02 Jan Industry Predictions for 2019

As 2018 closes out with record-breaking retail sales, we turn to 2019 to identify those technology trends that will have a lasting impact on the continued evolution of retail.

AI-based Personalization

Every retailer understands that product recommendations can dramatically influence consumer interactions. McKinsey and Company reports that its recommendation engine generates as much as 35% of Amazon’s onsite revenue. High-quality product recommendations can be found everywhere, from targeted email messages to landing pages to the product pages and cart to drive increased cross-sell and upsell. However, only a few have truly personalized their recommendation engines. Instead, commerce platforms still leverage static segmentation where everyone sees similar products if they visit a specific page or interact with a specific email. Consumers expect far more individualized products recommendations in real time.

Artificial Intelligence (AI) helps analyze customer touch points and behavior, universally and irrespective of channel (mobile app, website or email campaign).  AI-based personalization can predict behavior and deliver unique, personalized experiences. The models constantly train to analyze and process large amounts of data such as user behavior, preferences, feedback, and other characteristics to predict the most effective combination of content, product, and offer.

It is imperative in today’s competitive marketplace to listen and understand what customers are sharing through their thoughts, actions, and preferences in real-time. AI-based personalization will allow businesses to communicate with customers through dynamic segmentation (activity segments, behavior segments, interest segments) and targeted messages through email, push notifications, SMS, or live chat.

Visual Search/ Merchandising

In 2018, we saw Google and Bing introduce visual search features on their search engines that use images to return matching content. Unsurprisingly, image search is highly relevant to sectors like fashion and beauty, where visual content is king. Expect to see more in merchandising innovation such as:

  • Twiggle – Twiggle applies Natural Language Processing (NLP) to let search engines provide improved search results based on typical speech patterns of the consumer. E.g. looking for a cheap laptop with a good graphics card.
  • Clarifai – Clarifai improves eCommerce search by focusing on visual elements through advanced image and video recognition. It will automate the addition of tags or keywords to images and deliver visually similar products through AI-driven algorithms.
  • Pinterest – Pinterest enables users to select a photograph and then ask Pinterest to find similar items using image recognition software. A picture of a brown velvet chair will generate images of various brown chairs, or velvet chairs, or chairs with a similar style.
  • Bing – Bing will augment visual search with supplemental information. When a photo is uploaded, Bing will identify the object in question and provide related information by providing additional links to explore. It will tell you the history of the statue you are looking at or what tree is growing in your neighbor’s yard. If you upload a picture of the sweater you were admiring, but don’t know its brand or where to purchase.

Voice Search

Businesses that think voice search is used by only a few, are missing a huge opportunity. Voice search over mobile devices has continually been growing and one of the prominent reasons is convenience. No one likes typing a long search on their phones and voice search has been enhanced to decode human language. Voice search capability is a great tool especially as virtual assistants like Siri, Alexa, and Google Now can be found in refrigerators, smoke alarms, and bathroom mirrors.  IoT continues to push boundaries.

Here’s a tip: to optimize for voice search, align your long trail keyword SEO strategy and content strategy with the way people speak. Understand who your customers are and what they buy often, so you can generate content and keywords that resonate with your customers. E.g. “blue shirt” is a keyword that anyone would type into the search on your site. However, when you speak, you would probably say something like “I want to buy a blue shirt for work”.

Typically, those using voice search have specific needs and are looking for a fast response. Those who quickly serve the most relevant results will win the business.

Facial Recognition with AI

When we speak of facial recognition, we may think of security and fraud detection.  Well, we are seeing this technology in the retail industry more and more. The use of facial recognition by Walmart, Saks Fifth Avenue, and others has been met with consumer privacy concerns. As highlighted in a survey by richrelevence, the adoption of facial recognition technology seems to face challenges of privacy, ROI and more.

So, what is the value to retailers? Personalization. Today’s omnichannel customer expects increasing ease in his/her shopping experiences. Regardless of channel, customers want to be recognized and expect that targeted promotions will be personally relevant.  Huge advances have been made in personalization over the web, but what about in-store personalization experience? Facial recognition technology can detect gender, age, ethnicity, and emotion, which can be used to confidently build a complete customer picture. Specifically, facial recognition cameras installed at the store entrance could further recognize customers as they enter, and push relevant offerings to the customer’s smartphone utilizing Bluetooth beacons or similar technologies.

Will facial recognition be an increasing concern for businesses or will the power of personalization overcome the obstacles in securing consumer confidence in 2019? Let’s see.

Data Security & Privacy

In the EU, 2018 brought the legislated compliance with the General Data Protection Regulation (GDPR). Across the globe, the adoption of cloud computing, AI and other technologies comes with the mandate to secure systems while maintaining the privacy of individuals. And, we see the tech giants taking action.  Oracle, for example, is building the second generation of cloud platform (OCI) for the enterprise to protect critical data (secure from core to edge), and to easily move apps and data from on-premises. Designed to run in the public or private cloud, it is simple to scale up and to upgrade in response to changing security requirements. As attacks become more sophisticated and protections of consumer privacy increase, technology developed with data security and privacy in mind will drive many tech decisions and accelerate the move to the cloud that is touted by many as a more secure choice.

Augmented Reality

Augmented Reality (AR) is a superimposition of computer-generated images on the user’s view of the real world. It recognizes real-world objects and augments them by displaying a 3D object, on-demand. AR devices can interact with a 3D object through touch and voice gestures. AR has seen great success in areas such as indoor navigation applications for real-time positioning, displaying AR content at precise physical spots, and enabling 3D objects. In retail, consumers can access a “real world” view of goods before purchasing as Harley Davidson has done in offering a customized bike or Charlotte Tilbury allowing consumers to view multiple makeup styles in an AR-augmented mirror before making a purchase.  Per Robert Scoble, “Ten years from today, the center of our digital lives will no longer be the smartphone, but a device that looks like ordinary eyeglasses. What you really see and what is computer generated will be mixed so tightly together, that we won’t really be able to tell what is real and what is an illusion.” The Fourth Transformation: How Augmented Reality & Artificial Intelligence Will Change Everything.

Chatbots

A chatbot is a specific computer program designed to simulate a conversation with human users over the internet. Powered by artificial intelligence to help understand customer requests, personalize responses, and improve interactions over time, chatbots help businesses understand customer preferences and respond accordingly.  Personalized communication is based on data collected from consumers about their preferences, behavior, and history. Businesses are able to personalize responses and optimize engagement while the integration with analytics can generate user insights that can extend across all channels.

In summary, the impact of technological advances will significantly enhance the user experience in 2019 as personalization reaches new heights and information flow converges for a more consistent experience across channels. The increased application of machine learning, artificial intelligence, augmented reality and the Internet of Things will bring exciting new opportunities (and risks) to engage and win the business of consumers who raise the bar with expectations. Here’s to the advances to 2019.

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