ING forecast: ‘agentic commerce’ to further shrink brick and mortar retail
Amsterdam - Following the rise of e-commerce and social commerce, the emergence of agentic commerce is placing further pressure on brick and mortar stores. This is according to a new market analysis by ING Group.
Agentic commerce helps consumers shop via autonomous AI agents that independently select and purchase products for the online consumer. Within the fashion sector, the technology is highly suitable for basics such as socks and T-shirts, and less so for trendy clothing and luxury items, according to the Dutch financial services company.
Across the retail sector, AI tools will further drive the shift from physical to online, ING Group predicts. In the past ten years, high streets in The Netherlands have already lost over a fifth (21 percent) of their retail branches. At the same time, the average store size increased by 20 percent to 370 square metres. Major fashion brands such as H&M and Inditex are closing unprofitable, smaller branches and investing in larger flagship stores in strategic locations.
AI agents are effective for standardised products and repeat purchases, such as in the electronics and personal care sectors, state the report's authors. For clothing and shoes, emotion, taste and the physical 'look and feel' play too significant a role. Currently, two out of three fashion purchases are still made in-store; for electronics, this is less than half. For this reason, ING Group suspects that fashion will be partially spared, and that the role of AI will for now be limited to the orientation and selection phase.
Nevertheless, fashion retailers must take action. ING advises investments in real-time product data, inventory management and dynamic pricing. Otherwise, the retailer will become invisible to the algorithms of AI agents. Stores that function purely as distribution points and cannot compete on experience are heading for structural margin pressure and risk being wiped off the high street.
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