How AI Will Disrupt Retailing And Consumers

“A life spent making mistakes is not only more honorable but more useful than a life spent doing nothing.”― George Bernard Shaw

The Markets

The TSX finally broke 21,000, but it still lags behind the growth of the US. However, the heavy-laden Canadian stock market is tied to energy. Alberta wants to increase production from 500K bpd to 2.5 Million bpd. Well, the simple economics of supply and demand suggests that demand for oil is destined to decline. Overproducing can lead to lower prices...hmmm! Of course, they want to cash in on the liquified gas market as well. But the US leads the world on both.

It will be interesting to see how the market performs over the next few months. Companies are reporting and giving warnings of slower demand. The market is jubilant over lowered interest rates on the horizon and reacting positively to layoffs. Investors definitely live in a world different from Main Street.

It is my opinion that investments in AI and Data collection and storage will drive the 2025-2030 supercycle. Retail failures may happen at the hands of those who embraced it early.

Personal Log: Time to get back to basics in politics

I am a capitalist, and I am fed up with rhetoric politics, with one-liners and spun yarns meant to impress me that somehow someone with no solutions, who is a career politician or filthy rich, has any idea what the average person really is going through or that they will make it better for all of us. That never happens. I am fascinated with parties promising to lower taxes, but for whom? And what does the average person get? $200 back! Keep it and give it to some underprivileged kid or women's shelter. What we need from politicians is a vision of the future. However, if that future is to keep the status quo with no technological, social, or environmental plans for progress, please resign! I don't know why we put up with or elect politicians who have vendettas against some part of society.

The problem with career politicians who have never risen to leadership roles is that they are benchwarmers. They are in the way, not of younger leaders but of just smarter people, regardless of age, who can do better. My view is simple: everyone gets to serve two terms, and you're out unless you are a cabinet member or the leader of the party. The same in municipal government. Two terms unless you are Mayor. We need new blood with new ideas, not battles over whether there is a climate crisis or how to destroy social progress. We need leadership tied to progress, not protectionism. We need leaders with experience; I don't want retired bureaucrats or politicians who have escaped from municipal state/provincial politics to run for federal. Or worse, decided the best job coming out of university is to be a politician. It's not a job! It's a role of servitude to society.

And we need maturity. I am not interested in voting for anyone angry with the world over how they were brought up or angry with anyone who disagrees with their views. And I want an audit done on each politician as they exit. I want to ensure they have not benefitted from their role other than the stipend they are entitled to for representing us. Full Stop!

Retailing no easy landscape

The retail landscape is getting confusing. Of course, I am referring to all the catchphrases created to serve as convenient shorthand for complex ideas; they also carry the risk of oversimplification and misunderstanding. Retailers must first surf through the jargon-laden landscape and understand what they need to improve their business performance and customer experiences. Then, find the right service providers. Retailers need to ask the presenter or salespeople to peel back on the buzzwords and have them explain the core principles, technologies, and strategies they share and how they will work to meet their objectives.

I am not one who likes being baited by presentations or books that only tell me why and not how. Even opinion editors want to know how. Painstakingly, I do this in presentations, books, and even in my blogs. It is a very different approach. Some of my contemporaries argue that I put too much on the table. Actually, telling you how you should do something always prompts more business. Why? Because it demonstrates that I am not just selling ideas. I am offering solutions.

Back to the problem of jargon. I keep hearing it from business people at all levels: "What does that even mean?" Retailers need transparency and simplicity from all suppliers and service providers. Plain talk goes a long way in building lasting relationships and even stronger performing businesses. Jargon can take simple ideas that could be embraced by many and turn them into mass hysteria and confusion. Let's stop the madness and get back to plain talk.

Retail 4.0 - How Ai will disrupt retailing and consumers

Everything from personalized experiences to understanding individual preferences and behaviors will be elevated. Even marketing will be revolutionized. There is no question that AI is on the agenda of retailers and forward-looking executives. Retail 4.0 is about integrating AI with other technologies like IoT, Cloud Computing, Big Data Analytics, and Augmented Reality. It is defining the new era of Retail 4.0, transforming operations, customer engagement, and business models.

For example:

1. Personalized Shopping Experiences: Understanding individual preferences and behaviors, retailers can offer tailored product recommendations, custom promotions, and targeted marketing campaigns, increasing customer satisfaction and loyalty. All made possible by the emergence of Personal AI Assistants.

2. Business and territorial management: Imagine how AI can simplify and elevate the performance of regional field teams overseeing stores. Not only will they have dashboards, but solutions at their fingertips to improve individual store performance.

3. Inventory Management and Demand Forecasting: AI systems can optimize inventory levels by predicting future product demands based on trends, seasonality, and consumer behaviors. This helps reduce overstock or stockout situations, leading to more efficient inventory management and cost savings. This also includes dynamic pricing models.

4. Data will be a Kingmaker: My message has been consistent. Invest, invest, invest in the ability to collect data. Stop avoiding the most important shift of all. Data will have a value on your balance sheet. It will be the real goodwill used to evaluate your business with investors, buyers, and bankers.

5. Supply Chain Optimization: AI can analyze various factors affecting the supply chain, such as weather patterns, political climate, and supplier performance, to predict disruptions and optimize logistics.

