Shoptalk and South by Southwest ran consecutively this year. In spending time at both, certain correlations stood out. The implementation of artificial intelligence in retail was examined in detail at Shoptalk, whereas its role in our overall economic activity and lives was an overarching theme in Austin at the SXSW Interactive Festival.

The Term Artificial Intelligence is Becoming a Catch-All

Before we go any further, it might be useful to set a baseline for AI. A simple definition of artificial intelligence according to futurist, professor, and author Amy Webb is, \”In its most basic form, artificial intelligence is a system that makes autonomous decisions. The tasks AI performs duplicate or mimic acts of human intelligence, like recognizing sounds and objects, solving problems, understanding language and using strategy to meet goals.\” With the explosion of computational power, these tools, first developed in the 1940s, have developed exponentially, and have quietly been woven into our daily activities. While typing the Amy Webb quote above, artificial intelligence, which informs my software, kicked in and highlighted a spelling error. Consider the magic behind Spotify, your Netflix queue or home voice assistant, and you will quickly recognize that beyond business applications, artificial intelligence lives with us, and we may have become so accustomed to the efficiencies it offers that AI is more than the new invisible hand, it has become our collective invisible brain.

In retail we see this brain at work in the utilization of predictive customer preferences, inventory efficiencies and supply chain optimization. Beyond efficiencies, artificial intelligence is foundational to subscription retail businesses like StitchFix and critical to most fast-fashion brands.

Humans and AI- Working Hand in Hand

Mike Smith, President and Chief Operating Officer of StitchFix, was at Shoptalk discussing their secret sauce, which is composed primarily of two ingredients: robots and humans. StitchFix creates its individualized \”Fixes\” or boxes using a combination of artificial intelligence and stylists\’ knowledge to provide a customized selection for their subscribers. In turn, StitchFix subscribers provide an abundance of data to the company as they respond to the products in every box, which only improves the AI\’s predictive power. StitchFix also offers an online and app game called Style Shuffle. Smith described Style Shuffle as a swipe right, swipe left exercise that gives the company reams of data on what people would choose to wear. According to a recent article in Fast Company, Style Shuffle led to a new initiative called Latent Style. Latent Style is a sorting system for \”fashion clusters.\” A flouncy-dress or clean-lines cluster are two examples. The predictive system then informs the individual stylists on how a customer might respond to a piece of clothing.

ReCode founder Kara Swisher described herself as a StitchFix conundrum during an interview with Hudson Bay\’s CEO Helena Foulkes at Shoptalk. Swisher, whose stylist finally came up with a few items she decided to keep after many fix-misses, asked Foulkes about her company\’s philosophy on customer data and how it informs their AI initiatives and overall planning. While not addressing artificial intelligence directly, Foulkes described the customer/brand data exchange as making it possible \”to know what you love and to make it more relevant, and easier for you to shop with us\”.

Investment in AI for Retail is on the Rise

Shoptalk holds an annual session entitled \”New Insights on Retail from Top Universities.\” This year George Washington University Professor Donna Hoffman gave a detailed overview of both the current utilization and future integration of AI in retail. In her short but chock-a-block presentation, Hoffman shared some statistics gleaned from a 2018 report by Capgemini, which stated that four percent of retailers deployed AI in 2016, 17 percent in 2017, and 28 percent in 2018. Further, Hoffman shared that the largest retailers (over $108 billion in revenues) are the biggest investors, and forty-one percent of the top one hundred retailers currently use AI. She discussed the efficiency gains and cited numerous AI -powered activations currently utilized in retail including automated checkout, customized manufacturing, fraud detection, shopper tracking, dynamic pricing, shopper incentives, and targeted coupon strategies.

The AI Effect on Inventory is a Win for Retailers

At Shoptalk I caught up with José P. Chan, founding team member and current board member of the retail analytics platform Celect about AI utilization in retail. According to Chan, \”Prior to the use of Machine Learning, a branch of AI, retailers would use historical data and gut intuition to predict future inventory outcomes. Today, they have better tools that provide crisp guardrails, which allow retailers to make better inventory decisions.\” As inventory selection is better informed through utilizing Celect and other predictive analytics platforms, retailers are increasing their efficiency as merchants, prompting lamentations from bargain hunters as inventory selection becomes more efficient and there are fewer markdowns.

Switching back to South by Southwest, Kohl\’s Senior Product Manager of Artificial Intelligence and Technology, Grace Burgio, gave a concrete illustration of their new inventory AI-informed best practices. She described Kohl\’s previous use of \”glorified Excel-based tools\” to plan assortment saying, \” It is very difficult to function this way to ensure that every store gets the optimal merchandise for the customer in every location.\” Kohl\’s is now working at the store SKU level using AI to manage inventory and assortment \”to disrupt inventory placement, and how we sell our merchandise.\”

The Rise of the Intelligent Chatbots

Burgio also touched on Kohl\’s use of AI in chatbots for customer-service platforms. She said, \”Kohl\’s is chipping away at the highest volume chat topics and blending in AI where it is appropriate. Areas such as order tracking lends itself to an AI solution. When an upset customer is calling, and they want to vent, we know that is something that we want that handled by a human being.\” The key phrase form Burgio\’s comments is: \”when appropriate.\” The development of an AI functionality that can differentiate between these two types of human/robot interactions was a common topic at SXSW. Advances in a chatbot\’s ability to interpret natural language, thus determining the correct moment for a bot to human handoff is rapidly improving. This progress in language processing is moving beyond the chatbot. In fact, the consensus among many of the speakers at SXSW was that keyboards will soon be obsolete, and most of our computer interactions will be voice activated.

At South by Southwest MIT professor Aleksandra Przegalinska discussed a leap in human-bot interaction through the development of the Google Duplex, an AI trained technology for the Google Assistant. When the technology debuted in May 2018, the verbal dexterity of Google Duplex, complete with um-humms and other very human responses, was so advanced that it was met with skepticism. The company then invited individual reporters to experiment with the technology to prove its veracity, which it did.

