Reaching Retail Singularity

like from Nordstrom?” “Sure, send them to my phone” and voila!...you can check the suggestions out on your commute, and arrange for a fitting room appointment, ready with your selections, on your trip home. Next you ask “what sounds good for dinner?” “There is some salmon in the freezer, and Kroger has fresh Brussels sprouts and heirloom tomatoes that would go well with that. Should I add some to your weekly order ‘household items list 1’ that will arrive today by 3:00 PM?” “Ok, sounds good—and two of the tomatoes please!”Continued on page 3

THE INEVITABLE ONE-NESS OF PHYSICAL AND DIGITAL

Imagine this scene from the not-so-distant future: You are making breakfast while Vivian—your cloud-connected life management hub on the kitchen counter—goes through your morning briefing. A friendly voice and accompanying screen present your daily schedule, progress toward your goals, top news stories and weather, friends and family social posts, messages, and upcoming events.

It’s just getting started. “You have a meeting tomorrow and your favorite outfit is at the cleaners. Would you like to see some suggestions for some things you may

BRANDS DRIVING CHANGE

LOWES: Virtual reality How To

The Holoroom How To at Lowe’s is an on-demand VR skills clinic that explores the relationship between VR technology, engagement, and learning retention. The technology immerses guests in a DIY project with step-by-step instructions and feedback that provides customers with the confidence and motivation to take on projects, such as learning how to tile a shower.

The Retail landscape is always evolving, as is the technology that propels it into the future. Companies merge as others file for bankruptcy and it’s important to keep up with the ebb and flow of business. The reason one company excels is just as revealing as why another cannot survive; we have something to learn from each of them. Here are four companies we feel are doing unique things to raise the bar.

TIMBERLAND TREE LAB: Curating the story

The experiential Tree Lab features a gallery-style setting that will completely change every six weeks, bringing fresh and innovative brand experiences to consumers. While testing the products in the Tree Lab, guests are invited to sample a local craft beer or enjoy a bottle of water, all designed to enhance their visit and leave them with a great memory to go along with that beautiful new pair of shoes.

IKEA: Evolve beyond the big-box

The Swedish retailer has embarked on a series of retail experiments to better connect with their shoppers. They have developed an AR app that lets customers visualize what products will look like in their own homes, before buying them. They have also started opening smaller stores closer to city centers, and are testing pop-up stores to promote their bedroom and kitchen ranges.

UNIQLO: Trying on vending machines

Uniqlo is popping up at airports and malls across the nation—but not through retail storefronts. The Japanese retailer is launching vending machines that will enable customers to purchase T-shirts and lightweight down jackets, packaged in boxes and cans. They are exploring alternative concepts to see if they can drive brand awareness and be more successful in the U.S. without making a big commitment.

dependent, relying on actual designed spaces to trigger and integrate engaging experiences. This promises that physical retail will be a venue for AR that will unlock new potential for store design and merchandising.

AI and machine learning will also play a fundamental role in Retail Singularity. With the ability to find patterns and correlations in seemingly unrelated, unstructured data, AI will make recommendations that magically fit situations. Based on your schedule, location, current budget status, weather, customer ratings—perhaps even your current blood pressure—expect to get an appealing recommendation on where to have lunch.

INNOVATION = THINKING BEYOND SHOPPINGAlready physical and online shopping isn’t an either-or, it is contingent and fluid. There are some categories well suited to pure ecommerce and auto-replenishment, and some that are not. Also, there are need states that are better solved by one or the other, and still some that are best served through a synergy of both. When the current transitional dust settles, Retail Singularity will eliminate the task of replenishing consumables and minimize the effort of choosing between alternative products. Ultimately physical stores won’t compete for the same dollars spent online. Brick and mortar locations will fit an entirely new role—transforming from merely convenient access to inventory to filling in the natural gaps and shortcomings inherent in digital shopping with experiences. For traditional retailers, the challenge will be determining the best way to create the required synergy that will integrate digital and physical, and unlock new potential. The answer will lie in using data, insights, and creativity to determine how to right-size, right-purpose, right-assort, and right-invest in brick and mortar locations.

