The shopper of the future: Preparing for and profiting from change
What if our consumer data informed our shopping experience — in a truly meaningful, personalized way? Robert Uhland and Marian Cook imagine a not-too-distant future where data brings shopping to life.
The year is 2027. I arrive in an autonomous Lyft on Michigan Avenue in Chicago, one of the most populated and premier shopping areas in America.
As I emerge from the vehicle, a digital hologram appears on my Augmented Reality glasses. Displayed in front of me is a real-time feed displaying social, retail, dining, and other experiences filtered by my location and preferences. I pick retail for my desired experience now and am immersed into the goods in all nearby stores, moving from one to the other with a simple click. Artificial intelligence continues to learn about me and my preferences, fine tuning its recommendations and offering exceptional and delightful choices.
I feel good about what I have put in my virtual shopping cart, and I want to see the products in person. Their locations pops into my hologram and guide me there. While our advanced technology could make my decisions for me, I still enjoy the tactile, social, and emotional experience of choosing what I buy.
My friends have arrived. They began their shopping in their autonomous vehicle, which knows where to have their purchases delivered.
We gather at a favorite store, renowned for its outstanding, interactive shopper experience, and GPS navigates each of us to our own selections. Smart mirrors allow us to try on clothes virtually before we physically try them on. Friends weigh in when we put the smart mirror pictures on social media. Relevant promotions and discounts begin to virtually appear around the store, and robot shopping assistants greet and assist us. Checkout is automatic and lines are eliminated. The online and offline shopping experience have merged.
We all leave satisfied from a long day of shopping and realize we’ve worked up an appetite. Our smart watches tell us that we are dehydrated, and our caloric intake is low. We are provided a variety of restaurants and are guided to our choice.
After a delicious dinner designed for my nutritional needs, we order a Lyft to my friend’s place. On his doorstep are the remaining purchases that he made in the Lyft earlier today.
It was a successful day of shopping and socializing, and just another day in the life of a consumer in the year 2027.
A macro lens: Consumer dynamics and paradigm shifts
Every aspect of shopping is changing. Payment methods, store layouts, shipping preferences, communication, and consumer behavior focus on convenience and experience. Technologies such as smart phones, social networking platforms, WiFi and e-commerce platforms are rapidly evolving to serve a customer base that is ever-changing.
Larger economic changes are afoot. Consumption models are changing. The sharing economy and the circular economy are both growing explosively. Across the globe people are sharing their assets such as cars (Turo), clothes (Tulerie), and WiFi (Fon). A heightened focus on being asset light also drives increased recycling and reuse, or the circular economy. These models change our relationship with buying and owning assets. In addition to being less expensive than buying new, buyers realize that raw consumerism is not sustainable for our planet.
The gig economy has its winners and losers. Defined by short term contract work, it is causing income instability, which drives living standards and consumption down in developed countries. In developing economies, a more global workforce with increasing income reflects rising living standards and consumption.
Rising income inequality means that sellers will increasingly abandon the shrinking middle class in developed countries, instead targeting either high- or low-end consumers. In developing countries, the middle class swells and becomes an attractive market.
Emerging technologies such as artificial intelligence, augmented and virtual reality, drones, 3D printing, and data analytics are powering customer-centricity, personalization, and service at higher levels. Retailers are creating meaningful and diverse ways to connect with consumers. This includes chatbots, interactive surveys, analytics, and brand curation through influencers and targeted advertisements.
The technologies available today collect data and influence new product creation and create a clear, curated line of connection and personalization with consumers. With consumers’ data as the driver, the product is no longer the software or the hardware that is purchased or used by the consumers, but rather it is the consumer themselves.
New business models based on productizing consumer data and driving customer stickiness or loyalty are rising. Expect investment in building customer knowledge, relationships, and service through emerging technology capabilities to increase exponentially.
Growth going forward
With this as a backdrop, what should retailers learn about, experiment with and invest in now? Here are four areas that will have a significant impact on enterprises moving forward:
1. Interactive social media
Today, stores market to consumers via Facebook, Twitter, and other social media outlets. Yet they have not fully captured the influence between consumers. As we advance, digitized and curated content will be increasingly augmented and amplified by recommendations from friends, influencers, and past behavior. They will promote physical, mental and social experiences that drive enhanced brand experiences and community.
Interactions with digital interfaces will continue to scale inside and outside of brick-and-mortar locations. For companies, consider incorporating the ability to integrate an interactive form of social media into growth strategies. This entails having a platform that rewards loyal consumers for increasing engagement and foot traffic, and providing enhanced, interactive experiences for brands through platforms like augmented and virtual reality.
2. Transportation-enabled commerce
Consumers now have an expectation of immediacy, and automated vehicles (AV) and drones make that happen. They give more visibility into delivery progress, and influence purchasing decisions. Expect robots and drones to meet you at your door. Hours spent driving to make purchases become opportunities to consume personalized content and make purchases while traveling. AV’s give businesses the opportunity to tap into an entirely new frontier: the passenger economy.
Retailers should keep an eye on this nascent opportunity, especially those with customers that have a long drive to get to the retail location. It should be considered in the context of interactivity across the buying experience.
3. Rise of the asset-light model
The transformation of inventory-centric models into ones built around sharing will increase. Consumers increasingly want to reduce their global footprint and not own assets.
This translates to opportunity for businesses and individuals to connect their products and services to consumers through platforms such as Uber and Airbnb. Over time, these platforms can accelerate innovation by bundling disparate offerings and connect the value chain in new ways with a unified voice to the consumer. Forward thinking companies need to keep track of this potential innovation ecosystem.
4. Sustainability and reuse on the rise
The same environmental and economic concerns fueling the sharing economy are driving the circular economy and sustainability-driven consumption forward. There are shopping malls now that only offer second-hand items, and grocery stores where consumers are expected to bring their own jars for bulk purchases.
Begin planning to enable consumers increasing push for supply chain transparency and traceability. Create recyclable and recycled offerings and packages. Millennial and Gen-Z consumers are increasing rejecting consumer culture. Retailers moving to respond to this shift will see strong growth.
The world is moving faster, and every retailer needs to experiment with emerging technologies and business models. To capture the hearts, minds, and dollars of shoppers of the future, retailers and brands need to be fluent in understanding how the landscape, consumer expectations and consumption patterns are changing.
Back in 2027 Chicago, a young woman wakes up to a bright light mimicking the sun. “It’s 73 degrees out,” Alexa tells her, and she responds by telling her to order a Lyft for 30 minutes from now.
After a shower, she asks Alexa what today’s outfit is, and smart sensors highlight it. These sensors alert her that the fabric is worn on multiple items in the drawer, and Alexa asks if she would like to purchase more. “Yes,” she replies and a link to the shopping cart is sent to her phone to confirm or deny.
Seamless transactions like this, led by data, focused on the customer, and fueled by technologies, are what our world will increasingly run on. Data is the metaphorical engine powering the global economy forward, and the technologies are the drivers behind the seismic shifts to come. Those that build their knowledge through pilots and iterative experimentation now will be best able to profit from change in the future.
Slalom Customer Insight is created by industry leaders and practitioners from Slalom, a modern consulting firm focused on strategy, technology, and business transformation.
