The retail industry will become more segmented and customer-driven by 2015 thanks to shifting demographics, household downsizing and new marketing channels, according to a new report by PricewaterhouseCoopers’ Retail & Consumer Industry Practice and TNS Retail Forward.

“Overall, the retail industry will need to adopt a more targeted approach in order to reach its customers,” said John Maxwell, retail and consumer industry leader for PricewaterhouseCoopers. “The ‘one-size-fits-all’ approach of the 1980s is not going to work as the population becomes more diverse and tech savvy during the next decade.”

According to “Retailing 2015: New Frontiers,” people older than 55 will make up the most rapidly growing age segment in the United States. Members of Generation Y and millennials (people younger than 35) will be less enamored of large conglomerates and chain stores than their Baby Boomer parents. In addition, the population will become increasingly diverse, with nearly half of people younger than 25 identifying themselves as non-white in 2015.

“Due to the demographic dichotomies, a new consumer mindset will emerge in 2015 that will have far-reaching implications for the retail industry,” Maxwell said. “Consumers will want to be more interconnected with the businesses they patronize, exercise more control over their purchases, customize their products to serve their individual needs and indulge in shopping as a life experience.”

Consequently, marginal malls will continue to die as fewer reach their financial targets and conventional department stores fade away. New neighborhood centers will pop up and incorporate entertainment and dining into the shopping experience.

In 2015, retailers and suppliers will be held to higher standards around the world, according to the report. Concerns about the planet will be an integral part of mainstream consumer demand. Rising levels of government involvement, omnipresence of news media, increasing watchdog groups and advancement in technology all will have an effect on how retailers operate.

“Most of the technology trends anticipated for 2015 are already in progress today,” said Tom Rubel, president of TNS Retail Forward. “With the advent of falling technology costs, widespread availability and adoption of devices, consumers will be able to access content on demand, including information on the source of the product, along with gaining access to peer reviews of a product or service before purchasing it.”

Among the 15 trends that will redefine the business environment in 2015:
•  The current trend of sustainability will drive the downsizing of products, packaging, resource consumption and waste
•  Retailers will no longer define themselves by the products they sell, but by the customers they serve.
•  Traditional storefronts will increasingly coexist with a growing array of multi-channel platforms, including catalogs, popup stores, virtual stores and retailers partnering with services..
•  Supplier relationships not only will be increasingly collaborative, but also increasingly competitive. More suppliers will work vertically with retailers to create unique brand and product offerings.

“To be successful in 2015, retailers will need to understand and identify with their customers and be innovative by keeping on top of trends while managing complexities that the future will bring,” Maxwell said. “Retailers, along with their customers, will be more demanding, more global, more diverse, and will operate across more channels than ever before. That being said, retailers should be proactive in addressing these challenges now.”