The Future of Shopping How will consumers shop in 2025 and beyond? Short introduction… Want the presentation? Link with me… Our mission is to foster digital global trade…

Peace is the natural effect of Trade Charles de Montesquieu Philosopher 1689 - 1755 The Ecommerce Foundation focusses on four main pillars to foster digital trade

An online handbook by/for Helping 2.5 million consumers 37.000+ ecommerce experts making informed buying decisions

20+ annual reports about Allowing consumers and ecommerce in 50+ countries merchants to shop and sell worldwide 5 © 2014 Demandware Retail is confronted with several key challenges

New New New Tech Consumers Markets New Tech “ is a technology company. We just happen to do retail”

Werner Vogels CTO Amazon Technology is the driving continuous innovation Technology Cost Then Cost Now Reduction Harddisk $ 0.007 / Mb (2000) $ 0.000035 / MB (2013) 200x in 13 years CPU Power $ 48 / GFLOPS (2007) $ 0.08 / GFLOPS (2015) 600x in 8 years Network bandwidth $ 25 / Mbps (2007) $ 0.63 (2015) 42x in 8 years 3D Printing $ 40k (2007) $ 100 (2014) 400x in 7 years Solar energy $ 30 kWh (1984) $ 0.16 kWH (2014) 200x in 20 years Sensors $ 20k (2009) $ 79 (2014) 250x in 5 years Industrial Robots $ 500k (2007) $ 22k (2013) 23x in 5 years Drones $ 100k (2007) $ 700 (2014) 142x in 6 years DNA sequencing $ 10M (2007) $ 1.000 (2014) 10kx in 7 years Full body scan $ 10k (2000) $ 500 (2014) 20x in 14 Years

Source: Singularity University a.o. Mobile Commerce Mobile rules! Panera Bread is investing heavily into an instore mobile experience Mobile The entire investment is funded by increased revenues

• 30 million users

• 70% are using Apple devices

• 30% of sales is digital

• 10% is order online & pick up

• Also use to order from table

• Home & business delivery are online only (no calls).

• Customer frequency has increased between 12 – 45% http://www.mitreagency.com/work/01-panera-bread.php Online Payment The end of the check out is near… online payment is becoming seamless ApplePay amnd Paypal are experimenting with ‘unbuying’ transactions.

Check Out Page

Basket Page

Unbuy

Product Detail Page

0% 10% 20% 30% 40% 50% 60% 70% Also offline payment is becoming faster, easier and is slowly disappearing… A smile may be enough to pay in the future… Visual Commerce ASOS uses photo’s to improve search results

https://techcrunch.com/2017/08/10/asos-adds-search-by-photo-to-its-fashion-ecommerce-app/ https://techcrunch.com/2017/08/10/asos-adds-search-by-photo-to-its-fashion-ecommerce-app/ Amazon, Ebay, Pinterest and Google all offer photo to online shopping matching Augmented & Virtual Reality IKEA is leading the way in Augmented Reality Both in the orientation process as well as the assembly process Virtual reality will play an increasing role in the selection process How is yet to be seen…. Virtual reality will play an increasing role in the selection process How is yet to be seen…. Retailers are exploring Augmented & Virtual Reality AR / VR Virtual mirrors may become the norm for Fashion, but experts expect VR to be 5 years in the making

http://factor-tech.com/future-cities/4451-retail-future-virtual-reality-set-to-dominate-tomorrows-shops/ http://www.reddretailgroup.com/virtual-reality-augmented-reality-retail-disruption/ Warby Parker is using Apple’s Face ID to map glasses on faces AR / VR

Source: newscult.com/warby-parker-uses-new-iphone-x-face-id-match-users-perfect-glasses-theres-catch/ Warby Parker is using Apple’s Face ID to map glasses on faces AR / VR

Source: newscult.com/warby-parker-uses-new-iphone-x-face-id-match-users-perfect-glasses-theres-catch/ Facebook is investering heavily in VR communities Tech Instore Instore display and cameras are being integrated to offer a new experience Instore Integrating pricing, face recognition, message personalization and more… Retail robots have not developed much further in the last year Robots Still welcoming people, guiding them to the right product and scanning in-store inventory Retail robots have not developed much further in the last year Robots Still welcoming people, guiding them to the right product and scanning inventory Retailers like MediaMarkt, Lowes, Target and Best Buy are all introducing Robots Robots in warehouses are becoming the norm Cutting labor costs with 80% and warehouse size between 25 – 40%

https://www.youtube.com/watch?v=XO7fvrdTCgs Eatsa does not have in-store staff, ordering is done via tablet They claim to be able to serve 70 people per 5 minutes