Artificial Intelligence as a Member of the Family

Przegalinska went on to describe the very real relationships developing between her young children and Alexa. This generation of children are growing up with Amazon\’s home assistant, along with those of other platforms who answer the questions they used to ask of their parents, who read them stories and are ethereal members of the household. The relationships represent a new cultural blurring of the line between humans and robots. This is where I am going to ask you to pause and let that sink in for a minute. How do we as retail strategists plan for this emerging generation of consumers who will become active in 10 to 15 years? As we sit in conferences and absorb these shifts and technological developments, we need to recognize that the reality that what seemed like science fiction in the past is fast becoming reality. The time to play out the possible effects of these changes and begin to model for them is now.

Do you remember the term \”information superhighway?\” In the early to late 1990s it was the go-to expression used by every journalist, techno-geek and politician to explain the speed at which data was transmitted over the web.

However, the high-speed chase is accelerating with the advent of 5G technology, the designation for the 5th generation of mobile communication that could bring enormous benefits to retailing -or the biggest headache since you tried explaining the internet to your grandmother.

Digital Revolution

At its most ambitious, 5G is being billed as a new industrial revolution capable of transforming the customer experience. It is going to make driving the old information superhighway feel like a buggy ride down a country road. Data speed will be an estimated 100 times faster than the now-standard 4G and will be measured in gigabytes per second, enabling anyone to download and transfer data in seconds instead of minutes.

We\’re not only talking about smartphones, laptops, smart TVs and Smart homes. 5G will enable the advent of smart cities that bring cheap, ultra high-speed connectivity to every urban area enabling these areas to reduce traffic congestion and improve air quality and to rural areas where connectivity has been spotty.
The former is particularly important since an estimated 68 percent of the world\’s population will live in urban areas by 2050, according to United Nation\’s statistics. In fact, spending on smart city technology will reach $158 billion over the next three years led by Singapore, Tokyo and New York, according to IGD research.

On a personal and more humble note I look forward to any techno-evolution that will let me get a signal in my kitchen.

Sands of Time

For retailers, 5G will be the ultimate expression of the \”consumer experience,\” a strategy that often fails to produce what it promises. Not so with 5G. That spinning multi-colored circle and the excruciatingly slow hourglass that mark downloads and connection times will hopefully be a thing of the past. In a world focused on IoT and millions of IoT devices screaming for connectivity few things are more important.

There is also a new word being used in the 5G data transmission game-latency, or the speed at which data moves from a cell tower to any mobile or home device. The reduction in latency will help reduce traffic overload and lead to immediate website connection and super high-definition mobile video content. Imagine what this might mean for online sales during the holiday season when speed is of the essence. Or giving consumers the ability to receive mobile holograms, a sci-fi function that has yet to come to fruition.

Some in the IT world love geeking out with discussions of beamforming, pathloss, spectrum efficiency and the ever-popular MIMO (multiple-input, multiple-output). But the needs of consumers are far simpler. They just want to get the goods.

Enter the Dark Side

There is always a downside to new technology and 5G is no different. For one thing, the technology is still being developed and few experts in the field expect it to be fully operational for commercial use-and without its bugs-any time soon.

Even if it were out there en masse, 5G smartphones are going to start out being ultra-expensive and most consumers-even the most rabid Apple munchers-are not going to lay out the coin to replace their current models, particularly if the economy decides to take a dive.

Companies attempting to build or upgrade their own networks are also going to find 5G expensive and will have to allocate funds to hire skilled engineers and put in the manhours to maintain the system.

This is being complicated by political issues. For instance, the U.S. is trying to get a global ban on Huawei, China\’s 5G network supplier, due to fears about cyber hacking and lack of protections. Cyber intrusion is simply a fact of life. But from a risk management perspective, some observers feel 5G is particularly vulnerable at this point to being taken over by \”bad actors\” who salivate at the thought of controlling digital communications for things like autonomous vehicles. Basically, nextgen technology requires nextgen security that will be able to protect what\’s been called an \”oversized attack surface\” resulting from the expanding use of IoT devices.

Hacking and Whacking

It\’s a game of whack-a-mole with hackers around the globe already working on ways to break into 5G networks. Nothing is hack-proof and it\’s going to take a significant amount of time for security issues to be resolved.

As to privacy, it\’s easy for companies to overstep boundaries since no one has sufficiently described where those boundaries are. Everyone knew the genie was out of the bottle the first time they posted on Facebook, Tweeted what they had for breakfast or ordered their first item online. But the faster the technology the more out of control it can get so data discretion on the part of 5G operators is essential.

And if you think 5G gives you a point of differentiation you may run into competitors who try to use it against you. This is already happening with Sprint barking that it\’s main rival AT&T is engaging in false advertising by using the term 5G Evolution for its wireless offering. Now Sprint is suing AT&T. Sour grapes begets sour grapes and customers are still in the dark about what it all means – if anything.

However, don\’t let this derail intra-company discussions about the advantages of 5G to the company. Just make sure you know what you\’re talking about and offer real information about this nextgen technology and not just an advertising tagline.

There is time to get things right. Conventional wisdom has it that 5G won\’t be available commercially until 2020 at the earliest and only if new network architecture is developed and installed. Mobile companies like Samsung, Nokia and Verizon are joining forces to create one 5G standard platform.

Even with billions of investment dollars being pumped into this technology by these companies and their home countries any system has to be approved by 3GPP, the global body that will give a yay or nay to the specs.

Planned Obsolescence

However, if history teaches us anything it is that the new eventually pushes out the old, meaning that the current 4G platform will be rendered obsolete. In addition to data speed, this will spark development of new applications including better control of autonomous vehicles and a wireless, virtual reality headset.

The latter could enable customers to walk through stores, pick up items, try them on and pay for them without leaving their living rooms. On another exciting, but frightening front, a doctor in Frankfurt could operate remotely on a heart patient in Los Angeles.

