The role of artificial intelligence will be a key factor in the development of retail in the coming years.
Article by Dimitri Balakirev, Malls.Com.The conference Shoptalk Europe gathered for the first time in Copenhagen, and more than 2,300 representatives of retail and e-commerce companies from around the world discussed the latest trends in the industry and innovation. Among the speakers at the event were representatives of such large companies as Walmart, Google, Amazon, Alibaba, eBay, IKEA, and Westfield, as well as new brands and start-ups. Within the framework of the conference program, more than 200 thematic sessions were held, with 225 speakers.
At the grand opening, representatives of traditional retail demonstrated confidence in their strategies and showed their latest projects. Steven Lowy, Co-CEO of Westfield, the head of one of the largest owners of shopping centers, spoke about the opening of the renewed Westfield Century City, in Los Angeles, USA. А complete upgrade was carried out in the shopping center, which cost USD 1 billion and added 40,000sqm of retail space to Century City. Now, the group is working on the expansion of Westfield shopping center in London and, next year, will start construction of Westfield in Milan. Westfield plans to develop the malls and build new facilities in the most prestigious locations in key cities, annually introducing new projects. Each shopping center will receive all the latest innovative solutions from the group: Westfield is working together with retailers to consolidate and analyze all information about customer behavior in their shopping centers.
Steven Lowy, Westfield
Jerry Storch, CEO of Hudson's Bay Company, which owns such retail chains as Lord & Taylor, Saks Fifth Avenue, Galeria Kaufhof, and other brands, talked about the company's plans to open new stores. In the autumn of this year, the first European store of Hudson's Bay was opened in Amsterdam and company plans to expand the network in Europe to 10 department stores. Jerry was extremely negative about the decline in retail stores and the transition of retail to the Internet, which is happening now in the US and other parts of the world. Hudson's Bay’s head said that "Closing stores starts a spiral that “can't be stopped.”" In his opinion, the only right strategy is to open high-quality stores and create convenient online stores, simultaneously.
Aerial silks at Google Party
One of the main issues for discussion at the conference was the implementation of artificial intelligence (AI) in the process of interaction with customers, as well as processing and storing information. According to Gartner, by 2020, 85% of all actions with consumers will be managed using AI. A third of the retail market participants will use AI to increase at least one of their main sales channels.
“We’re putting AI front and center as a driving force to make [smart commerce] happen,” said eBay’s chief product officer, RJ Pittman. “The curve is steep, but the opportunity is extraordinary. So, we’re going to start climbing: we’re right on the precipice of a transformational inflection point.”
Artificial intelligence can be used for machine learning, visual search, voice recognition systems, and other areas, to create a personalized customer experience. Vladimir Stankovic, Global Digital, and e-commerce director of Camper, is confident in the effectiveness of the introduction of AI: “Natural language processing and visual search are providing new ways to discover the product. I believe there is a huge value from this technology."
Tommy Hilfiger and such online players as Zalando and Pinterest are already working on the introduction of visual search. President of Pinterest Tim Kindal said that his service aims to become the new Google in the field of visual search.
Ronan Harris, Managing Director, Google UK & Ireland, Google
Ronan Harris, managing director of Google UK & Ireland, spoke about the change in the global strategy of the Internet giant: earlier Google was formulated as "Mobile first company" but has now become "artificial intelligence company." The introduction and development of AI technologies into Google products has become the primary goal of the corporation. The last five years have been very successful for Google, and the company has been able to adapt its products to the modern mobile Internet. The next step is to connect all the capabilities of artificial intelligence to interact with users, analyse, and predict their needs.
Michael Ward, Managing Director, Harrods
Managing director of the famous Harrods department store in London, Michael Ward, did not talk about innovations and technical innovations but shared the unique experience of premium customer service for Harrods. The Harrods brand avoids replicating and does not seek to become a network. Michael believes that in the same way as the premium segment, it is worthwhile to prevent any outlet formats and discount stores that his colleagues from Nordstrom and Macy's are trying to do in the US. In Harrods, they prefer to serve customers at the highest level, only in one legendary place, with the style and love for the English. Significant recent changes for Harrods were the renovation of the interior decor and the installation of a unique escalator inside the store, as well as new restaurants and cafes.
And, finally, Seb James, CEO of Dixons Carphone, in his vivid presentation raised the topic of the advantages of large retail chains before online retail. The issue of confrontation between online and offline was raised in other reports, but the head of Dixons Carphone had to answer the direct question of how he plans to compete for the consumer, for example, with Amazon. Seb James cited examples of personal work with buyers, professional salespeople in retail stores, showing much better results than online sales. Due to constant work with consumers, Dixons Carphone succeeds in selling costly and additional products with the help of up-sell and cross-sell offers in stores.
Seb James, Group CEO, Dixons Carphone plc.
In conclusion, it should be noted that the conference Shoptalk Europe emphasized the main trends of the industry: online retail, with all the innovation and technology, is trying to create its presence points and stores offline, understanding how vital live communication is with customers. Traditional retail successfully builds its efficient e-commerce systems, connecting all the accumulated knowledge and data on consumer behavior.
Very soon, it will be impossible to draw a line between online and offline retail: any severe market participant will use all omni and multi-sales channels. Those who can use modern technologies—both in the field of artificial intelligence and spheres of payments, logistics, and marketing—will win.
In 2018, Shoptalk Europe Will Combine with Shoptalk U.S. to Create the First Global Event Focused on Retail and E-commerce Innovation, to be held in Las Vegas. The details of the global Shoptalk event in March 2018, including registration, are available at www.shoptalk.com.
Malls.Com team invite you to exchange views on the future of retail, shopping centers, stores, new technologies, and innovations. If you are interested in this topics, have questions and want to share your views, please write to [email protected].