The Future of Retail: Technology, New Demographics & Personalisation

Artificial intelligence (AI) is, in summary, machines that have the cognitive abilities of a human. The data obtained is allowing sophisticated targeting of consumers and personalisation of the experience. The AI movement is not new, but fast-growing and it has been interesting to read recent reports showing the changing views towards technology, growing trends and future predictions.

A common theme is the level of acceptance dependant on age. Research has shown that millennials are much more comfortable with new technology and data, likely because it has always been integrated into their daily lives. Older generations appear to be slower to adapt to advances in technology and more resistant, having much bigger issues with trust when it comes to sharing their personal data.

An interesting point raised at revo’s Insightful 2019 conference (20^th March 2019) was the changing demographics. Currently, those aged 65+ represent 18% of the UK population, however, the population is ageing: people are living longer and having fewer children. The predictions from the event show that by 2050, 25% of the population will be those over 65.

Only 17% of consumers trust retailers to handle sensitive data properly.

This statistic needs to change. Biometric information is required for retailers to tactfully utilise AI and have a meaningful impact. If retailers can’t change the current consumer concerns surrounding personal data, the benefit of offering a personalised service is at risk.

To build trust, retailers need to create smart, safe and effective policies to gain and maintain data. This has resulted in a growing need for tech-savvy professionals who understand AI, can manage data, take an ethical approach and implement new policies to mitigate legal risks and keep in line with new legislations such as GDPR.

66% of organisations believe they will require roles to manage data ethics.

The shopping centres of the future will have a tech-savvy audience across the ageing demographic. If you consider today’s population, most of those aged in their thirties own a smartphone and engage with AI through chatbots, smart speakers or payment methods. In 2050, these individuals will be in the 65+ age demographic, representing a quarter of the population and be much more familiar and confident using technology, than those in that bracket today.

Retailers have masses of opportunity to incorporate AI into the shopping experience with some brands already implanting new initiatives. A great example is in-store robots or virtual assistants; greeting customers, offering directions or checking stock levels – amongst much more.

Stock management through AI delivers real-time data of stock available, assistance in predicting future demand, improved home delivery strategies and ultimately, streamlined processes. Live stock levels can be shared with consumers which could have a significant impact in driving footfall, with >60% of shoppers stating they would be encouraged to visit a physical store if they could check real-time product information.

An omni-channel approach has become the norm for the retail industry. Brands need to deliver the same message and service to consumers in-store and online. In addition to consistency, AI has delivered opportunities for brands to work smarter, utilising in-store information to improve online strategies and visa versa. AI image recognition can deliver advanced in-store shopper analytics, showing key dwell time areas and popular products. For online, AI can track popular viewed/purchased products and other interests through search history. This information can be used for in-store visual merchandising decisions and stock allocation, and for the website, assist with product visibility and personalised landing pages.

To engage and attract the attention of consumers, stay ahead of competition and fight back against online, technology needs to be embraced. Trust is a challenge when it comes to gaining data and is a major challenge when it comes to utilising all the opportunities with AI. However, when trust has been built, these opportunities and experiences will be expected by consumers, making the need to adapt quickly and effectively to emerging technologies increasingly more apparent for future success.