“Alexa, what’s new?” She instantly responds, “The new tools of the Technology Revolution.” And trust me, they are awesome new technology tools. If they are embraced and used right, they can provide retailers enormous success. Cautionary note: As tempting as it may be, these tools should not be embraced and acquired just because they are the “coolest” new toys. Select them based on how they will benefit consumers, not you.
The newest crop of tools is comparable to the first Model T Ford rolling off the assembly line during the last massive shift, the Industrial Revolution. Ford’s innovation was a new-world “tool” for transportation; it not only changed the entire ecosystem, it also inspired the creation of a vast number of new industries. At the time, the old-world transportation tool was the horse and buggy. Those that embraced the new-world tool transformed their lives and the businesses that supported the new automotive industry. For example, the development of manufacturing ignition switches for cars vs. the switches they used to “ignite” their horse’s speed. Those that didn’t adapt to the new tools perished. Getting the picture yet? The Technology Revolution will kill a lot of old-world businesses if they don’t speed up and retool their models.
So obviously the need for transportation didn’t change. But the tools to enhance and accelerate transportation did. In parallel, the need for “Marketing 101” has not changed: To learn what the consumer is dreaming for, create the dream, and then market and deliver it to him or her. But the tools have, and they continue to disrupt, transform and replace the value chains and business models across all industries. This high-tech implementation of “Marketing 101” basics is taking place on a level beyond our comprehension. These tools make the Model T pale in comparison. And the number of new industry ecosystems that will be born during this revolution is unfathomable.
Furthermore, consumers’ needs and desires have been elevated into demands — because they can. Technology tools have empowered consumers more profoundly than industrial tools, and in the process, these new tools are changing history at warp speed. Every Individual literally has unlimited and instantaneous access to whatever their heart desires, just a key tap away, or in a shop across the street. And these desires are delivered in a nanosecond, wherever the recipient might be, however they wish it to be presented. And all of this is rolled into a great, personalized experience. It better be, or you’ll lose your customer in the few seconds it takes for your offerings to show up on their mobile phones.
You can get the latest news on all these tools and the brave entrepreneurs building new business models in one fell swoop at Shoptalk. This is where the macro picture is indelibly painted. Presenters at Shoptalk Europe — from every single new-world upstart and every single old-world legacy business who “gets it” — shared their stories. In every case, their solutions start from a consumer need, desire or fantasy, and then work back through the entire value chain, all the way to ideation and creation. And all of them enthused how new technology tools were embedded in, and enhanced every part of each customer’s personal journey — from creation to consumption.
Speaking of Which…We Are Officially in the Personalization Century
It does all start from a consumer need, desire, solution or fantasy. However, before AI, machine learning, algorithms and sophisticated CRM database management systems, consumers could only be identified in cohorts by demographic, geographic and/or lifestyle segments. Furthermore, the value chains — from ideation and creation to sourcing, distribution, logistics, marketing and final point of purchase — were all structured and systemized for mass markets. In the dark ages, consumers used to shop and buy in stores or occasionally from catalogs. In the “Personalization Century,” the store is no longer the point of sale. Each consumer is now his or her point of sale.
The clarion call becomes louder and clearer at each successive Shoptalk that there is only a market of one — and potentially eight billion markets of one. The new mantra: personalization. Technology that can identify each and every person, and everything about that customer, is the most important starting point for all consumer-facing businesses today. These tools enable savvy retailers to build the entire personalized, seamless value chain, from creation to consumption. And, the chain just keeps getting shorter, faster and more efficient.
The tech chain begins with the aggregation of data from each consumer’s browsing and transactional points of contact. Then a deep analysis determines the most important desires of each individual. And finally, the selection of the relevant technologies to build or transform the business model to seamlessly and rapidly deliver the personalized product, content, service or experience the consumer wants.
This constantly evolving personalized chain is continually being innovated. And what came out loud and clear at Shoptalk was the need for speed, all triggered by voice recognition and mobile. You can kiss off traditional advertising because social media – Facebook and the new darlings of the platform, Pinterest and Instagram — and influencers (“bloggers and vloggers) are the fastest growing personalized advertising medium. The nextgen retailers as well as “old world” legacy brands and retailers such as Coca-Cola and Nordstrom, among others, pay these wildly popular influencers with millions of followers commissions for the sales they bring in. And do you know how many upstarts are scaling into the millions of sales overnight, using this new advertising media? It’s countless.
In this world, everyone is being disintermediated! And investors are still hanging in there, underwriting creative entrepreneurial retailers with enough waves of funding to enable them to scale up fast. Speed was the word of the moment in Copenhagen, and you have to ask yourself, in the end, how fast is so fast it becomes irrelevant to a sustainable business model. All of this money and effort is to guarantee personalization, at scale. The mass market and all its communications vehicles have become irrelevant in the face of eight billion personal markets.
Personalization is Bonobos personalizing the style and fit of your pants. Stitch Fix, Birchbox and Trunk Club, among others; analyze your personal style and desires to curate a scheduled delivery of products. Personalization is Saturn’s physical robot, Paul, or virtual headset, Paula, greeting you when you enter a store; and with all of your personal information, they will lead you to new products they know you will like. Or, personalization is Nordstrom Local, a neighborhood shop, where you will be engaged by a personal stylist (equipped with all of your information) to co-create a personalized outfit – while you are getting a free manicure and sipping a glass of fine wine. Hundreds of startups modeled on personalization were on display at Shoptalk. It’s the inevitable future.
Personalization will reach its pinnacle through the conversational devices of Amazon, Google, IBM and others. For example, Alexa will learn everything about your life and how you live it and will eventually be reminding you of appointments, and suggesting products it knows you need or want, before you know. Ultimately, personalization will be manifested by a 3D printer in everybody’s home, for example capable of replicating a pattern of Levi’s jeans you purchased. And they will print out the jeans.
Shoptalk as Alexa for Retail
Shoptalk as Alexa is a metaphor. Shoptalk is telling me what I need to know before I even know that I need to know it. If I ask Shoptalk what else I should know, they’ll clue me in. And, by the way, the more information Shoptalk gets from me, the more they know what to provide for me at their events. Shoptalk is getting better, smarter and more visionary about what the industry needs, even before the industry knows they need it. Just like Alexa.
And here is a final, maybe more important reason to come to Shoptalk, where the old and new worlds meet “at scale” (I mean, thousands). Walmart is acquiring its way into the digital world with Jet.com and now looking to acquire a “long tail” of entrepreneurial upstarts. Amazon is acquiring its way into the physical world with Whole Foods, and I predict a huge apparel retailer might be next. While this is already yesterday’s news, if you take a page out of Walmart or Amazon’s playbook, you will find a multitude of potential synergistic ideas, and maybe even an acquisition, to make you relevant in this Technology Revolution. Get to Las Vegas next March for another stimulating global learning experience, powered by Alexa AKA Shoptalk. You’ll appreciate knowing what is happening next and how to prepare for it. Fast.