The Future of Retail: Drones and HoloStores? — Informilo

By James Silver, July 8, 2013 Competition from online commerce will force highstreet stores to cut back dramatically on physical space as the retail industry struggles to reboot itself for a new era, predicts David Roth, CEO (EMEA and Asia) of The Store, WPP’s retail practice.

The future of retail will be an intersection of the digital and physical, a world in which digital avatars know what we want, drones help keep track of inventory and holostores will likely be used in-store to deepen customer experience.

“Retailing has never been easy,” said Roth, who was speaking at a recent event focussing on the Future of Retail in Central Saint Martins School of Arts & Design in London. “It’s absolutely not for the fainthearted and that [sense] is only going to get more vivid.”

Roth said retailers have not yet confronted realities. “There will undoubtedly be fewer and smaller retailers,” he said. “We don’t need the space we’ve got. And those retailers [which do survive] will have to create a model which fuses the virtual and the physical together and also allows consumers to pick up merchandise they have bought from virtual spaces.”

Roth added that he had no doubt that society would be significantly poorer without a thriving high street. “The high street is going to have a very different role. It’s going to have an interconnectivity role [linking] the physical and virtual worlds.” Citing WPP CEO Sir Martin Sorrell, he said: “There is absolutely no doubt that the high street dilapidation that [Sir] Martin [Sorrell] referred to, is in my view a community cancer and something that we as a society have to ensure doesn’t happen. We also have to stop customers being seen as tax cash point machines for local and national governments,” he added, referring to VAT, sales tax and business rates rises, before going on to call for Governments to do more to save high streets. “Government intervention is desperately and urgently required to ensure that the high streets we see around the UK and the world still survive [albeit] in a different form.”

Roth predicts there will be a complete polarization of products. Household goods — the sorts of everyday things we buy in supermarkets, for example — will be automatically sold and delivered to our homes or collection points. “Those products which are routinely bought and don’t need a lot of emotional engagement are going to move more and more towards being done virtually, towards algorithmic systems which will know what your consumption patterns are, by various technologies in your home. [They] will be ordered for you and arrive mysteriously,” he said. “Those products which require more choice and analysis and hands-on expertise and experience — will require a [physical] retail solution.”

Most vital of all in the new retail economy, argued Roth, will be data, which he described as “the new oil”. He said: “We must all understand this. Just as oil is useless without a refinery, data too is going to be useless without being able to refine it, understand it and manipulate it. We will get to the situation, and it’s not so far in the future, where all of us will have a data avatar surrounding us which will understand who we are [and our habits] at any moment in time.”

Roth predicts that retailers who don’t know how to smartly parse Big Data will be out of the game in five to ten years time.

During the event WPP’s The Store and Intel unveiled twenty (as yet uninvented) retail innovations, which Intel’s “Chief Evangelist and Futurist”, Steve Brown, predicts will shape the industry in the near future:

* Drones are expected to play a part in several key stages of the supply chain. As intelligent autonomous machines, they will allow retailers to operate with greater computational intelligence in the real world, getting to places and spaces that would be impossible for human employees. From monitoring the environment and stock levels within all areas of a warehouse, to implementing the ‘last mile’ personal delivery service to customers, drones will be both reconnaissance and ‘dropship’ carrier vehicles.

* Holograms will be used in-store to deepen the customer experience. Retailers will be able to integrate them as part of the physical store to create virtual environments. Whether a few centimeters high and projected on the counter top or several meters in height and used in windows or in store display, 3D projections will play through scenarios, ask the customer questions and respond accordingly. Using Big Data and information held on the individual’s smart device, the holograms will be programmed to interact and deliver calls to action based on the customer’s history and preferences.

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First published on on July 8th 2013.