THE INEVITABLE ONE-NESS OF PHYSICAL AND DIGITAL
Imagine this scene from the not-so-distant future: You are making breakfast while Vivian—your cloud-connected life management hub on the kitchen counter—goes through your morning briefing. A friendly voice and accompanying screen present your daily schedule, progress toward your goals, top news stories and weather, friends and family social posts, messages, and upcoming events.
It’s just getting started. “You have a meeting tomorrow and your favorite outfit is at the cleaners. Would you like to see some suggestions for some things you may like from Nordstrom?” “Sure, send them to my phone,” and voila! You can check the suggestions out on your commute, and arrange for a fitting room appointment, ready with your selections, on your trip home. Next you ask, “What sounds good for dinner?” “There is some salmon in the freezer and Kroger has fresh Brussels sprouts and heirloom tomatoes that would go well with that. Should I add some to your weekly order ‘household items list 1’ that will arrive today by 3:00 PM?” “Ok, sounds good—and two of the tomatoes please!”
Welcome to Retail Singularity, where bots, natural language voice interfaces, and broadly integrated data reacts and predicts the what, when, and why of shopping. The idea has been talked about for a few years, but it is gaining momentum in the age of acceleration and exponential technology. Derived from the concept of Technological Singularity—a term referring to a hypothetical date when machines will surpass humans in intelligence—Retail Singularity is the point at which the distinction between online and offline shopping is meaningless. This will occur when artificial intelligence can integrate our consumption patterns, preferences, and behaviors into delightful shopping experiences.
Despite progress in “omnichannel” retailing, we currently shop in two separate universes, making conscious decisions on how and where we engage with retailers. “We are close to a point when shopping will be an extension of life that doesn’t need us to adapt to it because it responds to us,” states Lee Carpenter, ChangeUp Partner and CEO. The implications are historical. Retailers must begin to see their physical stores as new kinds of assets, like local distribution hubs and, in some cases, as break-even “experiential” marketing channels. The physical space will need to be justified and purposed in new ways as the majority of retail profits will eventually come from digital interactions. Shopping will be as close as our reach, the sound of our voice, or a response to a text from sensors built into packaging. The physical store will be an option, a preference; a choice, not a necessity.
Drivers of Singularity
The future retail visions are relentless and becoming reality fast: The Internet of Things will enable smart packaging and appliances to auto replenish, or prompt you to do so; stores as inventory for same-day delivery; parking lots repurposed for product pick-up “terminals”. Amazon’s plans with Whole Foods will up the ante for grocery and beyond, and Walmart is investing heavily to lead as well.
Apple ARkit and Google ARCore developer apps for the new generation of smart phones means an onslaught of Augmented Reality tools for retailers and brands are on the horizon. AR can allow visualization of objects in context, and other yet undefined applications and experiences like comparing new sofas in your living room or alternative deck designs in your backyard. Get ready to see AR emerge as a powerful tool for decision making and driving desire and demand. And according to AR gurus, the most robust AR applications will be location dependent, relying on actual designed spaces to trigger and integrate engaging experiences. This promises that physical retail will be a venue for AR that will unlock new potential for store design and visual merchandising.
AI and machine learning will also play a fundamental role in Retail Singularity. With the ability to find patterns and correlations in seemingly unrelated, unstructured data, AI will make recommendations that magically fit situations. Based on your schedule, location, current budget status, weather, customer ratings—perhaps even your current blood pressure—expect to get an appealing recommendation on where to have lunch.
Innovation = Thinking Beyond Shopping
Already, physical and online shopping isn’t an either-or, it is contingent and fluid. There are some categories well suited to pure ecommerce and auto-replenishment, and some that are not. Also, there are need states that are better solved by one or the other, and still some that are best served through a synergy of both. When the current transitional dust settles, Retail Singularity will eliminate the task of replenishing consumables and minimize the effort of choosing between alternative products. Ultimately physical stores won’t compete for the same dollars spent online. Brick and mortar locations will fit an entirely new role—transforming from merely convenient access to inventory to filling in the natural gaps and shortcomings inherent in digital shopping with experiences. For traditional retailers, the challenge will be determining the best way to create the required synergy that will integrate digital & physical and unlock new potential. The answer will lie in using data, insights, and creativity to determine how to right-size, right-purpose, right-assort, and right-invest in brick and mortar locations.
Shopping is fast becoming an anachronistic term, like dialing the phone. The word shopping will likely endure, but the act of shopping will be vastly different—less walking, more talking—less effort and more emotion. Journey and customer experience are important but not enough. “There is a need to make sure we identify the core business problem, craft insight driven scenarios, and then use rapid visioning of solutions with a blend of digital and physical elements,” says Carpenter. At ChangeUp, we approach innovation and rapid prototyping—getting to execution quickly, we work to integrate and reconcile the role of technology and new or existing physical retail. The future dictates new business models and not mourning the sacred cows that may need to be left behind.