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The Future of Interactive Customer Experiences

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Podcast February 18, 2020

The Future of Interactive Customer Experiences

Every new year brings the promise of new, magical, game-changing digital innovation. But what we expect from technology doesn’t always deliver quite the way we want it to. As retailers consider the expansion of 5G, AR, VR, and artificial intelligence, there are a lot of promises. But what will they actually deliver? In this episode we speak with Christopher Hall, Managing Director of the ICX Association, about five big tech promises for 2020, and whether he thinks they’re going to live up to the hype.

Transcript

Melinda: Every new year brings the promise of new, magical, game-changing digital innovation. But what we expect from technology doesn’t always deliver quite the way we want it to. For example, shutting down airports wasn’t flagged as a big concern when drones became available to consumers, driverless cars are supposed to be taking over the streets yesterday, and Facebook was certainly never designed to become a political weapon, but here we are.

As retailers consider the expansion of 5G, AR, VR, and artificial intelligence, there are a lot of promises. But what will they actually deliver? Today we’re speaking with Christopher Hall, Managing Director of the ICX Association, about five big tech promises for 2020, and whether he thinks they’re going to live up to the hype. Christopher, thanks so much for being with us today. Can you start us off just by telling us a bit about yourself?

Christopher: I’d be glad to. I started out in this field, actually, almost exactly 10 years ago. I just celebrated my 10-year anniversary in the kiosk/digital signage/interactive technology space. I started off as a reporter working on kioskmarketplace.com and then digitalsignagetoday.com for a number of years. And then, a few years ago, I decided to go from the reporting side to the advocacy side and thought I would prefer to advocate for the industry and for all the people in it, and saw that digital signage was really more, in my view, part of the overall spectrum of interactive customer experience technologies. And so, there was an opening at the ICXA, and I took over as Director, and have been loving it since then.

Melinda: Well, congratulations on that anniversary. Just in case some of our listeners don’t know what the ICXA is, can you just give us a little brief history about that?

Christopher: Sure thing. The Interactive Customer Experience Association is kind of like what it sounds like. It is an association that is promoting interactive customer experiences. And so I like to quote from our website, which is actually quoting from a talk I gave. And it’s this idea that if you have customers, whether you realize it or not, you’re in the customer experience business. You know, you think you operate a retail store or a restaurant or a hotel, but that’s really dinosaur thinking. Today’s world, you’re a customer experience company that just also happens to sell clothes or serve food or turn down beds.

The idea behind the association is to bring together the different players in the interactive customer experience world, so to speak, and to help them better create transcendent experiences for end-users, for customers. We like to bring together folks like Shikatani Lacroix and Intel, LG, NEC, and then with our brand members like Marriott and Under Armour and Taco Bell or Arizona State University, Pepsi, the list goes on and on, and create a way of networking and cross-pollinating, I guess, and educating each other on how to better do this kind of stuff to really create amazing engagements and experiences for customers.

Melinda: That’s a great explanation. We’re really thankful to have had ICXA’s support and to have collaborated with you. And you are always doing really interesting things and pushing the envelope and talking about subjects just like the subjects we’re going to talk about today.

So, there are a lot of tech companies racing to create the next big thing that’s going to change the game for retailers. And for the purpose of today’s conversation, we’re going to take five and break them down. So, we’re going to start with 5G. Everybody’s talking about it. Some people are really excited, others are not so excited. Can you tell us a little bit about what 5G is promising to deliver to retailers?

Christopher: You know, to me, 5G really offers options for retailers, essentially. 5G is a bandwidth play. It’s an enabling play. If you have more bandwidth and speed, there’s more you can do. It makes the ideal that we always talk about of having instant interactions between consumers and their own data at the point of sale, at the point of weight, at the point of contemplation even more real.

Honestly, I really like what Jean-Pierre said in his blog up on your site earlier this month, “Stores and branches can be transformed into responsive platforms, delivering curated personalized content and information to each customer through their mobile devices.” I think that’s it. And I would say that it’s not just even maybe their mobile devices. I think 5G can make it more realistic for those kinds of personalized curated experiences to be delivered via other media as well such as digital signage screens, kiosks, and then through mobile or tablets and augmented or virtual reality. I think it just makes it more real. You know, providing really amazing experiences for customers, while they’re in the store that are interactive, that take into account their data on the web, what they like, what they’ve been shopping for, I think 5G makes that closer to a reality, if that makes sense.

