How Retailers Can Adapt To A.I. And The Future Of Shopping

The greatest challenge of the 21st century so far for the retail industry has been adapting to the online world.

But the next hurdle is already in sight. Artificial intelligence will again change the way we shop, according to EY’s FutureConsumer.Now research.

As consumers and homes become ‘smart’, artificial intelligence will change the way we shop (Photo: Simon Dawson/Bloomberg)© 2018 BLOOMBERG FINANCE LP

After consulting with more than 200 business leaders and experts to discover what the life of the “smart” technology-enabled consumer of the future looks like, the global professional services firm predicts that bots will shake up shopping.

That means big changes are necessary for retailers in their thinking and strategy to ensure they remain relevant.

Here’s how the retail landscape will change with the advent of A.I. and what retailers should be doing to keep up.

The dichotomy of future shopping

The future of shopping will be two-fold. There will still be what might be termed traditional shopping, but a new phrase will enter the retail lexicon: transactional buying.

As A.I. bots develop, consumers will be able to outsource the type of shopping which doesn’t excite them.

Shoppers will no longer have to dedicate their time to repetitive purchases such as toilet paper, milk, or washing powder.

Instead, bots will be there doing that kind of transactional buying for them.

In the future, consumers will be able to outsource their unexciting purchases to bots (Photo: Luke Sharrett/Bloomberg)© 2019 BLOOMBERG FINANCE LP

“It puts pressure on retailers and brands,” explained Kristina Rogers, EY global consumer leader. “There are so many fast-moving consumer goods companies that are at risk of their brands becoming irrelevant.”

As chore-focused shopping is ceded to bots or an A.I. assistant, retailers need to think realistically about which of their products will end up being bought by automation, and to seriously consider where to focus their efforts and investment.

“Retailers do have to come to grips with where they see themselves on the spectrum of transactional buying or shopping and where they want to be on that spectrum,” explained Rogers.

Is there a future for traditional shopping?

There will still be a place for traditional shopping — shopping as we know it won’t just disappear.

But consumer standards for it will be raised.

Because it will be so easy to use bots for purchases perceived as boring, retailers will need to work harder to keep their customers engaged with and passionate about their products or risk falling into the transactional buying category.

Whether in-store or online, retailers will have to focus on the experience they’re giving consumers.

They’ll need to think long and hard about which product categories work best for the new way of shopping, focus on creating an engaging store environment and forming deep relationships with customers.

How can retailers engage shoppers?

To truly engage their customers, shops need to do some soul-searching.

“Retailers will have to understand their purpose, and why somebody is in their stores,” said Rogers, EY’s global consumer leader.

Retailers will need to understand their purpose, says Kristina Rogers, EY global consumer leader(PHOTO: EY/KRISTINA ROGERS)

There’s a lot of work to be done now by retailers to ensure their offering is up to scratch.

“The online-offline experience has to be completely nailed down because the consumer is everywhere,” Rogers explained. “You need to understand where the consumer is dipping in and out – in these so-called ‘micro-moments’ – and retailers do not have a good handle on that yet.”

Because consumers make purchasing decisions in a matter of seconds, EY recommends that businesses customize and adapt what products they offer, when and at what price they offer them.

Making shops a space where consumers can interact with brands is also one way to keep them engaged.

“Retailers will have to get creative about what their store looks like – it could be more gamified,” Rogers said, as consumers are now so used to interactive environments.

Experimenting with other new technologies will also attract higher footfall: brands from Nike to Ikea are introducing 3D printing in stores, jumping on the demand for personalization.

Can retailers survive the shift in shopping habits?

Although retail will continue to be a competitive industry, the new challenge of bot buying and automation shouldn’t scare retailers who are determined to succeed.

“Companies need to understand the big technological shifts and consumer trends that stand to radically transform their industry and business,” Rogers said. “It’s vital that businesses grasp the fundamentally different expectations, wants and needs of the future consumer.”

The landscape of shopping may change, but as always, retailers who work hard to adapt and listen carefully to their customers need not worry.

[“source=forbes”]