Source: www.youtube.com/watch?v=QVweHrTY31g With 500 cashierless convenience stores BingoBox is surpassing (18) Operational costs of a BingoBox are $ 632 per month while making $ 4500 and $ 9000 in sales More tech is integrated into the store concept to add value Instore Like a body scanner by Unspun to create custom fit jeans and New Balance using a foot scanner

blog.fit3d.com/fit3d-scans-used-to-make-custom-jeans-68e316916a36 https://www.volumental.com/partners/ Brands are building stronger store experiences Adidas is planning to control 60% of the brand’s global retail space by 2020 (up from 30% in 2016)

http://fortune.com/2016/12/14/nike-adidas-retail-future/ http://www.sldesignlounge.com/news-articles/category/retail-design/ Artificial Intelligence Data (text, behavior, search, social, photo, video) is the new oil

Artificial Intelligence the oil drill North Face uses IBM Watson to offer guided text based search Allowing a natural way to select fashion considering Artificial Intelligence is all about personalization Personalization may lead up to 30% more sales

Product Targeting Sorting Churn prediction Personalization Analysis Predictive search Recommendations Chat Bots

Awareness Interest Consideration Purchase Retention Advocacy

Message Inventory Instore Just in Time Purchasing personalization Management Identification Delivery

http://maxpixel.freegreatpicture.com/Personalization-Data-Retention-Fingerprint-279759 AI is analyzing 5 billion new photo’s on social media every day Allowing new forms of targeting Stitch Fix is using AI to better service its customers (39% only buys from them) Fashion is curated based on customer preferences, social media activities and feedback

Elaborate intake Unique curation Continous feedback

Source: Internet Trends 2016 – Mary Meeker (kpcb.com/InternetTrends) & algorithms-tour.stitchfix.com/#recommendation-systems Social Commerce Younger generations are searching more visual (using Pinterest and Youtube)

Source: Internet Trends 2016 – Mary Meeker (kpcb.com/InternetTrends) Social media ‘owns’ 6% of the ecommerce market As a result Wechat Pay is gaining market share at the cost of Alipay Messaging keeps increasing and is more and more used for buying (especially in Asia) Monthly Active Users on Select Social Networks and Messengers, Global, 2011 – 2015

Source: Internet Trends 2016 – Mary Meeker (kpcb.com/InternetTrends) Voice Commerce Voice is replacing written communication faster than we think… It seems to allow you to build a more personal relationship

Google/Peerless Insights, “Voice & Voice-Activated Speakers: People’s Lives Are Changing,” n=1,642 U.S. voice-activated speaker owners who use their device monthly, A18+, Aug. 2017. Voice is the third internet era after the Web and Mobile With 500 million devices Google Assistance will become the operating system for voice Google will take voice even an extra step into the age of assistance Alexa is integrated into cars, fridges, watches, purifiers, locks and more by 50+ brands Internet of Things & 3D AI, Voice, IoT will merge into entirely new kinds of products Adidas is moving 3D printing to production, selling 100.000 3D printed shoes in 2018 Internet of Things raises new concerns about data ownership

• Electronic toothbrush: • the producer? • the retailer? • the dentist? • the user? Also in the bike industry Internet of Things is on the rise… Everywhere where products are available, the consumer will make purchases from the TV, on the street… #ME #HERE #NOW New Consumers Generation I is about the Internet The Maslow Pyramid according to my son Self- development

Appreciation

Social contact

Safety and Security

Physical needs Generation I is about “I” (or me)

60% 80% Growth in searches Growth in searches “….. For me” in 2 years “Should I …..” in 2 years Media consumption rules the day of Generation I Mobile accounts for 52% of their online time (4:10 hours), nearly half is connected for 10+ hours Generation I biggest fear… Losing their mobile phone Generation I has new Ideals Environment, Transparency, Honesty, Integrity Ownership is being replaced by preowned, refurbished & rental Peerby allows to share …. anything Leading to some interesting changes in behavior Consumer loyalty is disappearing. You have to prove your brand again and again… If you want loyalty, buy a dog… Time is the most valuable commodity of consumers, especially young people How much is an hour worth? Both consumers as well as expert predict further growth of online shopping Consumers with 12%, Experts with 19%

GFK Shopping Tomorrow Study 2018 The smallest categories are expected to grow the most Online Food/Near Food will explode with 200 – 450%

GFK Shopping Tomorrow Study 2018 53% of the Dutch consumers shopped online in Asia In 2023 49% of the total online spending by Dutch consumers will be abroad

GFK Shopping Tomorrow Study 2018 New Business Models Seven of ten of the largest global companies are based on a platform business model

Source: https://innovator.news/the-platform-economy-3c09439b56 Venture capitalist now only invest in the number 1 of an industry who owns 85% Their main question to start-ups: “How will you survive GFAA?”