6. In-Store Experience Enhancement: We keep hearing about blurring the lines between the physical and digital. Well, now it will begin to happen as retailers with vision begin to embrace technology tools like smart mirrors and virtual try-on. Personalization with an AI assisting your shopping will push it over the top.

These disruptions offer opportunities for retail businesses to improve efficiency, customer satisfaction, and profitability, but they also present challenges such as the need for new skill sets, privacy concerns, and potential job displacements. There should be no doubt that while everyone scrambles to understand how AI will impact industries, those in the best positions have access to the best data.

Economy: Affordability

Whether it is groceries, housing, or cars, everything has increased. However, today, interest rates have a higher impact on affordability. Car sales are dropping the rates are too high for any purchase to be affordable. Housing sales are meek, and no one will drop their prices unless they need to sell fast. So, don't expect house prices to drop; that story is fantasy. Food prices are still high; the problem is that wages are not keeping up; a living wage is likely $20 an hour. Consumers are making choices, food on the table and a roof over their heads first, and they will drive that eleven-year-old car another year or two; they are becoming frugal, which is what bank governors want. If they kept spending, those on the greed side of the equation would be milking every penny. However, you don't want a deep recession. I get calls telling me it's the government's fault. My answer back is to stop listening to the rhetoric. Greed is what has driven 50% of this inflation. The Bank of Canada held its interest rates at 5.0%; they will begin to decline, and it will be a tough first half of 2024. Companies are already forecasting downward trends. Layoffs are in the wings. Here are the Bank of Canada's comments.

Environment - The weather forecast is fluid

When I was in public school and high school, the winters were harsh, and the snow was deep; I remember opening the front door a few times, and the snow was a couple of feet high, the imprint of the door on it, and the driveway with deep drifts. Today, not so much. I live in the rural part of my community and have a tractor with a blower on the end, and each year, I use it less and less. The summers are hot. This last summer was very wet, and the ground felt like I was walking on a sponge. Things are changing.

Wired has written an article on Texas running out of water. Their dependence on rainfall to refill aquifers and reservoirs is falling short. Flooding in other parts of the world is becoming very common. California has had two major storms that would only happen once every thousand years. And in the UK, the Severn Valley trying to protect the flood-hit area is a challenge. So, plenty of climate events are happening, yet the sense of urgency is not there. Ultimately, governments that dismiss climate change will pay the political price. However, the higher price will be paid by the public, who lose homes and pay higher taxes for fresh water and sewage treatments.

Will we get it right in time? Some want industries to find the solutions. What's their incentive? The government has to put out the money to help them identify and develop new technologies. But why should major polluters change? Whatever happens to the climate won't impact them; they won't be around. They will kick the can down the road and let your grandkids deal with it. That's the new political mentality as well. If we seek evidence that this isn't happening, we will find plenty of theories with no science behind them. Not so sure everyone will bet their futures on that. You may find this Pew Research Center report of interest on how and why people believe climate change isn't real or overblown.

On the EV Front - Tesla's Model Y Rules

There are those consumers that, for whatever their reasons, have moved to EVs. In 2023, the Tesla Model Y was the highest-selling vehicle in the world, with over 1.2 Million vehicles sold. Tesla has plans to introduce another SUV with a lower price in 2025. In the meantime, expect a slowdown in all car sales everywhere until interest rates decline enough to start the next wave.

Society: The Future of Healthcare

Imagine a healthcare system with every diagnosis ever made for every ailment and major disease on databases globally. You walk into a clinic where a doctor can diagnose you, and because they have your DNA in their database, they can match the right treatment that will produce the best results. It sounds like fantasy, but it isn't. This is the promise of artificial intelligence. There are, of course, many privacy and even ethical issues. However, if we can overcome those hurdles, we can improve healthier lifestyles and longevity. The challenge will be that technology can be far ahead of where our healthcare system is today, and the ability of physicians and clinicians to keep up will be more daunting than it is today. That's why, as we begin to trust the technology for its accuracy, at some point in the future, we may even be conducting approved AI-medical assistants to help us address our maladies. It's not that farfetched. Many technologies exist today, from EKGs to smartwatches and even wearing patches to monitor glucose levels and Bluetooth blood pressure gauges linked to your health app. You can send it to your doctor while talking over a Zoom call. AI is also helping track the testing of a high-powered radiofrequency ablation, proving effective and safe for treating Afib. This is the future, and if we could leap forward one hundred years, I am sure our future descendants would be looking back and wondering how we managed without all the technology they have.

At the end of the Day

Einstein and others have suggested that the past, present, and future exist in the same timeline. If it's true, then what we do today reverberates into the future immediately. Impacting our grandchildren and their descendants, etc., and with today's technology, chances are someone can look us up in digital archives. So, humor me. If the future could travel back in time, what reason could I give them to come and visit me in the past, or should I say observe me? It would have to be something very compelling. This is our human challenge. You see, at the end of the day, the future is a product of what we leave behind. Have a great week!

I am available for speaking engagements and as an advisor to senior executives and boards. As a former senior executive and board director, I bring real-world experience to important conversations. Strategy - Change Leadership - Artificial Intelligence - Brand Development

You can contact me here: [email protected]