What can really makes one\’s head spin is that even before 5G is out there, some people say 6G is waiting in the wings. Whether this could exist and what the advantages might be has created some heated debate in the tech world.

But as a child of the 60s, allow me to quote the wisdom of the writer and poet Khalil Gibran whose seminal work The Prophet was required reading-\”Progress lies not in enhancing what is, but in advancing toward what will be.\”

The Store of the Future Should Never Be About Buzzwords

Take, for example, this introduction to a piece I came across regarding the future of store design in one of my favorite daily retail roundups, Retail Dive: What does experiential retail even mean these days? For some it\’s sprinkles, others it\’s meditation pods. What really matters is localization, service and shareability.

Say what? Come again?

Retail buzzwords are useless. They are meaningless semantic throwaways that bring us neither closer to understanding what the long-term retail future will be nor what the next year will bring. Words like these often sound \”futuristic,\” but just having a \”-tion\” suffix on the end of a word doesn\’t make it more powerful.

We need to be more demanding. We need to demand less obfuscation from our pundits. We should no longer accept \”-tion\” suffixed words or nebulous acronyms like AI, ML and the like. Instead, insist on clear descriptions so that when people actually come across a store of the future implementation they understand exactly what they have just seen. A master example of obfuscation is famed Supreme Court Justice Potter Stewart who once described pornography back in 1964:

\”I shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description [\”hard-core pornography\”], and perhaps I could never succeed in intelligibly doing so. But I know it when I see it, and the motion picture involved in this case is not that.\”

The Defining Characteristics Are Clear

Unlike Justice Potter, we objectively know it when we see it. While the ultimate expressions of futuristic retail will be different across brands and retailers, there are a few defining characteristics that every well-designed store of the future will share over the next decade. Three simple rules reveal whether you are looking at a fake or a truly futuristic retail experience:

1. Shopping and Buying Will no Longer Be Conjoined at the Hip

Throughout retail history, the psychological acts of shopping and buying (i.e. acquiring product) have been conjoined like Siamese twins. For decades, consumers have walked into stores, browsed products on shelves and then picked said products off the shelves themselves. Consumers had no choice but to play the role of warehouse workers. With sophisticated digital technologies, like our mobile phones, voice, messaging, visual search, etc., shopping and buying will become entirely separate acts.

Best case example: take IKEA and modernize it with technology. Consumers browse IKEA with pencil and paper in hand to record the names of Swedish furniture they cannot pronounce and then venture into huge back-of-house operations to pick heavy boxes off of shelves only to wait in long lines to pay. Imagine this: they browse the floor with their mobile phones and simply point at the products they want to buy; then robots pick and pack their order as they continue to shop. The consumer now has total power in choosing how to buy and acquire the products that he or she likes with in a frictionless experience.

In many ways, the entire world soon becomes a consumer\’s e-commerce doorstep. Want product waiting at the car? Ok. Want it delivered to the house? That\’s ok too. The choice is entirely in the hands of the consumer with the quick tap of a button. How consumers shop and how they buy will transform with choose-your-own-adventure technology controls.

2. Data Will Follow the Customer Across Channels in Real Time via Cloud Point-Of-Sale Networks

You would think the above description would be commonplace by now, but it is not. Retailers do not have the same real-time understanding of consumers within the physical world that they do in the digital world. Such knowledge requires finely integrated connection points across retailers\’ POS, OMS, and ERP systems, facilitated by cloud computing.

POS is the most important leg in the stool. It\’s the transaction log, the book of record for how customers vote day in and day out. So, one of the most obvious indicators of authentic store of the future operations is . . . wait for it . . . a cloud-based point-of-sale system.

A cloud POS system is required to understand customers in real-time (to process and to record their activities in the physical world) and then to be able to connect that activity to all previous or future activities within the digital world as well. Then and only then can 100 percent real-time analysis and personalization (\”-tion\” suffix pun intended) to benefit the consumer actually happen.

3. Physical Movement Will Be to a Store What a Mouse Is to Web Commerce

Any relevant design for the store of future will take location analytics seriously. Very seriously. Used in tandem with the concepts discussed in points #1 and #2, location analytics will turn a consumer\’s physical movement into the analytical equivalent of a mouse moving across a digital screen. Retailers will be able to leverage analytics within both the physical and digital worlds.

Data scientists will use data streams to understand how long customers linger in certain parts of a store versus others and what products they look at and buy or don\’t buy. The data will also provide insights on how to drive increases in basket sizes and larger transactions.

My favorite example of the power of data is knowing whether having sales associate Joe was actually good or bad for the customer in the long-run. Human interactions can do as much harm as good, and right now physical retailers have little data on the quality of their human interactions, outside of those horrendous surveys that few people fill out.

There are several ways tech can help. It can be done with a myriad of data-based innovations working in concert: traffic counters, mobile tech, RFID, etc. The solution will be different for different retailers, but at the end of the day, the effort will apply the full extent of e-commerce analytics to the physical world by way of advances in location tracking.

Don\’t Be Fooled by the Fakers

Separating the contenders from the pretenders is no easy feat. Following the three rules is a far better litmus test than any Rorschach test-like buzzwords. Fake news abounds about store of the future initiatives, from VR in parking lots to drones monitoring stock replenishment to new private label product introductions on a weekly basis. Sexy PR messaging like this serves as nothing more than tabloid fodder on the shelves of progress.

Many retailers, as much as they try to dress up as futurists, aren\’t even close. Not Walmart, not Macy\’s, and not even Amazon\’s latest and greatest invention, Amazon Go, checks off every box on the list. Amazon Go, while perfect for certain use cases, is just a fancy re-imagination of old-world retail where shopping and buying are as conjoined within the Go experience as Matt Damon and Greg Kinnear are in a Farrelly Brothers movie.

The real art, the real stuff, the good stuff lies somewhere else. It lies overseas. Actually, it lies in China. It lies within the Alibaba Hema Supermarket, and this picture says 1,000 words.

