Tech. 2019: Technology Is Driving Consumer Centrism and Smart Consumption in Retail
On October 2–3, 2019, Coresight Research’s London team attended Tech. 2019 at Printworks, London. The event focused on the technology and trends that are shaping the future of retail:
- Technology empowers customer-centric retail models, enabling companies to deliver consistent levels of customer service across multiple touchpoints.
- Partnerships between companies to strengthen data analytics or last-mile delivery are seen as a winning model in retail compared to the alternative of vertical integration, according to retailers such as JD.com.
- While smartphones are currently central in the consumer experience, the rise of wearables could threaten the role of cell phones in retail in the near future, by delivering greater personalization and a better user experience.
- The adoption of 5G technology is needed to unleash the full potential of artificial intelligence (AI) in retail. The next-generation mobile connectivity can deliver the low latency needed for more advanced AI applications.
- AI enables smart consumption through greater personalization that minimizes the risk of failing to offer shoppers what they want, which in turn reduces unsold inventory that needs to be disposed of and the likelihood of returns, making the industry more sustainable.
Tech. 2019 was organized by trade publisher and information provider Retail Week and focused on digital commerce and the technology driving it. Below, we summarize the key insights from the talks we attended.
Tech-Enabled Customer Centrism
Chenkai Ling, Vice President of JD.com and General Manager of JD Retail Solutions, said that technology is enabling boundaryless retail—with the shopper dictating when, where and what to buy—by providing customers with multiple touchpoints with the retailer. Similarly, Parag Parekh, Vice President of Global Sales at Adidas, added in a later talk that the customer defines the shopping journey and that Adidas has been working across multiple touchpoints—including e-commerce, its own stores, franchises and wholesalers—to ensure a consistent level of experience for customers, whether B2B or B2C. Parekh said that technology enables associates to spend time more productively on shopper engagement rather than on routine operational tasks.
Partnerships Are The Way Forward
Collaborations between retailers will be crucial in the future of retail, according to JD.com, with the industry moving from vertical integration to partnerships. For example, Japanese online retailer Rakuten is partnering with JD.com to leverage drone delivery.
Elsewhere at the Tech. event, Clodagh Moriarty, Chief Digital Officer at Sainsbury’s, said that collaborations with partners are making it easier for the supermarket chain to serve shoppers whenever, wherever and however they want. For example, Sainsbury’s partnered with Argos (which the company owns) to make last-mile delivery easier for the former catalog operator by offering collection points for online purchases in Sainsbury’s stores.
The Smartphone Could Soon Belong to the Past
Roland Palmer, Head of Europe at Alipay, and David Coombs, Head of Strategic Services at Cheil UK, went head to head at Tech. to debate the role of the smartphone in the future of retail.
- Palmer argued that the cell phone is here to stay, as shoppers can do virtually anything through their phones but are still unclear about the potential applications of wearables.
- On the other hand, Coombs believes that wearables will soon replace cell phones in retail. He pointed to ongoing work by companies such as Amazon in building a connected world that leverages voice commands and does not rely on one single device.
- Coombs added that wearables are far more effective for personalization and user experience than smartphones.
- Before and after the talk, attendees were asked to give their opinions of the fate of smartphones in retail, by voting on whether they agreed with the statement, “The mobile phone is dead” (as a tool used by shoppers). Results showed that the debate was able to shift the view of the audience, as only 10% of respondents believed that the days of the smartphone are numbered before the talk versus some 30% after.
5G Will Unleash Advanced AI Potential
Discussing emerging technologies, Joe Jensen and Caroline Chan, VPs and General Managers at Intel, argued that while AI is changing retail by delivering targeted, relevant experiences to shoppers, 5G will be needed to unleash the full spectrum of AI-powered retail digitalization potential. More advanced AI applications require the low latency (the amount of time between the command and the related action) that the next generation of mobile connectivity can deliver.
Retailers’ promotion strategies are currently disconnected to their inventory, creating situations in which the retailer is promoting items that are not in stock. A 5G-powered advanced application of AI will connect inventory and promotions and will be able to deliver targeted messages to individual shoppers, effectively promoting what is in stock and what matches the customers’ preferences and sizes.
AI Enables Smart Consumption
AI enables smart consumption—more targeted and efficient consumption patterns—by delivering exactly what the consumer is looking for, according to JD.com’s Ling. For example, diapers brand Huggies launched a composite material version of its product based on JD.com’s comprehensive analysis of orders and consumer reviews.
Elsewhere at Tech., Josh Builder, CTO and Head of Product at Rent the Runway, explained how the garment rental provider leverages customer data through AI to come up with personalized recommendations that, by limiting the number of returns of unwanted items, should minimize the impact of deliveries and returns on the environment. Rent the Runway, which pioneered the sharing economy by introducing the garment rental subscription model, is contributing to changing consumer attitudes toward second-hand clothing, enabling a more sustainable pattern of fashion consumption.