Amazon, Alibaba And Nike All Point To The Next Innovation In Retail -- Personalized Physical Spaces

Last week I wrote a piece entitled, Amazon Go Means No More Status Quo. The piece not only heaped praise on Amazon but also highlighted how Amazon Go, over the long-run, is about far more than the mere buzzwords of "checkout-free shopping" -- the thesis being that, if one studies Amazon Go closely, he or she will see that it already hints at the next great innovation in retail history, the personalized physical store.

While I expected and even predicted the news back in February that Amazon would roll out more stores this year, I did not expect, in less than one week from publishing this most recent Go piece, that new activities would emerge that would validate this thesis even further.

The news this week comes from Alibaba and Nike.

Alibaba will in July debut its new FashionAI concept store, a store in which Alibaba plans to supercharge smart mirror technology with RFID, machine learning, and computer vision to bring mix-and-match styling options to its consumers anywhere they shop, and, in this case especially, in store.

Similarly, Nike has created Nike Live, a new concept store in Los Angeles that leverages digital data from the surrounding user community to tailor in-store omnichannel experiences to their needs, like try-on and order pick-up, as well as to determine the product assortment the store carries.

Nike says the product assortment in the store will even rotate every two weeks!

Like the objects in a car's review mirror then, retail's next great innovation -- the first fully personalized physical commercial experience - is now even closer than it may appear.

Retail is a creature of habit. Take a look at the below timeline for some 30,000 feet in the air perspective:

Old As Dirt: General Stores, Mom & Pop Shops, Local Markets
1850s: Macy's Opens in New York City
1880s/90s: Sears Debuts Its Catalog
1920s: Sears Builds Its First Stores to Attract Suburbanites
1950s/1960s: The First Shopping Mall and Walmart and Kmart Arrive on the Scene
1990s: Amazon Sells Its First Books
Every 30 to 40 years something big happens in retail. It is only a matter of time then before the next wave of innovation crystallizes. Something important is likely to emerge between 2020 and 2030, and companies like Amazon, Alibaba, and now even Nike are doing their damnedest to ensure that they are leading what is to come rather than risking being left out in the cold, like so much of the unprepared carnage that litters the side roads of retail's history (see Sports Authority, Circuit City, Borders, and so many others).

It's not just Amazon, Alibaba, and Nike either. Take a look collectively at some of the innovations that have emerged over the last few years:

Bonobos: Guideshop Apparel
Rebecca Minkoff: Fitting Room Intelligence
Starbucks: Mobile App and Order Ahead Technology
Alibaba's Hema Supermarket: Mobile Scan-and-Go Grocery Shopping and Fulfillment Centers
Amazon Go: Mobile App and Visual Recognition Checkout-Free Shopping
Gravy: Live-Stream Shopping
Alibaba's FashionAI: Machine Learning and Computer Vision Apparel Styling In Store
Nike Live: Localized Omnichannel Experiences and Product Assortments
Robomart: Autonomous Grocery Stores on Wheels
Zume: Automated Mobile Restaurants
The above list is just a sample. It could easily be augmented. But no matter where the list stops or where it begins, it foretells three important things about the future.

First, it hints at the Holy Trinity of next generation retail -- cloud commerce, mobile applications, and location analytics -- that, when fused together, give retailers an unprecedented level of data capture within the retail value chain. Physical spaces, whether stores or other purposed entities, in this world become like their digital brethren, understood and analyzed with the same funnel-like metrics and A/B tests that give rise to the personalized experiences consumers encounter online today.

Second, it highlights the importance not just of digital in transforming retail, but also the importance of holistic experience design that, yes, takes the best of digital but also blends the most important aspects of the physical and the human as well in order to combat the universal points of friction within today's shopping experiences.

For example, Rebecca Minkoff's fitting room intelligence is not just smart because of its mirrors. It is smart because its fitting room and mirror designs are coordinated with the actual operational processes of real humans within the store environment. Similarly, Starbucks mobile order pick-up is more than just a digital achievement. Where the cups are physically placed for pick-up in a store and how the barista says, "Thank you," are just as important innovations as anything containing 0's and 1's.

Third, via mobile technology, and likely voice and messaging down the road too, these recent innovations also augur a world in which retailers will have a one-to-one personal connection and platform for communication with their consumers, regardless of whether the ultimate commercial medium is digital or physical. They indicate that consumers' mobile phones will soon become remote controls for the commercial exploration of the physical world, or, better said, they will become tools to unlock Easter eggs within shopping experiences that will vary from one individual to the next.

No one person's physical shopping experience will need to be like anyone else's anymore.

However, while important, the above events are still just road signs on the trail of history. The destination that will serve as the future bedrock for the next generation of retail 30 years hence still has not emerged. Could it come from either Amazon and Alibaba?  Quite likely.

But that is not the most important question about the future. No, the far more important question, so as not to dismiss it with hubris like so many did when e-commerce arrived, is:

How will we know the future when we see it?

In a future world where the primary point of differentiation between physical and digital commercial experiences will be the shear act and sensory appeal of being somewhere, this delineation in and of itself will signal the future. Not only will the industry see the blend of the physical, digital, and human that leverages the early innovations described above, but it will also see the personalization of the senses.

When food is personalized, when touch is unique, and when what one sees is different from others as one stands looking out upon the world, that is when it will be clear that the next great innovation in retail has arrived.

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