the total shopping industry and that fashion needs to become more sustainability oriented in the future.           

• 52% want more sustainable fashion in the future.           

• 57% want the circular economy to take a larger share of the total shopping industry, and 1 in 3 believe they will sell (26%) and buy (37%) pre-owned items more often.

David Sandström, Chief Marketing Officer at Klarna, commented: "In the western world, approximately 80% of all online purchases are made through search, while the remaining 20% are based on personalized recommendations. In contrast, in China, 80% of online purchases are driven by personalized recommendations. This study confirms that shoppers in the western world desire a comparable shopping experience, which is now available on the Klarna app feed, powered by AI and purchase history data. The next generation of consumers will expect a highly personalized shopping experience where products find them instead of the other way around."

Kate Hardcastle MBE, The Customer Whisperer and independent expert, added: "Retail and shopping trends have evolved significantly over the last decade and it's clear there are more changes to come. Technologies like augmented reality have the potential to transform rundown physical shops and revamp the in-store experience for shoppers. Klarna's latest research shows that consumers want greater convenience and a more personalised shopping experience - and seamless technology must be at the heart of this."

ChatGPT, the artificial intelligence chatbot developed by OpenAI, commented: "The biggest change for consumers when they shop in 2041 will likely be the widespread use of augmented reality (AR) and virtual reality (VR) technologies, allowing them to virtually try on products and experience them before making a purchase. Additionally, personalized recommendations based on their past behavior and preferences will become even more accurate and prevalent, making shopping experiences more efficient and tailored to individual needs."