The gentleman in the picture has the entire shopping experience at his fingertips. Should he want a traditional grocery shopping experience, he can have it. Should he want to scan, bag and leave the store having paid electronically without talking to anyone, he can do that too. Should he want to scan product and have the product delivered to his home later in the day, he can do that as well. And all the while, Alibaba\’s super data streams record more about this individual\’s real-time actions in the physical space, via the cloud, than traditional retailers have ever dreamed.

Alibaba\’s conscious experience design choices of separating buying from shopping, of recording every action and reaction in real-time via location analytics, and of linking both its offline and online retail experiences through cloud point-of-sale systems surface up the first, best look at a true store of the future design.

The expression is simple. It is easy to see. It is easy to know. Walk into a true physical store of the future and you will know it right away because your experience will be 100 percent personalized for you, just like it already is within digital commerce today. Walk into a true store of the future experience and your experience won\’t be like anyone else\’s, anywhere.

That is the next great innovation in retail – the personalized physical store – brought to you by the three main ingredients mentioned above and as clear as day when you know what to look for.

I\’d like to think of my role in the retail industry as an advocate and messenger, supporting the transformation and advancement of the industry by sharing strategic insights. My ability to do this is staying on top of emerging trends and developments – particularly technology initiatives that are moving at warp speed. On that note, Intel recently launched a big one. I\’ll get to it, but first, some context.

Everything, every service and everybody in the world is being connected, more quickly, precisely and efficiently. It\’s made possible by technology systems that can talk to each other. This ecosystem is rich with transparent information and open access for everyone, including all of commerce. And even as the concern about personal security grows, spiked by intentional misuse of third-party data aggregators and unchecked sale of personal information to marketers, the mountains of data being mined, interpreted and implemented is a good thing.

Yes, companies like Facebook may become more regulated, but will continue to aggregate more and more information about individuals around the globe. And I\’m only using Facebook as one example of every digital touchpoint that we make during every minute of every day with cameras and sensors following and interacting with us wherever we might be. We cannot hide. And as technology continues to communicate, connect and interact with more and more individuals and enhance their activities, data mining will expand exponentially.

According to Berkeley\’s School of Information, between 1999 and 2002, the amount of information communicated was equivalent to 37,000 Libraries of Congress (each of which holds 22 million books). And between 2002 and 2013, it was estimated to have grown tenfold.

So, rather than succumb to a dystopian view, this brave new tech world should be embraced as a positive opportunity to expand the scope of our lives. It offers greater knowledge, a more expansive network of human and personalized commercial interactivity, more precise, focused and efficient use of our time and the knowledge gained through the synergy of \”crowds\” which can help us leapfrog incremental solutions to large-scale fundamental solutions and change.

Jeff Bezos gets all of this: Amazon leapfrogged over the entire retail industry (and still does). Their sophisticated understanding and use of AI makes it possible for the systems across their value chain talk to each other seamlessly integrating a demand-driven, efficient, quick and convenient distribution chain, from sourcing all the way through to fulfillment with the consumer.
Traditional legacy brick-and-mortar sectors have been slow to adopt to technology, not because they don\’t intellectually understand what needs to be done, but rather, it\’s the daunting magnitude and complexity of getting it done. As one executive put it: \”It\’s like flying a propeller-driven airplane and while in mid-air, changing the engine and all of the parts, to become a jet.\”

Enter Intel as a Catalyst for Retailers

Help is here! Intel is leading a collaborative, retail community-focused initiative to provide retailers with fundamental (vs. incremental) frameworks for growth. Intel\’s Open Retail Initiative (ORI) was launched at NRF\’s Big Show, 2019, by Joe Jenson, Intel\’s VP, Internet of Things Group and General Manager, Retail Solutions Division. He said, \”Ten years ago, Intel formed the Retail Solutions Division at an opportune moment – the industry was ripe for disruption. At the time, the average store could barely make use of the information at its disposal. Because systems couldn\’t talk to each other, nothing happened in real time. Retailers were giving up billions of dollars due to poor inventory management. And with little in the way of shopper analytics, they couldn\’t easily understand their customer or personalize their in-store experience. In many, if not most, cases, shoppers walked into the store better equipped with both information and technology than the sales associates who were supposed to be helping them.

\”Now, a decade later, the fundamentals of retail haven\’t changed. Retailers that stay relevant have always focused on experience, quality and curation. Consumers are now expecting those fundamentals in a different way, and we\’re (Intel) here to help. At Intel, our job is to be a catalyst for our customers and partners making that customer journey seamless – whether it\’s curating immersive and personalized shopping experiences, fine-tuning inventory and supply chains, or driving operational efficiencies – so they can reinvest back into the customer experience.\”

Intel\’s Open Retail Initiative (ORI) is the first internet of things (IoT) open-source initiative that focuses on enabling retailers to unlock the power of data and insights within their businesses to scale and address market challenges. It removes barriers between innovators by connecting technologies and data through common, open-source frameworks. It promotes a free exchange of ideas within the retail industry to drive creative and technological advancement. Through collaborations within the EdgeX Foundry alliance and ecosystem partners Canonical, Dell, Envirosell, HP, JD.com, JDA, Petrosoft, RetailNext, SAS, Shekel Brainweigh, SUSE, Toshiba Global Commerce Solutions, Verifone and VMware, Intel is removing barriers to technology adoption.

The ORI has the potential to accelerate iteration, flexibility and innovation across the industry. It provides the advantages of technology cost reductions, a quicker understanding of how to implement transformation, more efficient inventory optimization, and most important, elevated personalization in product, service and experience.

Whoa!!! How great is that? If these KPI\’s are of interest to you (how could they not be?), accept Intel\’s invitation to join the Open Retail Initiative. Link: https://www.intel.com/content/www/us/en/retail/open-retail-initiative-article.html

To learn more and how to participate, Intel is hosting workshops across the globe with details on how to get started. Please email all inquiries to: orievents@intel.com or contact Camilo Dennis at 1-480-552-2609.

