In the last 12 months, the world had plenty of reason to fall out of love with tech. Silicon Valley’s ongoing privacy failures and inability to address misinformation, dotted by lackluster products, only ramped up in 2019.
By now, the public — and state and federal lawmakers — have gotten an eyeful of the tech sector’s privacy failures, while struggling to square it with those companies’ insatiable appetite for more data. All this and more feeds into a general distrust of technology. And that leaves retail in a somewhat awkward place, because data seems all but assured to continue driving the consumer experience in 2020.
So far, the experts have been advising stores and brands en masse to put data at the heart of their growth strategies. That’s only going to accelerate this year, especially for merchandisers.
According to Graham Cooke, chief executive officer and cofounder of marketing personalization firm Qubit, they’ll become more “data-empowered,” serving as a lynchpin for marketing, optimization, IT and the customer.
This year will bring more individualized, real-time personalization, he added. When brands analyze and take action on large amounts of data in milliseconds, “customer-centricity will be fully realized because machine learning models will actually understand each customer individually,” Cooke said.
The prospect is exciting for brands, but it may be the stuff of nightmares for privacy wonks, not to mention increasingly sophisticated tech users. Cooke acknowledged as much: “We’re at a crossroads on consumer data and its ownership,” he added. “Right now, brands such as Google, Facebook and Amazon are still on the winning end of customer data ownership, but I predict this will begin to change in 2020.”
Of course, winning is relative. Especially when it comes to big tech.
Facebook and Google’s advertising models have been facing intense scrutiny and, some believe, an inevitable march toward regulation. Facebook’s incoherence in addressing misinformation has become legendary. Meanwhile, Google’s $2.1 billion Fitbit acquisition and Ascension hospital partnership, which puts tens of millions of patient records at stake, raised eyebrows in 2019.
They’re not alone. Amazon’s efforts to connect the home triggered surveillance concerns last year, while Apple drew criticism for its perceived cooperation with the Chinese government, failure to deliver its anticipated AirPower wireless charger and what looks like Apple Card’s algorithmic bias against women in setting credit limits.
The public can shake its head at companies pushing mantras like “don’t be evil” while watching them engage priorities that their own employees find distasteful. But historically, people have allowed those feelings to live in a bubble, apart from the rest of their lives.
That may be shifting. Already the privacy failures have prompted some users to close their Facebook accounts or choose camera-equipped smart home products with physical shutter or microphone on/off buttons.
How the sentiment translates to retail will matter a lot this year. None of the experts believe that 2020 will bring a mass tech exodus — far from it — but it will bring changes in consumer behavior.
“People will spend even more time using technology in 2020 than they did in 2019. It’s inevitable,” said Michael J. Wolf, chief executive officer of management consulting and strategy firm Activate. “They will be more discerning, however, about the applications and devices they use, moving to ones that they feel they can trust with their private information.”
Governments want to give consumers more rights, including the ability to delete their data. “Retail brands really need to pay attention to new legislation, including the California Consumer Privacy Act, or they could suffer the consequences,” Cooke continued. He sees the rise of applications that let shoppers port their data into environments they can control, and that could shift the “power dynamic” between marketers and consumers.
Regardless, it won’t stifle tech’s momentum in retail this year. There’s simply too much on the brink of mass adoption to ignore.
“When people in the future talk about 2020, they’ll remember it as the year of significant technological advancement,” said chief product officer Omar Khan of Magic Leap, a tech firm that works with brands like H&M, Wayfair and others to deliver new types of experiential retail. “[It’s] the start of a decade that will completely change the way we live, work and are entertained in the decades that follow.” The reason: greater processing speeds and new computing models.
In particular, Web 3.0, artificial intelligence, faster 5G connectivity and the so-called Internet of Things — which allow devices to work together directly, with little to no human intervention — will “unlock possibilities that were previously restricted to science fiction,” Khan added. Imagine, he said, things like connected smart mirrors that can project digital clothes onto consumers.
As for big tech, Activate’s Wolf believes retail tech platforms like Shopify could give indie, digital native brands such as Allbirds and Kylie Cosmetics a way to sidestep forced marriages with major players like Amazon.
Other indies will find success in “recommerce” or secondhand apparel online, he added. “From online renting to resale, recommerce is becoming a mainstream behavior for 18- to 34-year-olds,” said Wolf, explaining that younger consumers don’t want to wear the same outfit in multiple social media posts. That, plus a rising sense of eco-consciousness, has ignited the sector. “Over 50 percent have bought and/or sold a used item online in the past year alone, and nearly 20 percent have rented clothes or accessories online,” he added.
Other trends — from social commerce to physical stores adopting a growing load of digital systems, AI, sensors and other tools — put a finer point on tech’s influence on the retail business. Against this backdrop, it looks like neither consumers nor retailers are ready to break up with it.
But they may be willing to acknowledge that the starry-eyed infatuation stage is over.