https://twitter.com/evankirstel/status/1025054963586740230 Shopify supports 800.000 stores both SME’s as well as those of Nestle, Unilver Its platform had 218 million shoppers in 175 countries and sold $ 100 billion in 2018 $1.86 trillion was spend globally on the top 100 online market places in 2018 Marketplace sales account for 52% of global online retail sales of which 95% if owned by the top 100

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0 $50B-$100B+ $1B-$50B $250M-$1B $40M-$250M $1M-$40M https://www.digitalcommerce360.com/article/infographic-top-online-marketplaces/ Who owns these brands? Amazon's private label sales is expected to grow from $7.5 to $25 billion in 2022 Starting in 2007, it now offers 125 private brands with 72 in the last 18 months

https://edition.cnn.com/2018/10/08/business/amazon-private-label-brands/index.html The basis for Amazon’s success: ’ flywheel Which is to a large extent comparable with Walton’s Productivity Loop (Walmart) There is a clear vision behind Amazon’s Whole Foods buy

http://www.businessinsider.com/amazon-buys-whole-foods-changes/#whole-food-stores-across-the-country-seem-to-be-experiencing-similar-mini-transformations-a-location-in-the-los-angeles-area-apparently-molded-an-amazon-a-out-of Facebook has as ambition to become the Retail’s new storefront Facebook Marketplace allows consumers to sell & buy via Facebook With 550 million visitors and 18 million posts in May 2017 alone Facebook launched dating in 19 countries allowing users to create a “Dating Profile”

https://newsroom.fb.com/news/2019/09/facebook-dating/ Google owns 92% of the search market in the ‘Western’ world (82% worldwide)

https://www.statista.com/chart/8746/global-search-engine-market-share/ Google knows …

What you email What you shop What you watch

What you search

What you browse

What you do

What you do at home

All your passwords… Where you go And everything else…

https://nl.pinterest.com/yapck/google-stuff/ Google is investing into Shopping to get back its product searches from Amazon Adding shopping into Youtube and Image Search (copying Pinterest) and merging with Google Express Alibaba can no longer grow in China and is entering ‘Amazon’ countries Especially in India Amazon and Alibaba are fighting it out… Alibaba's ambition is to become the world’s 5th economy How can Companies Surive? Companies are focusing on building a stronger, “Love brand” Technology now help building a truly engaging brand

Fun Relevant Engaging Social Helpful

Holds people’s Provides clear and Identifies with Connects people Is efficient, easy attention in an customized individual needs with each other and adapts over entertaining way information and wants time

https://www.slideshare.net/fjordnet/the-love-index But how to build a “Love Brand”? By merging the left & the right brain, emotion & logic

Experience driven Data driven Emphatic & emotional Logic & price Super culture centric Thinking global Seamless Sophisticated Transparent Scientific

http://game-icons.net/delapouite/originals/mono-wheel-robot.html The Museum of Ice Cream is a great example of creating retail experiences Fun

• Launched in October 2016 o Wait list to get in o Increased prices to reduce waitlist o Average price $ 100 per ticket • Ice cream is universal and brings people together: o Allowing interaction o Exploring the senses o Igniting imagination o Playing like kids, build for adults • Now has 4 locations, each 50.000 square feet • All traffic is via social media • Never spend a dollar on marketing • Does not pay for A-locations • They are the destination Transparency is the new cool: what is in it, how it is made, what it costs Relevant Everlane offers fashion from ethical factories, designed to last and sold in a transparent way Levi’s: a 150 year old start-up being market leader in jeans with only 5% Engaging It wants to become market leader in the wardrobe creating lifestyle solutions BARK understands that pet owners have become pet lovers Engaging The company’s empathy allowed it to grow to a 100 million company in 5 years

• 56 million USA households own a dog • 70 million dogs live in the USA • 50% let their dogs sleep in their bed • 33% are willing to sleep less comfortable • The “Happy Team” customer service reps create a strong bond with customers • Offering insights that allow the company to develop its own (better) products &Pizza is not about pizza but about belonging to a specific culture Social Work hard, live fast, order quick

• 40+ Boutique pizza shop in 5 years • It is anti-establishment • Every pizza shop is designed differently: o Representing the local neighborhood o and having its own name • 100 employees have the “&” tattoo

“One of the things we try to do before we open our doors is spend 90 to 120 days in the community speaking to people, learning about what’s going on.” Michael Lastoria, CEO Zola has reinvented the Wedding Registry for Millenials Helpful Having made the wedding process seamless for 100.000 couples in 5 years time Wholefood Market offers a “produce butcher” service Helpful You pick your preferred fruit and veggies. Then the produce butcher will chop, slice & dice Let’s Wrap Things up…. … Technology allows consumers to buy globally, redefining markets

Technology Consumers Markets Interested in this presentation or our free services? Link with me! Or go to www.ecommercefoundation.org

Jorij Abraham Managing Director Ecommerce Foundation E: [email protected] M: +31 6 52 84 00 39