It\’s an incredibly exciting time to be working in the retail industry. Ten years from now, consumers will look back and say: \”Did shopping really look like that in 2019?\”

It\’s no different than looking back about a decade to the introduction of the smartphone, which has changed our lives in countless ways by making the internet available anytime, anywhere for just about anything. Or 10 years before that when we were still in the very early days of the internet, and cordless phones and portable CD players were all the rage.

It\’s a Time of Great Opportunities and Challenges in Retail

Those organizations that lead the way with disruptive propositions will reap outsized rewards. But the effects of retail\’s transformation will not be evenly distributed among today\’s players. Some will successfully follow the leaders and secure key benefits, but many will fail to keep up and decline. Simply put, those that try to address exponential change with incremental innovation stand to lose the most.

To understand the magnitude of the coming changes in retail, it\’s critical to take a long-term view — progress shouldn\’t be measured only at specific points in time, such as year over year or one holiday season to the next. Why? Because it\’s human nature to overestimate the change that should happen in short-term cycles and underestimate the change that will happen in longer-term cycles of 7-10 years or more. While it might seem that progress is always frustratingly slow, the reality is that retail is on track — like every other industry — to evolve fundamentally as we approach 2029.

Below we list 75 key ways we at Shoptalk see retail shifting — yet these capture only a small fraction of what\’s changing in retail. We\’ll address these themes plus more at Shoptalk through our many sessions and curated interactions.

The New Digital Retail Organization

1. Running a retail organization — whether digital or physical — will increasingly mean running a technology company, mandating changes in skill sets, hiring, culture and more.
2. New titles will emerge at the most senior levels of the organization that reflect the shift to a technology-driven organization, including more data scientists and AI experts.
3. The culture of retail organizations will shift as millennials move into leadership roles and Gen Z makes up a larger part of the workforce.
4. Digital expertise will be a hiring factor in every role across the organization.
5. There will be more moves between departments as employees look to improve their understanding of all aspects of the business.
6. Concerns over privacy and the use of customer data will create new roles in the retail organization.

The Transformation of the Retail Industry

7. The next generation of retail leaders will be more likely to hail from digital or startup backgrounds–and will be more female as well as more diverse.
8. Retail industry stalwarts will continue to go under, leaving opportunities open for retailers that have invested and adapted to meet changing consumer demands.
9. The retail real estate market will continue to evolve to feature smaller footprints, pre-built-out stores, and shorter-term leases.
10. Shopping center operators will offer far more digital in-store options to their tenants, providing less tech-savvy retailers with the ability to provide new services.
11. Marketplace offerings will only become more critical to retailers.
12. Rental and preowned options will increase as consumers regularly update looks for social media and as consumer attitudes toward ownership and sustainability change.
13. Chinese companies will remain at the forefront of global retail innovation, outpacing their American and European counterparts.

The New Era of Marketing ROI and Attribution

14. Marketing campaigns will adapt automatically to reach the right person in the right place at the right time.
15. The lines between social media and other forms of marketing will blur.
16. Paid, owned and earned media will all become just media.
17. Marketers will gain a new level of insight into the exact path to purchase.
18. Marketers will become more adept at measuring the value of influencers they work with.
19. Reaching consumers in-store or at point-of-purchase will become an increasingly important marketing campaign KPI.
20. Mass media campaigns — and mass media — will become less and less important.
21. Direct-to-consumer startups will look for new ways to scale as customer acquisition costs rise.

Next Generation Ecommerce and Omnichannel Retail

22. Pick-up options will become more diverse and widespread, and there will be greater focus on drive-through offerings.
23. Search results and customer service responses will increasingly be generated through natural language text and voice, and will nearly flawlessly match the intent and preferences of the shopper.
24. The returns process will be simplified, making it far less painful for retailers and consumers alike.
25. Technologies that enable shoppers to visualize products on their faces and bodies, and in their homes and gardens, will become table stakes in categories like beauty, apparel, furniture, home improvement and more.
26. Mobile-enabled shopping experiences will play a bigger role in stores as they allow shoppers to learn more about products and add them to their baskets.
27. Social networks\’ e-commerce offerings will finally hit full stride, with buying options being seamlessly integrated into feeds.
28. Visual search will become widespread.

Technologies Creating New Retail Experiences

29. Every aspect of the store — from shopping carts to coolers — will become more intelligent.
30. Robots will become increasingly common in store aisles.
31. Digital shelves will proliferate.
32. Automated warehouses — combined with new pick-up and delivery options — will reduce fulfillment times, changing consumers\’ definition of immediacy.
33. Facial recognition will be even more widely used to identify shoppers.
34. Consumers will expect personalized experiences both offline as well as online.
35. Shoppers will be less impacted by out-of-stocks as endless aisle capabilities and delivery options improve.
36. Cashierless checkout will become far more common, with scan-and-go or camera-based systems contributing to more frictionless retail experiences.
37. Augmented and mixed reality technologies will be used primarily for fun/experiential in-store applications, but also for navigation, promotions and product information.
38. Voice will be used far more extensively as a communication interface.

Leveraging AI and Machine Learning

39. Artificial intelligence and machine learning will be deployed across the supply chain, optimizing the most inefficient parts of retail.
40. Demand forecasting improvements will make DCs more efficient and reduce out-of-stocks at physical stores.
41. Serendipitous discovery will become more common as retailers and brands better predict which products and experiences will delight each shopper.
42. AI will help in-store staff give shoppers more relevant and useful guidance based on shopper preferences and past purchase information.
43. Shoppers will rely on AI to make product recommendations and will come to expect extremely relevant suggestions.
44. Brands and retailers will have a better understanding of shoppers\’ intent and emotions, using optimized language and offers to create emotional responses from their customers.
45. Customer service and support will become much more helpful and proactive, alerting consumers before they are aware of problems.
Advances in Store Layout and Design
46. Stores will change their layouts in the era of cashierless checkout, with impulse purchases at checkout moving to strategically placed locations throughout the store.
47. Store success will be measured in experiences per-square-foot, as retailers leverage specific metrics like dwell time, engagement and social sharing.
48. A growing number of stores will evolve into showrooms for evaluating and selecting prior to ordering.
49. Stores will double as fulfillment centers, as sections are blocked off to shoppers and designated for filling online orders.
50. Experiential retail will continue to expand and evolve, but won\’t be a replacement for products that meet customer demands for when and where they want them.
51. Retailers will no longer use cookie-cutter designs for their stores, but rather will customize each location for its specific market.
52. Shopper convenience will be key in new store layouts.

