The consumer landscape
The rainbow sponge: a popular choice at children's birthdays and something fun to bake at home, but apply this to the future of consumerism and it creates an intriguing taste profile: something sweet, something sour, or something in between?
How about a splash of custard with it? Really, though, consumerism is like a six-layer rainbow cake with varying degrees of complexity across the digital and physical landscape.
For starters, let’s look at an example ingredient to the cake mix: the retail store. Although retail stores have heavy overheads, inflation added an extra burden on these costs. With high street store vacancies at the start of 2023 remaining at 13.8%, this was the only retail location type not to see quarter-on-quarter growth [1].
In addition, with the added convenience and rise of out-of-town shopping centers, retailers are remaining cautious about the mixture of high street and shopping center outlets in their portfolio. Irrespective of location though is the technological aspect: an angle many, regardless of whether they have high street or shopping center-based branches, are struggling to keep pace and balance with.
AI in the mix
The magnetic force of Artificial Intelligence (AI) has transformed and shaped society across an extensive variety of industry verticals. With the right applications, AI can bring substantial global economic benefits. In the retail and consumer packaged goods segment alone, generative AI could bring in between $400 to $600 billion per annum [2].
In addition, COVID-19 in particular crafted a fundamental shift in how business’ elevate their consumer brand reach and digital presence. For example, in fashion retail, the power of virtual dressing rooms utilizing computer vision and augmented reality (AR) was, and continues to be, harnessed by brands to bridge the gap of being able to visit a store whilst providing a more immersive shopping experience.
With Virtual Dressing Rooms (VDRs) Compound Annual Growth Rate (CAGR) forecasted around 21% between 2023 and 2030. [3], it’s an area still very much, despite the extensive technicalities, one of the best ways to immerse clients in the brand universe. For example, back in March this year, Savage X Fenty formed a partnership with Intel to give customers the option to get scanned using Intel’s patented body shape technology. [4]
Specific applications aside, AI is breathing new life into understanding the consumer on a physical level. For example, heat mapping: being able to see where people are congregating in the store, and their facial expressions - these elements bring a different dimension to customer experience.
With 56% of consumers saying they’d be repeat buyers from a retailer offering a personalized experience, these tools are important in what’s a dog-eat-dog race for consumers. [5]
Furthermore, instead of having to continuously worry about staff worrying about stock levels, computer vision is being used to manage inventory, making sure the right products are in the right place at the right time.
A classic example of this is with the Amazon Go stores, where customers have the ability to walk in, pick up what they need, and walk back out.
Seamless on the surface and computer vision wizardry in the background, it’s an example that with the right approach, retail can be transformed. It’s not a concept that’d necessarily effectively translate across every retail store, but it’s an example of a new era of convenience.
The future of consumerism
Ultimately, the modern consumer wants convenience, value for money, and minimal friction in the purchasing experience. As AI technologies rapidly expand, this is where things will become contenious. For example, a recently published pre-ChatGPT MITRE-Harris survey identified a drop in public trust in AI.
For example, only 39% of US adults believe AI is secure, down nine points from November 2022 and furthermore, 82% of US adults believe AI is being used for malicious intent compared to 78% in November 2022 [6]. On the other hand, though, 62% of millennials and 57% of Generation Z are excited by AI technologies and their potential benefits [6].
With this data in mind, treading sensitively and with less obsession with the bottom line will be key for companies to get buy-in for future technologies and maintain consumer trust.
In addition, as the legislation around Generative AI, and not just AI itself starts to crystallize, more consumers will be wanting to ensure the data they’re sharing will genuinely add value to the brand experience.
Final thoughts
How Emerging Technologies have shaped and will continue to shape the future of consumerism is one of the most exciting areas today: the unique blend of data transformed through revolutionary algorithms will be an area under increasing scrutiny, especially with legislation playing catch-up.
Consumers are only going to get savvier, AI is going to get savvier, and therefore businesses will need to find new ways of creating a brand universe defined through a subtle, but compelling offering.
Bibliography
[1] Retail Store Landscape: Weston, S. (2023). High street retail vacancy rate stagnates. [online] Drapers. Available at: https://www.drapersonline.com/news/high-street-retail-vacancy-rate stagnates.
[2] Economic Potential Generative AI: www.mckinsey.com. (n.d.). Economic potential of generative AI | McKinsey. [online] Available at: https://www.mckinsey.com/capabilities/mckinsey digital/our-insights/the-economic-potential-of-generative-AI-the-next-productivity-frontier#/.
[3] Virtual Dressing Room Market size: www.fortunebusinessinsights.com. (n.d.). Virtual Fitting Room Market Size, Share | Global Report, 2026. [online] Available at: https:// www.fortunebusinessinsights.com/industry-reports/virtual-fitting-room-vfr-market-100322.
[4] Savage X Fenty Virtual Dressing Room Partnership: Robert, Y. (n.d.). Savage X Fenty And FIT: MATCH Introduce In Store Virtual Fitting Room Experience. [online] Forbes. Available at: https://www.forbes.com/sites/yolarobert1/2023/03/09/savage-x-fenty-and-fitmatch--introduce-in store-virtual-fitting-room-experience/.
[5] Personalisation in 2023: The State of Personalization 2023. (n.d.). Available at: https:// segment.com/pdfs/State-of-Personalization-Report-Twilio-Segment-2023.pdf.
[6] MITRE-Harris AI Survey: MITRE. (2023). Public Trust in AI Technology Declines Amid Release of Consumer AI Tools. [online] Available at: https://www.mitre.org/news-insights/news-release/ public-trust-ai-technology-declines-amid-release-consumer-ai
tools#:~:text=80%25%20worry%20about%20AI%20being [Accessed 22 Sep. 2023].
