By Brian Walker
CEO & Founder, Retail Doctor Group
Back in the 1860s, H.G. Wells proposed that every University should have a department of futurology, and a few actually do today. Craig Rispin, Global Business Futurist, states: “A futurist is quite literally a reverse-historian. Futurists peer over the horizon. They ask significant questions and try to create a preferable future, just as I’m trying to do now with your audience. Everything’s changing so fast, but I’m afraid your audience just doesn’t know how fast that change is actually coming.”
The Speed of Change
People talk about the speed of change, and in our sector of retail, in particular, CEOs and boards are really concerning themselves with change. How fast is that change? Is it possible to measure that rate of change?
Yes, it’s possible. Universities around the world measure this, and one of the trending measures right now is known as the measure of human knowledge.
A great futurist named Buckminster Fuller invented the geodesic dome (amongst other things) to measure human knowledge in his students.
Research indicated that the amount of human knowledge a century ago was doubling every 100 years or so. After WWII, it doubled every 25 years. Now, the rate of change in human knowledge is doubling every 12 months.
However, IBM says the main driver of the 4th Industrial Revolution is the Internet of Things (IoT). The IoT is scheduled to drive the change in human knowledge down to 12 hours!
Now, how does all this relate to understanding the future of retail? To know where we’re going, it’s best to see how we’re going to get there.
5G and the Internet of Things
Kevin Ashton is credited with coining the phrase ‘Internet of Things’. This was back in 1999, and Ashton envisioned a world where “The IoT integrates the interconnectedness of human culture — our ‘things’ — with the interconnectedness of our digital information system — ‘the internet.’ That’s the IoT.” It would take at least a decade for technology to catch up with Ashton’s vision.
The Internet of Things really refers to physical objects – products – with sensors and processing ability, or software that connects and exchanges data with other devices and systems. It is not normally expected to have an internet connection, yet can communicate with the network independently of human action.
That’s why computers, laptops, and smart phones aren’t generally considered to be IoT devices — no matter how many sensors they have, it is expected that they are capable of already connecting to the network or the internet. Now consider wearable devices: A smartwatch or fitness band was modified from its original state (of being a watch, for example) to connect its wearer to the internet. That’s what makes it an IoT product.
So, billions of products around the world now connect, collect, and share data. By adding a level of digital intelligence to otherwise-dumb devices we’re making the world smarter, more responsive, and more communicative.
Merging digital and physical universes is an idea that’s been around since at least the 1980s, but technology just has not been able to sustain the level of ‘connectedness’ all these IoT devices need. That technological limit extended to the internet itself.
Enter broadband internet, cellular technology, and wireless networking. And yet, even that was not enough to supply every device with its own IP address – a necessary evil to avoid bottlenecks and a future-focused step that would allow IoT to scale at will.
Nowadays there are more things connected to each other than there are people in the world to use them. Driving the use of those devices is cellular technology known as 5G.
5G is designed to virtually connect everything and everyone, including people’s devices, their machines, the products they use, and the retailers and shop-owners they buy those products from. A single tower put into a shopping mall could support up to a million devices! While the chances of a million people in one mall are quite slim, a million products with a million tags reporting their locations for a million buyers around the world is infinitely doable.
Other IoT products and devices include things like self-ordering washing machines, self-driving cars and trucks that deliver goods to customers, synthetic biological devices and futuristic medical implants like Neuralink, ultra high-bandwidth interfaces that can connect humans to computers.
Says Rispin, “One of the primary drivers of the digital side of the Fourth Industrial Revolution is data. Having your finger on the pulse of retail like Adobe does, with their point of sale, delivery, and ecommerce data. They’ve got a trillion interactions measured already. And this big data reveals that we’re way behind where we are expected to be on a development of IoT and connected retail level.”
So, what does the future of retail look like, then?
Emerging business, people, spaces, and technology trends
There is a massive shift happening right now. You can feel it. You can see it. Everyone’s talking about it, but nobody is talking about the context of it. To understand the context of the future of retail you need to frame it first.
We’re moving into the Fourth Industrial Revolution (4IR) and it’s driven by digital, physical, and biological data. Businesses, people, and technology trends are what’s driving the change we’re seeing in our world (today and into the near future).
Trends driving change
When we talk about biological factors, we’re talking about people, customers who are also going through big changes. Digital, the technology that we can use to intersect with the biological, the customers, and the physical world has to have a framework to plan for the future. If you’re planning for the future of retail and you don’t have a framework, you are not planning for your future in retail. It’s as simple as that.
Organisational charts came into being back in the early 1800s. They have served their purpose. But if you’re doing your planning for next year and you’re going back to a 50-year-old organisational chart, you’re going back to your old ways and old structures, according to McKinsey. This after we‘ve just had the biggest acceleration of change in retail, in food service, in the way that we live, our at-home services, in delivery, in AI, in augmented reality, and in the way that we work? If you’re going back to old ways and expecting to make new customers, you’re sorely mistaken. We are not going back, continues McKinsey.
Well, we can’t go back, at least not according to the data, says Rispin. The World Economic Forum (WEF) asked 1,800 members – heads of state, of finance, of banks, of the biggest retailers in the world – one question: By 2025, will we have AI assistance on company boards, assisting boards in making their decisions? 86% of these members said yes.
“I went to all of my Australian customers and companies that I work with and I asked them if they’d like me to help them get an AI on their board. Just one customer said yes. Everyone else said no. It freaks them out,” says Rispin. “Could you just ask the AI and then tell us what it says, Craig?”
This is one of the reasons retail is so behind in the IoT race. Retailers who fail to recognise the race for what it is will slip behind when their customers – the biological trends driving change – go somewhere else.
What does the IoT race mean for customers? Well, it means that customers can have intelligent agents scouring the web for the best deals. These AI agents would have technological brains, they would learn as they go and pass on those learnings to the next customer, and so on. They could look at your entire catalogue and interact with the customer from pre-sale query to close of sale transaction. In the process, they could send your customer a digital 3D model of your product. Using AR (augmented reality) that customer would be able to see if it fits into their home.
You think to yourself “How are customers going to change?” Well, to be honest, customers change faster than the people that serve them. It’s customers – the biological entities in the IoT – that drive change in every which way, now more than ever before. They are more informed, more prone to take action, drive more agendas now, and are much more empowered in many new ways. What do the next steps in this evolution of the customer bring?
Brian Walker is founder and CEO of Retail Doctor Group, a retail advisory and consultancy group and the Australian elected partner member of the global retail expert’s alliance Ebeltoft Group. As an Internationally renowned retail expert and experienced retail speaker, Brian understands what makes retailers and brands successful. Want to learn more about the future of retail? Contact us on +61 2 9460 2882 or firstname.lastname@example.org.