Reading Time: 10 minutes

AI-affects-your-choices

The more internet technologies allow retailers to review their model, the more important changes will be put in place across the user experience. Here are 4 major changes that will certainly happen in the next 10 years.

1- Big Data Will Do The Shopping For You

Big-data-in-retailTwenty years ago, you would probably choose that store rather than that other one because of the person managing the place. By always going to the same store, the people working there would know your habits and how you would like things. It is the same principle as restaurants, bars, hair dresser… With modern technology we call this Data collection. Since we got connected to the web in our daily lives there is a huge amount of data that is collected about us. What we eat, drink, purchase and even where we go, what is the next holiday destination, etc. Years of data gathering is helping vendors to create the perfect portrait of their customers. We have generated more data in the past 10 years than in the entire human history. The estimated amount of “data in the digital universe” this year – 1.2 zettabytes (1.3 trillion gigabytes) – is equal to 75m fully-loaded 16GB iPads, which is 339 miles into the sky (The Guardian). We are in the era of Big Data but this concept is not new. According to the Oxford English dictionnaire, Big Data entered the dictionary in 1941 under the idea of “Information Explosion”. In 1971 Arthur Miller writes in The Assault on Privacy in which you can read that “Too many information handlers seem to measure a man by the number of bits of storage capacity his dossier will occupy.

Arthur-Miller-The-Privacy-Assault

Thanks to all these data, retailers will be able to know for sure what kind of products they need to offer to their customers, seasonality and even what kind of Pizza they should sell on Thursday evenings. With the amount of data connected to a customer, we will be able to connect our fridges and our kitchen cupboards to the web. So you could imagine getting to a store on a friday end of day and your groceries would be ready to pick up as the data will know what you need for the incoming weekend. Is this already possible? Not yet. We are currently in a pace of collecting all possible data about individuals. From their credit cards, Facebook accounts, smartphones, smartwatches, Alexas and other Siris. Now the true challenge is  about maximizing computer power and algorithm accuracy in order to analyse the information and create patterns that will allow you to map your customer portfolio. Many experts say that today the data is not clean. It is not 100% accurate, so you might end up with a pizza you do not like (not those anchovies again!). In the near future, meaning within the next 10 years, quantum computers will accelerate time of calculation and AI will learn from data and be able to create unique patterns by individuals and by situations or even emotional contexts. One interesting aspect in terms of data collection is the usage of voice control. Why companies like Apple, Google or Amazon are dramatically developing devices and functionalities controlled by the voice of the user? It is only to accommodate people? Not really. We estimate that you can collect 50% more data when you use your voice rather than a text order. With a voice control, we can analyse emotions and understand the mindset of a person when ordering a pizza (this pizza again). Let’s take the example of Search engines.

So far:

  1. You decide to search for something
  2. You type on a (virtual)keyboard the text for your query
  3. The Algorithm selects the best results based on different relevant criteria
  4. You look to the SERP and pick up the best choice according to you.

Tomorrow:

  1. You decide to search for something using the voice control
  2. The AI will analyse your query and the emotional data related to it
  3. Based on your habits and the mood, the AI will choose a specific list of possible choices
  4.  You will choose the best choice you think appropriate
  5. AI will learn from this and improve relevancy for next time.

In ten years time:

  1. AI will undertand, based on your consumption and emotional patterns, that you will
    need a nice big and fat pizza tonight (having a hard day hein?)
  2. It is Thursday evening, so AI knows that generally you ask for a restaurant around 19:30
  3. At that precise time, you will get a notification from AI asking if you need a restaurant for tonight?
  4. The user will use his voice to say “YES PLEASE”.
  5. Based on the emotional information collection in this order, AI will realize that the user had a tuff day, so AI will propose to book a table at your preferred pizzeria
  6. AI will contact the restaurant to book a table. This can happen via phone call or by email.

In Fifteen year time:

  1. Same situation as above, but AI will decide.
  2. No need to ask or to provide an order
  3. No need to pick up the final choice as AI will know best.

Sounds science-fiction? Not really. Google has already tested several intelligent algorithms that can call real people to make an appointment with great success even in tricky situations. Marketers working on SEM or SEO will need to find the right balance on who will they be targeting with their search campaigns? The AI or the user? In any case, by analyzing the data for so many years and by developing and improving technology, any physical store will know from the moment you cross their doors what you will buy that day.