Improving Operational Efficiency

53. Shortened supply chains will mean faster access to cutting-edge products and design.
54. Robotics will handle repetitive human tasks like auditing store shelves, freeing up labor for more customer-facing tasks.
55. Self-driving cars and other autonomous vehicles will speed up customer deliveries.
56. Advances in scheduling and employee training tools will result in better customer service in stores.
57. Retailers will find ways to limit waste throughout the supply chain as consumers grow more concerned about sustainability.
58. Brands and retailers will look for sustainable packaging options to reduce their carbon footprint as ecommerce and delivery grows.
59. The supply chain will become increasingly transparent as consumers demand more information on where their products come from and how they\’re produced.
60. Shuttered stores will be repurposed as warehouses and fulfill other parts of the supply chain as retailers push inventory closer to consumers.

Innovation Strategies for Brands and Retailers

61. Brands and retailers will strike unlikely partnerships with competitors to capture new consumers.
62. Successful direct-to-consumer startups will be highly sought-after as partners and acquisition targets for established retailers.
63. In-house startup accelerators/incubators will become a form of R&D for large brands.
64. Opportunities to innovate will spread to every role within retail organizations, empowering employees and creating more useful offerings based on insights from the field.

Building Brands for Today\’s Consumers

65. New brands will go to market faster than ever before.
66. Brands will build out their direct relationships with shoppers and rely less on wholesale partners — at the same time, brands will value their best wholesale partners more than ever as the fastest way to scale.
67. Retailers will invest more in the development and marketing of their own private brands which will claim a larger share of shelf space and sales.
68. Brands will seek lucrative niche markets and deliver products tailored to them rather than the masses.
69. Brands will invest more and more to understand and meet the needs of Gen Z as they start to graduate from college.
70. At the same time, increasing life expectancies mean brands will need to pay attention to older generations who will be healthier and have new spending patterns.
71. Customers will play a bigger role in product design.
72. The number of new brands will increase at an even faster pace
73. Brands will create new products and experiences for a generation of health- and wellness-conscious consumers.
74. A growing number of brands will take a stance on social issues that are important to consumers.
75. Brands sold through retail will be evaluated for their potential to engage shoppers through experiences.

By bringing together the industry\’s largest community of innovators and shaping an intellectually honest dialogue, Shoptalk plays a critical role in helping the broad ecosystem with its comprehensive agenda to Create the Future of Retail. We hope you\’ll join us in Las Vegas in just over 10 days!

Marriage as a social institution is on the rocks. For the first time in history, there are more single adults than married Americans: some 124.6 million single adults. By comparison, in 1960 over 70 percent of Americans were married.

Young couples today are just not buying into marriage like they used to. Despite the fact that the millennial generation is the largest in history (73 million strong in 2019 and aged 23-to-38) and reaching the age when people historically have settled down into married life, the rate of marriage is declining rather than rising. It stands at 6.9 marriages per 1,000 people in 2016 down from 8.2 in 2000. While much of the blame is laid to millennials delaying marriage until later in life, now 29.5 years for men and 27.4 years for women, still the sheer size of the millennial generation should be bolstering the estimated $100 billion wedding economy, despite the lag in age of marriage.

Among the reasons why millennials are not adopting the married model is that one, the rising cost of having one has put a wedding beyond many people\’s budget (estimated to cost between $27,000 to $44,000 according to the latest Brides 2018 American Wedding Study); and two, marriage traditions are going by the wayside. Millennial couples are saying \”I don\’t\” to so many of the age-old traditions that their older siblings, parents and grandparents thought important.

Registry by Another Name

Take the tradition of bridal gift registries, where brides most often went to the local department stores with their mothers to register for china, crystal, silverware and other things needed to set up the couple in a home of their own. But millennial couples say, \”Who needs all that stuff?\” with 84 percent of them already living together and presumably being able to eat off something other than paper plates.

Zola, that started life as an online wedding registry in 2013, is bringing those old analog wedding traditions into the digital age. At the start is was the first online registry that allowed couples to register not just for gifts, but for experiences and cash gifts as well. And rather than have to maintain multiple registries from different stores, like bedding and cookware from Bed Bath and Beyond and tabletop from Macy\’s, Zola also allowed couples to select gifts from a wide range of stores or even a AirBnb or Hotels.com experience all in one place.

Convenience for the bridal couple was its initial appeal, as it also allowed couples to choose where and when their gifts were shipped or even if they were sent at all. With flexibility top of mind, once the bridal couple sees the final takings, they can cash it all in and put the credit towards one bang-up honeymoon or anything else on the Zola registry they decide they want.

It\’s a way for couples to \”game the system,\” registering for stuff they may not ever intend to accept but that gift givers might be more comfortable buying, like dinnerware, instead of what the couple really wants, a trip to the Maldives. Not only is this something a traditional gift registry can\’t do, but it takes the heavy lifting out of receiving and opening packages, only to have to box them up again and slog them back to the store. And the opportunity Zola gives couples to put all the chips into something else is even better.

Thinking the gift registry through in this way all from the couple\’s perspective is what made Zola\’s gift registry so successful. Now it is turning that same unconventional thinking to another pain point for couples: the wedding planning process.

