2020 Retail Part 1: Smart will only get smarter

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In the first part of our four part '2020 Retail: What's the future' series, we look at how the world is only going to get smarter, digitally.

Machines will increasingly be at our service. They’ve already evolved from passive objects that require being told what to do, to digital assistants that know our needs before we do. Thanks to analytics and big data, machines are already increasingly able to develop a very good idea of what the shopper wants, bringing us one step closer to Space Odyssey’s all-seeing, all-knowing HAL 9000.

Predictive service will help consumers to navigate the sea of content they’re presented with, whilst AI, VR and IoT all offer the opportunity to better anticipate shoppers’ next purchases.

Automation of cars, homes and work tasks will continue to lighten our load to allow time to focus on our lives.  We’ve created robotic tools that can perform tasks large and small, cumbersome or repetitive, more precisely and efficiently than we ever can. Whoever knew that, somewhat frighteningly, 24% of all global tweets are created by… bots.

In Hong Kong, convenience store chain Lawson and Panasonic are working together to test a staff-less checkout. Meet Reji Robo. At the checkout, shoppers place their basket in a designated area of the cashier table. A 5-way barcode reader scans every product’s barcode and almost immediately displays the total cost of the purchases. Following payment, the basket slides down through a hole in the cashier table and the machine packs the purchased items in a bag automatically, all of which is designed to help alleviate staff shortages and reduce peak-time congestion.

Research published by WorldPay in June suggests that biometrics will inevitably play a big part in tomorrow’s retail world with nearly half (49%) of shoppers saying they would like to pay for purchases in the future using fingerprint, palm, iris or facial scanners.

And, if further proof were needed, Alibaba – the fastest growing business within the world’s most valuable companies (Forbes 2017) – have just committed to investing £12bn in their DAMO Academy (or ‘Discovery, Adventure, Momentum & Outlook) and, in particular, in the creation of six R&D labs around the world over the next three years. The scope of research to be conducted in these facilities is broad, focusing on both “foundational and disruptive technology”. This will include areas like the IoT and data analysis, as well as artificial intelligence, machine learning, security technologies and even quantum computing. And, just in case anyone was in any doubt as to the scale of Alibaba’s ambitions, this research will be key for the company in reaching its goal of serving 2bn customers and creating 100 million new jobs – yes, 100 million new jobs - by 2036.

But, not everyone welcomes a smarter shopping world. Sure, just under 60% of US consumers indicated a positive attitude towards the idea of having their grocer suggest a shopping list for their approval based on their purchase history, social and environmental data. But, for those thinking a smarter shopping world is a slam dunk, it’s worth pointing out just over half of those same respondents felt that having a grocer automatically charge and ship items based on that data would be invasive...! No-one said you can always have your cake and eat it.

The retail world will also get smarter, physically. With consumers now expecting a seamless shopping experience across an increasing range of connected devices and outlets in which immediacy and convenience are table stakes, we’ll see the traditional UK high street condense, converge and shrink. Take Habitat, for instance. Going back just five years, who would have thought that they’d co-exist with, and become an occupant within, of all things, Sainsburys’ stores?

We’ll see physical spaces shrink too.

Big brands won’t need the same kind of space they once had, and online brands will invest in establishing physical presences to showcase branded and private - label products

Temporary pop-up stores, with retailers and manufacturers moving around to roadshow products, will be widespread and integral to the retail experience rather than an opportunistic use of vacant space.

In a world of crashing vertical sectors, desire for in-store experiences and destinations, the old rules are broken, and new rules are being created at an unrivalled pace. The adoption of in-store AR and online catalogues for extended aisles are already blossoming phenomena. Online retailers such as Made.com, Amazon Books and The Idle Man are popping up on the high street to offer “experience” and “try before you buy”. Brands such as Made by Google are delivering “experiences” in shopping centres and on the high street – it’s becoming much more about blending digital and physical experiences into one and delivering omni-channel experiences at every opportunity and point of brand experience.

The world of retail will move from an online vs. physical distinction to one that’s determined by the distinction between experience and fulfillment, between the digital buying experience (let’s face it, no-one ever said that shopping on Amazon was a truly memorable and emotionally captivating experience) and the shopping experience that can be fulfilled by harnessing the senses in the physical world. It’s the so-called bifurcation of retail.

We’re in a world that’s becoming increasingly phygital where only those brands that recognize the importance of embracing this bifurcation and seamlessly connecting both worlds will flourish.

Read more from our 2020 Retail: What's the future series: 


Content includes:

Retail WTF?
Smarter, faster, stronger, deeper. Key developments that will impact the world of retail.


Time to Cut Out the Plastic?
My single wrapper can’t have made a difference? Or could it?


If You Remember Just 3 Things…
Three mega-trends that will change your future brand decisions.


What's the Future?