The retail future isn’t about products—It’s about possibilities
If you want to buy a bike today, chances are you research parts online, ask your cyclist friends for tips and visit multiple shops to try out frames. Imagine walking into a next-gen retail bike shop with nothing more than your data—from your fitness tracker, health apps, GPS, body scan, purchase history—and the cyclist guru staff designs the perfect set of wheels for you on the spot. They might even have the 3D equipment in back to make it while you wait. Print bike, ride bike. Boom.
The retail future will more closely reflect who we are
That scenario still might be a few years off, but retail—coupled with IoT connectivity—is quickly erasing the lines between physical and digital shopping. Sensors, connected and coupled with machine learning systems, are learning about our preferences faster than we can process our own needs and wants. The result is a future where shopping isn’t about what products are available. It’s about what’s possible.
We already have sensors that automatically check out customers and restock inventory, facial expression detectors that read people’s first impression of a product, and VR that lets shoppers visualize how items look on themselves or in their homes. But as tech takes over every aspect of retail, the shopping experience will become more bespoke and personal. With IoT, merchants will know our needs before we do, and they’ll make routine shopping so simple we won’t have to spend much time or energy on it. Meanwhile, AI and advanced manufacturing will help us create products that reflect in a much more intimate way who we are and what we want.
Moving shopping into the background
Retailers are expected to invest some $2.5 billion to implement IoT technology in their stores by 2020. In isolation, these new IoT tools are powerful. RFID tags track inventory throughout the store; shelf sensors ensure inventory is on display; and mobile payments negate checkout lines. In concert, the data streaming off of these technologies creates a radically different shopping experience.
Retailers are starting to embrace AI and computer vision to eliminate many of shoppers’ biggest headaches, such as not being able to find the right product, idling in long checkout and return lines, and rifling through wallets to find the right cards and coupons. Cognitive computing systems will eventually extract the data they need from our households, our products and us—and help us make decisions about the most immediate and obvious of our shopping needs. A cognitive system might read your calendar, which indicates you’re throwing a dinner party on Thursday. It connects to your fridge to see what ingredients you have, analyzes data about seasonal produce and guests’ dietary restrictions, and suggests a menu.
You happily accept and the items arrive on your doorstep just in time to prepare.
As marketing professor Werner Reinartz explained recently, “we’re never not shopping”—we’re just growing increasingly unaware of it. Sensor data from devices entangled with our physical existence across the spectrum of our physical existence—wearables, cars, refrigerators—is the commodity that will drive programmatic commerce and transform today’s mundane consumer goods into connected points of sale.
Converting stores into studios
These same technologies that are helping customers find the perfect items more easily today will be used to build one-of-a-kind everything for them in the future. By pairing additive manufacturing—an industry that grew by $1 billion for the second year in a row—with cognitive systems, retailers can literally print goods that match shoppers’ exact specs. Bike shops will become more like studios, where people go to build bespoke gear using data from the sensors and systems they interact with every day.
For retailers, supply chains and operations change dramatically. Transportation companies are already investing in 3D printing, an indicator of how their role might shift from shipping end-products to positioning inputs. Stores won’t have inventory; they’ll have the materials to make what their customers need.
By collecting, combining and drawing insights from shopper data, retailers and suppliers will be in a perpetual state of innovation. Instead of thinking in terms of end products, they’ll constantly beta test offerings and tweak them on the fly. If the bike shop sees in your fitness data you’re training for a triathlon and not hitting your performance goals with that new bike, the store manager might reach out and suggest a different tread for your tires to hit higher speeds.
Not all shopping will be so passive. For non-routine purchases like furniture and electronics, the buying experience will become ever more personalized and empowering. Armed with data about buyer behavior and preferences, brands start to know their customers at a level that is totally new, on a mass scale.
Today, that means retailers can make more customized recommendations. When shoppers try on clothes, “smart mirrors” in their dressing rooms suggest complementary items, save clothes to a virtual list so they can remember them or buy them online later, and tell them if products are available in different sizes and colors. Customers are optimistic about the potential: most millennials say they’d appreciate a brand using AI to give them recommendations.
Analyzing real-time data about our individual context, retailers will soon have the capability to build the products to match and exceed our expectations. They’ll remove the friction around searching for and buying goods, freeing up people to spend more time doing what they enjoy, whether it’s pedalling 50 miles on a hilly road or cooking in that perfectly suited kitchen. They will also give us new ways to express individuality. Rather than all sharing in the kindred benefits of mass-produced products, people will live in a world with products that reflect their unique potential.
Learn more about the IoT connected store.