2- Virtual Reality Will Show You Stock Availability

virtual-reality-ecommerce

Talking about technology, there is one huge democratization happing right now: Virtual reality (VR). Remember last Christmas? VR helmets and devices were top of the sales. Today anyone can have a VR experience at home. Top retailers believe VR will help customers to browse product catalogs. This will help trial but also expanding your choices. Why retailers are so interested in virtual reality? There are several points that forces the business in this sense:

  • Space and time: you can offer a much wider choice of products in a limited space. You can also decide about seasonality or context.
  • User experience: with VR you can decide about interior design even if this would challenge the laws of physics!

Hold on a minute! We are talking here about Virtual Reality (VR), but what about Augmented Reality (AR)? And what is the difference? To make it simple, Augmented Reality is just reality with some enhancements. This will probably be more used by professionals like doctors, engineers, designers or drivers. Virtual Reality is about immersion. Let’s take the example of Lexus. This year the automotive brand offered to its customers a driving experience thanks to Oculus Rift. Lexus believed that offering a test drive on all their models with VR was far more “immersive” than using a traditional driving simulator. Of course nothing replaces a road drive but sometimes you cannot offer it, especially with incoming models.

3- Home Delivery By Drone Or Automated Truck

No matter if you buy online or if you call or even if you go to a store and ask for home delivery, you might get used to Drone-Delivery. Currently tested by Amazon, Drone delivery would solve many problems related to the last part of a purchase journey: the delivery. By reaching specific points, the drone will be able to deliver your package safely to your home. This might apply to rural areas in which space is not a problem. Probably drone-delivery will be a challenge in the city center of HongKong. Drone delivery can also be used for returns. Imagine that you do not need anymore to go back to the post office to send back something you do not want anymore.

4- No Physical Check-outs Anymore

Digital-check-out

After one hour of shopping at the grocery store, the most annoying moment is the check-out. You need to queue at the cash-register, take all your products from the basket, put in on the counter, then back again and finally pay with cash or credit card. You can also extrapolate this to a restaurant, post office, cleaning service, anything requiring a payment checkout. What if in the future you can physically skip the check-out process. What if by entering a store, they know who you are and when you leave, we know exactly what you bought? This means you can receive a payment confirmation by email and the invoice was automatically paid via digital. Would this work via your mobile phone or via another device? Currently mobile phones become the common denominator within all people. Apple is already implementing Apple Pay by default in all new devices and Amazon is successfully experimenting Amazon Go. Today, Apple Pay counts around 87 million active users around the world. They are far behind market leaders like WeChat pay with its 600 million Chinese users or even PayPal with 210 million. Here below the number of users by mobile payment platforms (source: Statista).

number of mobile payments in the world

We can see that Asia based companies are leading the way but from a geographical repartition point of view, things seem more balanced than what we would think. Here below the geographical split by mobile constructors payment platforms.

Mobile-payments-by-phone-providers

Despite the fact that the total number of available markets is small, there is an interesting split around the world. So we can see that the next battle will be: “who owns the credit card information“? With the mobile device, that is personal, unique, secured, you can imagine a worldwide system that allows users to make payments and check-outs without noticing it in the physical world. By the moment you enter a store and take things from a shelf, technology would be able to track and record it. So by leaving the store you can get a notification saying “here is your payment recap”. This technology will be more and more employed as sometimes it would be easier and safer than local bank systems.

Artificial-Intelligence-CRM

Last but not least, we can wonder what will be the impact of technology to CRM? Will be Artificial Intelligence managing customers relationships? Will be a digital assisted guidance? Currently it is very hard to differentiate AI from a real person at the phone. Google made some tests and we can see that the decision making process done by AI is 1000 times more efficient than a real person. Then, the most important question is about all the small “irregularities” in the human relationship that makes that brand better than other. Often, what makes you connected to a brand is not their capability to solve problems, it is their way of solving them. In Luc Besson’s film The Fifth Element, the hero character played by Bruce Willis, request for client support. The system asks him if he wishes to speak with a machine or a real human being. What a metaphysic choice! Let’s hope we will not get into such extreme situation. After all, may be, all of this is just for a pizza.

José Amorim

Info sourced by the author for luxury activist.com. All content is copyrighted with no reproduction rights available. Images are for illustration purposes only.