The Future of Retail: End of Brick-And-Mortar Stores?

Retail, Experience economy, Brick-and-mortar stores

Exponential technology (AI, VR, BlockChain, 3D print and the Internet of Things) radically changes the face of retail sales. E-commerce giants (Amazon, Walmart, Alibaba) digitize the entire retail sector and take on a wave of technological opportunities. Many stores with classic branches have already gone bankrupt or moved their activities online.

A number of major US shopping malls are empty. It’s called “Amazon effect”.

We stand at the threshold of a “business” revolution. Those who survive must go through the evolution of product-oriented mentality to a business model based on ‘user experience’ using artificial intelligence, virtual and expanded reality, and 3D printing. Let’s take a look a little closer.

  • Last year, 3.8 billion people were connected to the Internet. By 2024, this figure will increase to 8 billion. It will allow 5G networks, stratospheric and space satellites. At the same time, the network will accelerate considerably.
  • This means that 4.2 billion digital customers will join the eshops. Those who choose to offer their products and services to these consumers, but the cost of sales and warehouse space and sales staff will grow.
  • Thanks to global interconnection, contract manufacturing, and real-world logistics, the way to build a billion-dollar business is a matter of a record-breaking time, wherever you live.
  • While online sales in the US grew from $ 23 billion in Q1-2009 to $ 115 billion in Q3 2017, e-commerce still accounts for only 10% of all retail sales in 2017.
  • In 2016 global online sales reached $ 1.8 trillion. The $ 1.8 trillion was responsible for only 20% of the world’s population.
  • And a little numbers from the Czech Republic: Total turnover for the sale of goods through e-commerce in 2017 exceeded CZK 115 billion, an increase of 18% compared to the previous year. Online sales thus reached a 10.5% share in all Czech retail. (press release APEK + Heureka.cz).

How artificial intelligence (AI) will change the face of retail

Eye of the eshop owner:

By automating the customer line, accurate modeling and supply chain management, generating personalized marketing content, and advertising, artificial intelligence gradually demotivates online trading.

Try to imagine the artificial intelligence that learns from each new communication with the customer to answer perfectly all the questions of the consumer and also provides feedback to product designers and business owners. Already, thanks to Facebook’s “Handover Protocol”, trained chatboots work with customer support staff in a single communication with the customer.

Let’s go one step further, and imagine empathetic artificial intelligence. AI understands the frustration of the user and can respond to insults as well. Virtual Assistant Ava, the Austrian company, Soul Machines, is supposed to provide such services. “Ava is a virtual customer support assistant who introduces a new level of personalization and brand interaction to normal customer communication,” says Greg Cross, CEO of Soul Machines.

Predictive modeling and machine learning optimize deliveries of goods and warehouse supplies. Skubana – an online analytics data sharing platform, provides e-shop owners with constant feedback on how each product is doing, helping to maintain the optimum level of inventory.

Other changes will bring a blockchain. Increased transparency of production and transport processes is expected to result in lower costs for both eshop and end customers.

Consumer’s eyes …

Personal sales assistants change the psychology of classic shopping. You may have personally met Alexa from Amazon … Although Alexa, with her voice search and smart home controls only in the early days, her users are spending more on Amazon than Amazon Prime members ($ 1,700 versus $ 1,400). Buying in virtual reality, accompanied by a personalized instructor equipped with artificial intelligence, will simplify and enhance the entire buying process.

What awaits us next corner

Imagine the future where your personal AI assistant knows your desires better than you yourself. Is it even possible? And why not? Artificial Intelligence will accompany us and follow literally at every step and watch closely our interactions with the environment. So how long and how we look and how we look at it.

From that, it’s just a step to a simple shopping assistant: “Buy a new outfit for a Saturday evening celebration.” It will probably be a moment of surprise and wonder about how good an outfit is delivered.

In the world of artificial intelligence shopping, there will be no need for advertising.
Why spend on expensive advertising spots when the decision process does not affect emotional arguments in most cases?

It has just begun dematerialization, demonetization and democratization of personalized trading.

To Bussiness Personally: Experience Economy in Practice

In 2017, over 6,700 businesses ended up doing business in the US, based on sales in so-called “stone shops”. There were more than in the previous record year 2008 during the financial crisis. Regardless, the store is still flourishing.

While the number of consumers growing using the convenience of online shopping grows, companies with stone shops open up the so-called “experience economy” or “experience economy” gates. When shopping personally, consumers look for a shopping experience rather than exploring product parameters. There is still room for emotions.

Here too, the Internet of Things, Artificial Intelligence, and Computing Performance Improve the Consumer Experience. Artificial Intelligence, along with data analytics, helps owners of ‘stone shops’ optimize their environment, staff, marketing strategies, stock logistics, and personalized customer communication.

In the short term, sales points will serve as another “user interface” for

  • 3D Print – Custom clothing printing for a particular person
  • virtual and expanded reality for testing goods, services, or different kinds of learning
  • shopping without attendance

In the long run, we will verify the extent to which our desire to grow consumption cope with the preference of a pleasant personal experience in real life. What is certain: a classic shopping experience is at the threshold of a major transformation.

Linking the real world and the virtual world

Let’s take a moment to trade in intangible goods – rights, licenses, experience tickets, or simulation of real goods in the virtual worlds of gaming platforms.

Imagine that we want to visit the concert of the famous DJ Sasha. We have captured the opportunity to receive a ticket in our advertising campaign if we visit Trafalgar Square among the first hundred people. The ticket is “hanging” in the virtual space, just like pokemon in the famous Pokemon Go game. An application in our mobile phone will pick up and download the ticket. The organizers need not physically assist.

The day before the concert we find out that we will not be able to attend. It does not matter – the ticket will easily be sent to a friend. Thanks to BlockChain, the ticket remains one. It can not be falsified.

A remitted ticket to his friend on his cell phone serves to enter the concert. And because his ticket is just a winner and his cellphone has a GPS, the ticket will change to VIP with the opportunity to visit the backstage when entering the concert hall.

But our story does not stop here. During the concert, a friend picks up the promo on Coca-Cola on a billboard. The mobile phone will take over the code and share it with five friends to activate a voucher for one real Coca-Cola picked up in the slot machine.

A visit to the backstage includes shooting with an artist. The photo will become part of his VIP tickets. After the concert, the ticket itself will be transferred to collector mode and he can sell it for a few years.

Future? In any case. Reality.

The DJ Sasha Concert took place on February 17, 2018!
The BlockV (blockvio) technology has been used to connect the physical and virtual worlds with the experience economy.

With the use of so-called virtual atoms, it is possible to create entirely new types of products, equipped with proprietary intelligence (AI), secured by BlockChain, fully convertible and available through VR and AR technologies.

And what’s next?

The exponential technology convergence has already changed our way of buying, using time and paying.
Twenty years ago, Amazon showed us that the site can provide infinite amounts of material for everyone to read. Ever since, the world of e-commerce has exploded. And we are still at the very beginning of the next era: cost savings through the transport of goods through drones, the Internet of Things, tokenized ecosystems, full use of 3D printing and AR / VR, and the emerging influence of truly powerful artificial intelligence.

So stay tuned and prepare your cryptocurrency, powered by artificial intelligence.

Source: http://sramek.blog/2018/03/budoucnost-maloobchodu/

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