The analogue world is behind us. Only advanced technology can solve retail challenges and turn the tide on stagnating productivity.
Futurist and trends expert, Kate Ancketill, encouraged optimism for a ‘tech-enabled’ future, discussing what impact this will have on physical retail, e-commerce and sustainability, as well as consumer shopping behaviours.
Ancketill suggested that while many retailers have focussed on environmental and sustainability issues, they have missed the ‘demographic time bomb’, which is impacting shifts in demand. For example, last year more diapers were sold in Japan for the elderly than for babies.
In the next 80 years, almost every country in the developed world’s population will shrink. That’s because women worldwide are having fewer children. In 1950, the average number of children a woman had was 4.7. By 2017, it was 2.4. By 2100, the study authors predict, it will fall below 1.7.
The world’s dominant powers will shift. Based on data from the Global Burden of Disease Study 2017 it is predicted 23 countries including Japan and Italy to halve their population by 2100. China will come close, the report predicts and be overtaken by India as the country with the highest population.
The cost of living will continue to erode consumer confidence. Currently, 67% of US citizens feel poorer today than they in in 2022. As a result, by proxy, consumers are going ‘green’ – saving through recycling, repairing and moving to pre-owned, pre-loved, circular consumption.
We are beginning to see the end of ‘linear consumption’ and the growth of ‘circular’. By 2030 secondary fashion will outpace fast fashion. According to Bloomberg, the second-hand fashion market was worth a staggering US$100 billion in 2018.
Xianyu – Alibaba’s second-hand goods exchange platform has emerged to leverage this trend. Building on its expertise in online sales and social media, Alibaba has managed to transform Chinese preconceptions about buying second-hand and provide a solution for people on a tight budget.
Xianyu, the platform developed by the tech giant within the framework Flutter, makes it possible to sell and/or buy articles that were previously acquired on Taobao, Alibaba’s e-commerce platform.
By 2030, 80% of businesses will be using AI in some way. Today, it’s about 40%.
Top 3 trends
The climate emergency and the cost of living crisis are forcing consumers to recycle and repair. Everything from shoes, clothing, consumer electronics and furniture.
In November 2023, the EU adopted its position on a stronger “right to repair” for consumers. The proposal aims to encourage more sustainable consumption, by making it easier to repair defective goods, reducing waste and supporting the repair sector.
Choose repair instead of buying, even after the warranties and guarantees expire. Within the legal guarantee period, sellers would be required to prioritise repair if it is cheaper or equal in cost to replace a good unless the repair is not feasible or inconvenient for the consumer.
Consumers will have a right to request repair for products such as washing machines, vacuum cleaners, smartphones and bicycles after the guarantee has expired.
Consumers are often discouraged from having a product repaired due to high costs, the difficulty of accessing repair services or design features preventing repair. Under Parliament’s position, independent repairers, re-furbishers and end-users would have access to all spare parts, repair information, and tools at a reasonable cost.
Online platforms will help consumers find local repairers (including repair cafés) and sellers of refurbished goods in their area.
Over 88% of people who saw ‘Blue Planet 2’, said it changed their consumption ethics. The perception of ‘new’ is different. It just needs to be new to me, not newly manufactured.
New retailers are emerging to take advantage of this emerging trend, such as Houdini.
Retailer Houdini has opened stores where any garment you see can be bought new, rented or subscribed to. Rent, reuse, repair, buy, try or subscribe is offered to consumers as a choice.
At Precycle, an airy grocery store in Brooklyn’s Bushwick neighbourhood, shoppers can find spices and fruit, grains and pasta, fresh olives and tofu, toothbrushes and floss, and many other household basics. What they won’t find – plastic. Precycle is one in an expanding cohort of grocery stores that use little if any, plastic packaging.
TOMO is the world’s first circular department store. Founder and CEO Marjan Haselhoff wants to provide a sustainable alternative to the current fashion industry through TOMO. The – online and physical – circular department store is fully transparent about the origin of its products and how they have been manufactured.
The idea was proffered that we are moving into a world where unscripted, synthetic and natural AI voices will become the norm.
Driven by the mass adoption of voice assistants, modern life is complex and busy, so ‘voice’ is becoming the future. Imagine ordering your groceries through your home AI Assistant.
Ancketill spoke of ‘empathetic’ AI and provided examples. It was estimated in 2022, 42% of US citizens who sought psychological help were diagnosed with a mental health problem. Ancketill envisions a demand for AI counselling.
“In the past, you might meet with a counsellor, a guidance officer, or an HR officer – tomorrow, you will talk with AI.”
Loneliness and anxiety will encourage the growth of individual ‘AI Personal Assistants’.
“Everyone will have their own personalised AI. Many would recall the movie, ‘She’. Your chief of staff.
Ancketill referenced the firm Inflection AI, which has created its first AI called ‘Pi’, for personal intelligence, a supportive and empathetic conversational AI.
Inflection AI, an AI startup aiming to create “personal AI for everyone,” raised a US$1.3 billion in funding led by Microsoft, Reid Hoffman, Bill Gates, Eric Schmidt and new investor Nvidia.
“There’s still plenty of cash to go around in the generative AI space.”
As our lives become more dominated by technology and AI, there will be a counter-movement.
Ancketill indicated that 78% of the US population believes “they no longer agree what is real and unreal, truth and lies. The world is already seeing the emergence of deep fakes. Consumers are concerned about the loss of privacy.
“Through aging communities, growing isolation and solo households, we will seek authenticity and connections. There will be a need for authentic retail experiences.”
Ancketill referred to luxury hardware retailer, RH, formerly Restoration Hardware, beginning its European expansion in a venerable stately home, opening a multi-level hardware store in the Cotswolds.
The brand has long gravitated toward historic venues—consider its takeover of the historic Natural History Museum in Boston or its former Bethlehem Steel Building store in San Francisco as just a pair of examples—and RH England is no different. This time around the company is pulling out all the stops, firmly planting itself within a 17th-century, 73-acre estate in the Cotswolds.
Ancketill spoke of this retail brand, and others, suggesting there is still demand for physical retail, despite the growth in online, e-commerce, socials and digital.
Ancketill suggested retailers watch closely legislators and policymakers, as they begin to tackle the challenges of AI. She predicts a move from mass consumption to consumer guardianship. New business models, driven by empathetic AI will emerge, and in a ‘post-truth era’, ‘real’ matters – if you can’t trust online, you can in the real world.
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