March 10, 2016
This analysis is by Bloomberg Intelligence analysts Anurag Rana, Caitlin Noselli, Jitendra Waral, Chen Grazutis and Poonam Goyal. It first appeared on the Bloomberg Terminal.
The day when a robot greets you by name as you enter a store might be sooner than you think: from artificial intelligence to virtual reality to “smart” clothes, new technologies are poised to dramatically change how businesses and their customers are able to interact. This Bloomberg Intelligence report – also the subject of discussion at a recent series of Bloomberg X gatherings for marketing leaders in New York, presented in partnership with Pega – looks at what’s around the corner.
An Aethon, Inc. TUG robotic courier. Photo: Noah Berger/Bloomberg
Internet of Things Deployment May Get Boost from AI Advances
- Improvement in artificial intelligence, especially in the areas of facial and speech recognition, video analytics and relationship analysis is driving greater demand for data across all industries to better understand customer behavior.
- This demand for both structured and unstructured data may further spur growth in Internet of Things, especially as the cost of sensors and storing data continues to decline.
- New frameworks such as Hadoop, which analyze these data sets, are helping drive this growth further.
- IDC expects spending in this area to reach $1.2 trillion by 2018.
What Consumers Want From Virtual: Shopping, Movies, Home Office
- Consumers appear interested in virtual reality for a variety of applications beyond video games. E-commerce sales should benefit from VR’s adoption for online shopping.
- Movie studios are likely to expand their audiences, with companies such as Legendary Pictures and Disney investing in Magic Leap and Jaunt.
- Possibilities such as the virtual home office are further down the pipeline, but may drive consumer engagement with VR in later cycles.
A dress made with low temperature flexible electrical conductive paste on display at the 2016 Wearable Expo in Tokyo. Photo: Tomohiro Ohsumi/Bloomberg
‘Smart’ Clothes, Connected Devices Are Shaping Retail’s Future
- Emerging technologies such as smart clothes, connected devices and virtual reality are shaping next-generation retailers.
- More powerful and widespread sensors are speeding up the adoption of the Internet of Things, which has multiple applications from customer engagement to supply-chain.
- “Smart” clothes behave like wearable devices that capture data from the user, allowing manufacturers to enhance their products.
- Virtual reality allows buyers to visualize the product in a different environment before purchasing it.
Photo: Jason Alden/Bloomberg
Retail’s Mobile Explosion Is an Opportunity
- The rapid proliferation of smartphones and tablets in the last five years is changing the way consumers browse and buy products.
- Mobile accounted for 47% of U.S. retail traffic in March, compared to 29% two years earlier, according to IBM digital analytics.
- These changing habits are forcing retailers to enhance their mobile capabilities, from content to payments.
- Retailers are also using smart devices to improve the in-store experience, for example by helping customers find items that aren’t in the store.