From Gift Registry to Wedding Planning

Branded as \”The Home of All Things Wedding,\” and with a tagline of \”the wedding company that will do anything for love,\” Zola expanded from being gift registry to a complete wedding planning service in 2017. It became the place where couples could build their own wedding websites, compile guest lists to send custom invitations and save the date notices, track RSVPs and otherwise keep checklists to manage the numerous details up to the happy day.

\”Our vision is to take the stress out of wedding planning by making the entire process easy for Zola couples and their guests,\” said CEO Shan-Lyn Ma. \”Now couples really can plan their entire wedding day in one place, all on Zola.\”

Crate and Barrel Is the Most Requested Bridal Brand

With over 60,000 gifts and honeymoon experiences readily available on the Zola gift registry site from over 500 brands, from the practical like Cuisinart and Le Creuset to the latest sound systems from Sonos and Airbnb honeymoon experiences, Zola has long offered an \”add to Zola button\” for couples to select gifts from anywhere on the internet.

After years of finding Crate and Barrel the top brand externally added to Zola registries, it recently inked a collaboration to offer over 3,5000 of its exclusively-designed products on Zola. This makes Crate and Barrel Zola\’s largest retail partner and helps it expand its reach into the bridal market.

\”Our couples are dedicated to us because we deliver what they want. They told us they wanted to register for Crate and Barrel dinnerware alongside their KitchenAid stand mixer and honeymoon fund all on Zola. Now they can,\” Ma said.

Crate and Barrel will continue to offer its in-house registry service, but through Zola, it gets another avenue to reach new customers and build lifelong loyalty to the brand.

Crossing Over from Digital to the Real World in NYC

The next step in Zola\’s evolution to do anything for love has come to life in the Flatiron District of New York City in a pop-up shop open through April, which is when the company\’s data shows wedding planning ends and wedding season begins.

\”We translated everything our couples already love about us, including our easy-to-use planning tools, our curated gift selection, and our outstanding customer service, into a wedding planning destination unlike anything couples have ever seen,\” Ma said.

The idea is to give couples hands-on help planning the most important day of their lives. In the store they can meet an advisor for one-on-one planning and help customizing their websites, invitations and the many behind-the-scenes support tools offered. They can also see and touch over 2,000 of the top-selling gifts from Zola\’s registry.

A unique offering at the Zola shop is the ability for couples to design their own cake topper with replicas of themselves that are printed in 3D by Doob. Plus, every Zola in-store sales associate is ordained, so the actual wedding can take place right in the store, designed to look like a modern home.

Evolving Wedding Traditions to the Digital Age

With an MBA from Stanford and previous experience at Yahoo and Gilt, co-founder Shan-Lyn Ma has been on the forefront of the digital revolution. With Zola she is applying her digital expertise to an old-fashioned industry ripe for disruption.

The initial appeal of the wedding market to Ma was her recognition that weddings are \”inherently viral,\” and that wedding couples will connect with people like them on Zola, who will then turn to it for their own wedding plans. She affirms that personal recommendations have been the biggest driver of growth for the company.

The core idea of Zola was to help couples use their registry not just as a wish list of gift ideas, but a way to navigate the entire wedding process. With a total of $140 million in VC funding, Zola is poised to disrupt the traditional wedding market with tools that will make planning their increasingly complicated wedding easier. While many companies including The Knot or Wedding Wire provide content, local vendor lists, and free websites and others such as Wedding Happy and Wedding Countdown offer checklists and organizational tools, only Zola has tied all the disparate pieces of the wedding planning process together into a single one-stop solution.

Netflix has made the personal journey into storytelling more addictive than ever. Binge watching is a real thing, serving as the perfect antidote to our stressed out, trigger-ready anxiety, fueled by today\’s global surface noise. Netflix has become a proxy for the collective longing for escapism, and by doing so, it will shape how current and future generations consume and create culture. Lifestyle and fashion brands are already feeling this effect as they try to find ways to engage a consumer that is time poor and experience hungry. And by experience, they are looking for a validation of the way they see the world as well as the promise of discovery and adventure. In a sea of sameness, consumers want brands that stand for something. The new form of innovation sits at the intersection of purpose and strategy. The powerful brands find unique ways of telling their story and establishing a relationship of engagement around it.

Content is Everything

We are living in a golden age of content culture and easy access to digital, interactive storytelling. And we can thank venture capitalism, creative entrepreneurship and Netflix\’s sexy-smart algorithms for this phenomenon. Of course, we also have a talented creative class that has come beautifully unhinged with the collapse of the old entertainment complex. The fashion and retail industries, especially those big-box retailers caught up in retail\’s massive evolution, should take note.

The biggest impact of the Netflix culture-download model is the consumer. This golden age of content is making us more culturally savvy and open to deeper, more engaging forms of storytelling and dialogue. This is cool. It democratizes content without national borders. Longform storytelling is also meaningful in response to the swift, spontaneous and mostly ephemeral nature of social media and its preference for formats such as memes. The Netflix effect reflects our need for finding something unknown, providing deep layers of discovery in its offerings.

And this is the Netflix lesson for retailers: Create layers of discovery experiences for your guests, favoring more immersive lifestyle environments versus traditional, item-driven merchandising strategies.

Next-Gen Discovery

Mainstreaming culture-on-demand, à la Netflix, Hulu and others, will require fueling the next base of creative talent, including our future rock star designers, editors and hyphenated-lifestyle entrepreneurs. These young kids who are now binging on indie comedies and cult-level Scandinavian thrillers are having their aesthetic and storytelling chops greatly amplified by Netflix\’s rich archives. Modern, character-driven entertainment is showing us is the importance and influence of unique personality. Retailers should take copious notes. Our retail industry must offer this generation a home to express themselves as well as reinvent our offerings and experiences. Success will come by providing co-curated, co-storytelling experiences.

Six Netflix Lessons for Retail

Here are some lessons Netflix can teach retailers how to become culture disruptors that break through.

