Magic Commerce – artificial intelligence for fabulous retail
The dematerialisation, demonetisation and democratisation of shopping has only just begun. Consumption as we know it today will cease to exist. Magic Commerce is one possible future scenario.
The following text is an excerpt from the GDI study “The End of Consumption as We Know It”, that can be ordered on our website.
A value shift from product to experience and of owner to user is taking place. The control of information flow is becoming a crucial competitive advantage: if you only control the flow of goods, you will lose.
The bad news: The heightened value of experience and the power of the consumer are making business models of the retail industry of the past 150 years obsolete. The good news: A multitude of new business models are emerging. Just as we understand that patterns of consumption will be diversely differentiated, we understand retail will benefit from new diverse perspectives.
Who decides what we buy? Humans or machines? Where is the development of the human-machine interface heading? And where do we buy? From companies created and managed by humans or from self-learning algorithms and smart companies without employees? Shopping and consumption will not be isolated processes, but rather a complex, interdependent, entangled systems with many layers.
At the (presumed) end of the current evolution of retail, shopping will become a fairytale phenomenon. Artificial intelligence takes on the role of the fairy godmother: I express (or think) of a desire, will get sprinkled with a little fairy dust – and voilà! What I desire magically appears in front of me. Should I be unable to afford the object of my desire, or I don’t feel like making a choice, it will show up virtually; the difference between reality and virtual reality won’t matter anymore.
The path to an AI fairy godmother has many stages, including predictive modelling, new forms and interfaces of human-machine communication, automated customer service, and machine learning controlling the supply chain process. We are already well on the way to Magic Commerce:
- Skubana, a platform for online sellers, uses data analysis to provide constant feedback to companies on product performance and maintenance of optimal inventories.
- With the help of blockchain, trusted decentralisation of processes can advance quickly. ShipChain and Ambrosus bring transparency and security in shipping and production and reduce the costs for companies and consumers.
- Chatbots are still in the early stages of using AI in customer service. The bot interface learns with each interaction, mimics how to respond perfectly to any consumer question and offers detailed feedback to producers.
- In the next wave, AI recognises feelings and “it” becomes emphatic, understanding the frustration of a consumer and reacting with empathy. Ava, a virtual customer service agent of Soul Machines in New Zealand operates on a higher intuitive level of personalisation and market experience.
In a society of abundance, it is less and less about fulfilling wishes and more about serendipity, the happy coincidence that allows you to discover what you haven’t even been looking for. Soon it will be normal and expected that smart assistants fulfil all kinds of personal wishes. To keep these assistants interesting and relevant for users, they must be able to challenge users, up their game and help them surpass their own expectations.