5 decades of Moore’s Law (which states that computing power doubles every 18 months) means that in the 2020’s we will experience change at a pace that makes the current decade seem positively sluggish. A Trinity of Transformation, involving more data, more compute power and more advanced algorithms is underway.
And this will have consequences, for us personally, and for the companies we all work for. How we live, work and shop will change, perhaps radically.
In a world where we all have a €30 million, 1980’s supercomputer in our pocket, where JD.com in China can run a warehouse processing 200,000 orders a days whilst employing just four people, and where we can have products and services tailored to our own preferences, we will see the meaning of ‘Shopping’ transformed. The notion of physical stores being the way we get goods into the hands of consumers will fade away, and whilst it seems clear that many will fail to adapt to this new world, the opportunity to stand apart, to create clear and strong competitive advantage, will be great.
The 2020’s will be the decade when the superiority of ‘Human + Machine’ working together will become clear. The best companies will use technology to capture, process and analyse data at an unprecedented scale, and at a level of granularity not seen before. Artificial Intelligence (designed and guided by Human Intelligence) will allow us to personalise product recommendations, optimise the assortment of goods each store holds, and adjust pricing to maximise sales, and profit.
The 2020’s will see the primary purpose of physical retail becoming a ‘Customer Acquisition Cost’. Stores will act like Media, being places where Brands can demonstrate their values, products, attitudes, and ethos. Compared to the cost of customer acquisition online (where the ‘Facebook or Google Tax’ has to paid) the very best stores and shopping centres will represent great financial value. Inspire offline, service online will become the norm.