1. Think Like an Entertainment Company. Dial up your understanding of the current cultural conversation and identify stories and experiences where your brand can make an authentic cultural statement. Go beyond your comfort zone to identify new collaborators, writers, producers and directors whose sensitivities and stories marry well with your vision and vibe.
2. Blend Purpose with Creativity. Take chances in terms of your creative statements. Deliver storytelling based on the powerful edges of your brand. Think of elements that will spark conversation and will set you aside from the rest. In today\’s marketplace, an awful day is to be stuck in the middle; find your voice and amplify the uniqueness of your story. Tap into your purpose and vision for creative confidence. Patagonia did by taking on the President of the United States and his administration\’s position on environmental policies. Apply your own vision of creativity to the entire consumer journey, enriching the discovery experience with interesting background facts about the craftsmanship of the products you offer. Make the selling floor more intuitive, evocative and welcoming. Tap into the emotions of your customers.
3. Focus on Conversations. The return to scripted drama reflects the importance of dialogue and deep relationships. On this front, Netflix is innovating by leveraging technology and consumer engagement to make some stories fully interactive by choosing different narratives and endings. Invite your customers to become part of the adventure of your brand. Explore how to nurture a conversation with customers on all fronts, and engage with influencers and collaborators to enhance your product, experience and how you build relationships with your most important customers.
4. Give Marketing Campaigns More Depth. Consumers\’ appreciation for creative depth and cadence opens the door for more impactful marketing campaigns. Explore creative ways of taking your story and messaging to different media. Find ways of dialing up interactivity, including ways to make the consumer more involved. Think, for instance, how Nike encourages its sneakerhead followers to create campaigns and promotions through specific challenges and tasks that express their belonging to a specific tribe. Finally, consider the great, creative grit content you have based on behind-the-scenes stories. What are the backstories about brands, designers and craftsmanship? Tap into the popularity of documentaries to develop brand ethos messaging that feeds a creatively hungry generation.
5. Deliver Personalization. Netflix has perfected the art of mass curation. Think of ways in which you can deliver personalization at scale. Explore more targeted content, niche product offerings, and whenever possible, a more high-touch, emotive customer service and sales approach. Bring this to life in store by customizing environments; deploy the art of the high touch through personalized services including personal shoppers, monogramming, and more. And turn this human interaction into a research source for more insights and data to further enrich the human experience you customers long for.
6. Foster a People Culture. Netflix broke new ground with its \”Freedom & Responsibility\” HR manifesto giving more power to its employees. Find ways of encouraging your organization to take more creative risks, to be more entrepreneurial and to be better, stronger and authentically cool brand ambassadors. For all its reputation around creativity, the fashion industry can do a better job at creating a people-centric approach that allows creativity to thrive. That will be the foundation for creating a true, magical retail experience.

There is something primordially evocative about stories. It starts when we are children when we lived in the world of make-believe and fantasy realities. Stories unlocked our imagination, curiosity and a world of possibilities. As adults, we\’ve lost that magic over the years and crave it. The desire for experiences is an open invitation for fashion and retail to step in and create magical experiences and connection. So, go ahead and shed your need for creative security aside. Start taking chances and exploring ways to make your brand a story to remember.

NPD\’s \”Future of\” report series explores how brands are innovating to make way for a smoother customer experience. The advancement of IoT into the kitchen, the creation of device-agnostic content in gaming, and the retooling of apparel offerings to match shifting consumer lifestyles exemplify how today\’s industry leaders are offering consumers a more seamless experience.

The Connected Kitchen

In the growing category of IoT, our data shows that, while three percent of U.S. consumers currently own a smart appliance, 26 percent are interested in owning one in the future. The infographic below illustrates how smart appliances could transform every step of the decision-making process in our approach to food and eating, from smart appliances recommending recipes based on our culinary preferences to new online shopping opportunities, to smart ranges and dishwashers.

To move this category more squarely in the direction of consumer engagement, some manufacturers of IoT appliances, kitchen and otherwise, will have to readjust their thinking. Simply creating an app to make their device \”smart\” and getting them to talk with other devices is missing the point: manufacturers need to think of how their products will make the lives of their customers easier. To this end, integrating consistently with open platforms such as voice-activated speakers-which 20 percent of U.S. internet-connected households own-will be crucial.

Content Alliances

Companies in the gaming, tech, and toy industries are benefiting from forming content alliances-not only between competitors, but across platforms. The rise of cross-play gaming-that is, the ability to play online with gamers regardless of platform – is demonstrating that mobile, console, and PC can cooperate, because the content can now move seamlessly between these modes. This means that gamers who play on their mobile phones can now switch to consoles or PCs with minimal disruption to their gameplay; and those who own a PC but not an Xbox, for example, can play with their Xbox-owning friends-a huge win for consumers.

Brands are co-existing rather than competing in the tech and toy sectors, as well. Tech will probably experience a bump in PC sales as a result of cross-play gaming; and other consumer electronics sales are also on the rise-in 2018, headset sales have increased 83 percent. Toys are also moving toward gaming content, with many licensed figures and accessories tied directly to games such as Pokémon and Roblox. More consumer experience-oriented alliances can be seen between toy and apparel brands, as they bundle product sets around particular game content and movie characters-we\’ve seen that kids not only love licensed products, they love to wear them too.

Shifting Apparel Demands

The apparel industry is also shifting along with consumer tastes and trends. Consumers are choosing to spend more on experiences over things. They have also adopted a casual workplace-and-lifestyle approach. The industry is responding with products featuring moisture control, stain resistance, wrinkle-free fabrics, and odor resistance. And sales of apparel with these attributes grew by double digits in the first quarter of 2018 over the same period last year.

These are just a few of the approaches that are driving success for brands today. By delivering more seamless consumer experiences – with new products, new partners, and new technologies- they show how brands cannot just survive, but thrive in this shifting and uncertain retail environment.

For more information, see the full paper: 3 Ways to Foster a Seamless Consumer Experience in the Future.