Top Retail Tech Trends To Look For at #NRF17
AI is one of the biggest and most exciting areas of innovation in retail. Machine intelligence is transforming the entire shopping experience -- moving us away from cookie cutter shopping on websites and apps, to a much more personalized and scalable one-to-one relationship between retailers and each of their customers.
Soon it won’t be unheard of for your favorite stores to know that you prefer dark blue over red, or that you pride yourself on being a bargain shopper. Machine intelligence is increasingly being used to generate individualized recommendations, decipher natural language responses, and provide more intelligent customer service via the ever-pervasive chatbot.
Nowhere is AI-powered Retail more visible than at NRF, the National Retail Federation’s annual “Big Show.” This week the CognitiveScale team is once again traveling to NRF; here are four key technology trends we’ll be watching closely.
1. Hyper-Personalization & Product Discovery Experience
Retailers have been wanting to know their customers better so they can provide them with richer, more tailored shopping advice. Meanwhile, shoppers are tired of using “search engine speak” or slogging through complex menu-based product browses. At CognitiveScale, our product ENGAGE integrates technologies like AI, mixed reality, computer vision, and Blockchain to offer a rich, individualized shopping experience for everyone digitally and inside the store - without compromising data privacy. We’ve cracked the holy grail of retailing – a super rich profile created for each consumer even when they choose to stay anonymous – without filling out some sort of a style quiz.
Through machine intelligence, the retailer gets a self-learning rich cognitive profile of each shopper. Shoppers can search in natural language and receive meaningful advice curated from their digital exhaust, past purchases and social interactions. No more guessing with inaccurate customer segments required -- just a rich experience tailored for each customer based on their behaviors and preferences. We see matching algorithms providing buying suggestions to the consumer, based on real-time analysis of purchase history, age group, demography, ethnicity, season, and many more such variables. And as JWT Intelligence wrote: “Blockchain’s transaction ledger is perhaps the most secure tool available today to verify authenticity, a major concern in the luxury goods sector.”
In one of our largest rollouts for a major U.S. retailer, we tested some of these technologies together and found that they increased anonymous shopper engagement by over 230%, lifted conversion by 13%, and increased average order value per session by 15%. At a time when retail conversion and basket sizes are falling, these numbers showed us all how AI will disrupt commerce forever.
2. Shopping with AR & VR
Several technologies are converging to make the in-store shopping experience more personalized and convenient. Consumers expect to get what they want more quickly and easily than ever, especially when it comes to checkout; hence the launch of Amazon Go, a new checkout-free grocery store, or the self-checkouts at Rebecca Minkoff.
But it would be hard to overstate the potential of virtual and augmented reality, or their combination “mixed reality,” in the retail environment. Intel’s Project Alloy, also showcased at CES, merges AR and VR in a headset with full wireless positioning and multi-room tracking, to create what the company has dubbed “merged reality.” The technology is being promoted for gaming and entertainment, but imagine what this could do in shopping malls and department stores.
The store of the future will include AI-powered mixed reality experiences in the windows, on the racks, in the fitting rooms, and at checkout. At CognitiveScale, we’ve piloted some disruptive in-store shopping experiences using Microsoft’s HoloLens powered by an anonymous shopper’s cognitive profile. Think racks nudging at you digitally to come see their collection based on what the brand knows about you.
Goldman Sachs theorizes retail will be one of the first industries to be disrupted by VR and AR combined, creating a $1.6 billion market based around 32 million users. Accelerated by the mass-market success of Pokémon Go, mixed reality is being applied to everything from storytelling to fashion shows, not to mention practical applications like make-up try-ons, in the case of beauty brand Charlotte Tilbury.
3. Alexa goes Shopping_ AI and IoT Converge in Omni-channel
Mary Meeker of KPCB predicts that by 2020, half of all web searches will use voice or image search rather than text_ “More efficient and often more convenient than typing, voice-based interfaces are ramping quickly and creating a new paradigm for human-computer interaction,” she said. This creates a frictionless experience for shoppers -- a process that requires fewer steps by the shopper rather than multiple clicks.
Because chatbots can both transfer brand values and offer frictionless new customer experiences -- whether through voice, gesture, or other future interfaces -- we anticipate a convergence of AI with the ubiquitous computing power of the Internet of Things.
Amazon’s Alexa was the belle of the ball at the recent Consumer Electronics Show in Las Vegas, with a wide range of consumer product companies showcasing smart home products integrated with Alexa. Competitors Google Home, Apple Siri, and Microsoft Cortana displayed similar momentum; even chipmaker Nvidia made headlines by announcing a far-reaching vision for smart homes and cars powered by AI-based assistants. In the future, we will use smart AI assistants integrated seamlessly within our living spaces and our products to keep our house stocked to our tastes.
4. Exciting Times
It’s been mere years since e-commerce brands like Amazon and Etsy delighted shoppers with their fast, intuitive, and relatively uncluttered mobile apps. Convenience brands like Walgreens jumped into the game too, wowing customers through simple but delightful experiences like refilling your prescription through a barcode scan. The challenge for the vast majority of retailers is to find ways to offer these high-touch experiences to customers, whether they are a convenience brand or a luxury brand.
When it comes to proving out new technologies like machine learning, cognitive commerce, and mixed reality, we believe in focusing on “micro-interactions” -- that singular luxury fitting room experience that made you feel like a million bucks, or that amazing antique find that you got from a mixed reality display in your kitchen. Retailers should pick measurable goals and then focus on the set of hyper-personalized experiences you would like to bring to life for your customers. There’s no time like the present; it’s an exciting time to be in retail and we’re looking forward to what this year’s NRF holds in store for the industry.