Shopping is fast becoming an anachronistic term, like dialing the phone. The word shopping will likely endure, but the act of shopping will be vastly different—less walking, more talking—less effort and more emotion. Journey and experience are important but not enough. “There is a need to make sure we identify the core business problem, craft insight driven scenarios, and then use rapid visioning of solutions with a blend of digital and physical elements” says Carpenter. At ChangeUp we approach innovation and rapid prototyping—getting to execution quickly, we work to integrate and reconcile the role of technology and new or existing physical retail. The future dictates new business models and not mourning the sacred cows that may need to be left behind.

Welcome to Retail Singularity, where bots, natural language voice interfaces, and broadly integrated data reacts and predicts the what, when, and why of shopping. The idea has been talked about for a few years, but it is gaining momentum in the age of acceleration and exponential technology. Derived from the concept of Technological Singularity—a term referring to a hypothetical date when machines will surpass humans in intelligence—Retail Singularity is the point at which the distinction between online and offline shopping is meaningless. This will occur when artificial intelligence can integrate our consumption patterns, preferences, and behaviors into delightful shopping experiences.

BEYOND OMNICHANNELDespite progress in “omnichannel” retailing, we currently shop in two separate universes, making conscious decisions on how and where we engage with retailers. “We are close to a point when shopping will be an extension of life that doesn’t need us to adapt to it because it responds to us,” states Lee Carpenter, ChangeUp Partner and CEO. The implications are historical. Retailers must begin to see their physical stores as new kinds of assets, like local distribution hubs and, in some cases, as break-even “experiential” marketing channels. The physical space will need to be justified and purposed in new ways as the majority of retail profits will eventually come from digital interactions. Shopping will be as close as our reach, the sound of our voice, or a response to a text from sensors built into packaging. The physical store will be an option, a preference; a choice not a necessity.

DRIVERS OF SINGULARITY The future retail visions are relentless and becoming reality fast: The Internet of Things will enable smart packaging and appliances to auto replenish, or prompt you to do so; stores as inventory for same-day delivery; parking lots repurposed for product pick-up “terminals”. Amazon’s plans with Whole Foods will up the ante for grocery and beyond, and Walmart is investing heavily to lead as well.

Apple ARkit and Google ARCore developer apps for the new generation of smart phones means an onslaught of Augmented Reality tools for retailers and brands are on the horizon. AR can allow visualization of objects in context, and other yet undefined applications and experiences like comparing new sofas in your living room or alternative deck designs in your backyard. Get ready to see AR emerge as a powerful tool for decision making and driving desire and demand. And according to AR gurus, the most robust AR applications will be location

NEED TO KNOW

From Our PartnersThe ongoing conversation in retail today is how to create engaging experiences that inspire shoppers. At ChangeUp we develop innovative solutions for today’s unprecedented retail challenges, from working with startups to re-energizing existing concepts. We are passionate about having a consumer focus as we build brands and reinvent retail. As ChangeUp continues to grow, we are excited to announce the opening of a new office in Los Angeles. This addition will enable us to extend our service offering and provide our clients with the high level of service they expect and deserve. Always here and ready to talk—feel free to reach out to start a conversation.

BUILDING FUTURE FOCUSED BRANDS AND RETAIL EXPERIENCES

Contact Us1-844-804-7700retail@changeupinc.comchangeupinc.com

LEE CARPENTERPartner - CEO

LYNN GONSIORPartner

BILL CHIDLEYPartner

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AREAS OF EXPERTISECustomer Insights | Retail Experience Design | Brand Strategy | New Concept Innovation | Digital/UX Design

84% of US households never buy groceries digitally

Retail ApocalypseHeadline grabbing media word exaggerating

the state of the industry

$5-8 Average same day delivery fee

14,248number of retail locations

opening in 2017

10 MILLIONself-driving cars on the

road by 2020

66% of Customerswould rather find items by themselves through a digital

device than work with sales associates