Three Possible Futures for Retail, According to Silicon Valley
At Valora, we strive to be at the forefront of the latest trends at the intersection of retail, commerce, and technology. By opening an innovation lab in Silicon Valley last year, we’re now able to monitor new technologies and lead new digital initiatives better than ever before. Our presence in Silicon Valley allows us to build relationships within the local ecosystem and anticipate what the future has in store for our industry and its consumers. Below are three possibilities for the future, scouted and analyzed by our Silicon Valley team.
Connected homes will become a major digital channel for retailers.
The smart home market is experiencing strong growth and preparing to transition its customer base from early adopters to the early majority. By 2020, it’s expected that more than 100 million U.S households will have at least one smart home device. These devices will provide retailers with many new opportunities to interact with customers and deliver new shopping experiences.
Silicon Valley companies are betting on this possible future and are currently developing the future of home shopping. In a not-so-distant future, your fridge will automatically order your favorite beer when you’re expecting guests, your Nespresso machine will reorder coffee when you’ve run out, and you’ll receive fresh light bulbs on your doorstep before an old one burns out. This future will become a huge opportunity for the retail industry, as connected home could represent a significant share of their business.
Many U.S. retailers are already taking steps to capitalize on the growing connected homes market. Walmart, the world’s largest retailer, recently announced a partnership with Google to offer hundreds of thousands of items — from laundry detergent to Legos — through voice shopping via Google Home.
Mobility will become virtually free.
Silicon Valley companies are working hard to develop autonomous car technologies. While full autonomy is still 5–8 years away from reality, it’s already possible to envision the massive impact autonomous cars will have on our cities.
The shift to fully autonomous cars will have three major effects on the marketplace. First, drivers won’t be needed, which will allow the automotive industry to become key mobility players by offering their own on-demand car fleets. Second, a pay-per-use model will become cheaper than owning a car. Hence, to travel within cities, we will rely exclusively on a shared infrastructure that will automatically adapt itself based on current demand. Third, maybe most importantly, the shift to self-driving cars will allow almost anyone to enter the mobility market. Automotive companies will sell their fleets to cities, airlines, rail companies, rental agencies, retailers, and of course, all the other tech giants that will likely become mobility providers, as well.
What will it mean for the market? High supply, low demand, and sinking prices. We can already see proof of that today in San Francisco, where the cost of traveling anywhere in the city went down by up to 85 percent! Mobility could become virtually free and new business models will emerge. We already envision businesses offering customers a free ride to bring them to their storefronts or, in another scenario, offering customers a free ride to or from work if the consumer is willing to shop the store’s online marketplace during their commute.
Virtual assistants will become gatekeepers.
Over the past few years, tech companies have spent significant resources developing virtual assistants. While still in their infancy, products like Alexa, Siri, and Google Assistant are slowly becoming more relevant and useful to their users.
Today, we can already accomplish many tasks like ordering a pizza, calling a rideshare, or controlling your home thermostat via virtual assistants. By design, some of these virtual assistants are already connected to user data including email inboxes, calendars and agendas, and recent locations. Because they have so much visibility into a user’s’ lifestyle, they’ll eventually become really good at knowing what kinds of products we need and when we need them.
In a possible future, virtual assistants will know and understand your purchase behaviors even better than retailers. This means that eventually, they’ll become better at offering personalized promotions in shopping incentives than the retailers themselves. Virtual assistants could become gatekeepers by filtering out all non-relevant messaging sent to consumers by retailers. After all, the virtual assistant knows you don’t really need a new pair of shoes because you just bought a new pair last week. Retailers will need to interact with these virtual agents and convince them they have something relevant for their users to see or hear.
On the other hand, these virtual agents could also become a retailer’s best friend. We can expect virtual assistants to always be monitoring the web to find relevant products and promotions for their users. When they find an item that meets the right criteria — a user’s favorite orange juice brand that just went on sale at a local store, for example — they’ll automatically add that item to cart.
While we still have ways to go before many of these technologies become integrated into everyday life, it’s exciting to see just how far we’ve come in such a short amount of time. By continuing to keep a pulse on the latest innovations in technology, we can better prepare ourselves for the future of life in the digital age and imagine the amazing possibilities ahead.