Melinda: And in China, it’s been rolled out in some areas, and people are really embracing it. In Switzerland, where they’ve started rolling out, there have been a lot of protests about health concerns. And here in North America, there’s of course all this anxiety over Huawei and how 5G could potentially be used as a tool for espionage. How do you think consumers are going to respond here in North America as it rolls out?

Christopher: Honestly, I think consumers and customers are going to eat it up. You know, there are always going to be people complaining about cell tower emissions. I mean, that’s happened before 5G. I haven’t done deep-dive research into the health effects of 5G or if there are any, but I would presume that most of that stuff has been pretty thoroughly vetted before it gets rolled out. And irrespective of that, I just know that the way consumers react to new technologies is pretty consistent. If it helps them, they’re going to use it.

Melinda: Right.

Christopher: You know, faster experiences on their phones, faster experiences on screens. I just think that if that’s what happens, then people are going to embrace it. I was talking to somebody recently who was talking about how they’re not on Facebook and social media because of privacy concerns. And I get that, believe me, but he was also wearing a Fitbit. So, I think that in a nutshell, is sort of what I think of as a microcosm of how we look at technologies, new technologies. We can be distrustful of them, but if it’s going to help us or serve our own purposes, then we’re probably going to make use of them.

Melinda: Yeah, that makes sense. Let’s talk a little bit about predictive analytics, because to date, I would say a lot of brands would tell you that it hasn’t really delivered on the promise and 5G is supposed to improve the collection and use of consumer data. Do you think that’s actually going to prove to be true?

Christopher: Do I think it will improve the collection of data? Absolutely. The use of that, I’m less certain. I mean, I think it should. I think one of the road bumps or speed bumps with using predictive analytics in a meaningful way in the store environment is partly an issue of that speed of getting the data to and from, and the bandwidth. But I think some of it is also on the other end. I think we still are going to need some more processing power and speed on the other end of the equation to really reach that apex of predictive analytics and real-time experiences.

You know, Amazon, Bezos has a quantum computer. I mean, I think when the computer processing speeds really get maybe another generation or two faster–and that could happen next month or next year or later this year–I think that’s the other part of the equation. It’s going to have to maybe speed up just a little bit more because imagine if you’re The Gap, for instance, and you’ve got hundreds of retail locations across the country. And you’ve got distributed networks powering your processes in your stores, but somebody shopping in Dubuque, you know, how fast are you going to be able to make use of that data that you have in the cloud and feed it back to them? So, I think it’s almost there. But I don’t know, do you think that makes sense?

Melinda: Yeah, I wonder what you think about the imagination, the human imagination that goes into it as well because I think maybe one of the questions that I would have is on the use as well. That if you collect all this data, then you have to have imaginative ideas about how you’re going to use it, not just sort of feedback information to somebody about what they’ve already searched or what they’ve already looked at. But maybe think about, if they’ve already looked at that, here’s something that they might like that’s different, that they hadn’t considered. And I think there seems to be a little bit of a lack of imagination in my own personal experience.

Christopher: I would agree with that 100 percent. I think that as great as the technology is, any of these technologies, that creativity, that spark, that ability to use it in a way that isn’t just for technology’s sake, but for a creative use and creating engagement and experiences that customers can’t have while they’re shopping online, I think that’s really the secret sauce of all of this if that makes sense.

Melinda: Yeah, absolutely. Okay, I’m going to move to my second thing on the list, which is related to 5G, and that’s the internet of things (IoT) and smart equipment. The other promise of 5G is that when it arrives, the internet of things is suddenly going to be activated and change our lives. What are the promises that tech companies are making about IoT and 5G?

Christopher: I think it’s what you just said. I think they’re saying it’s going to change our lives, it’s going to change our daily existence. And I think maybe they’re right. I mean, I don’t know that it’s fully going to be realized that quickly, but in non-obvious ways is kind of when these technologies are at their best, isn’t it? I mean, if you think about the iPhone, obviously that had very obvious changes to our daily lives. But the other ways that it has impacted our daily lives have been life-changing, but they’ve been maybe more subtle or less noticeable because they just blend into our daily lives. And so, not to jump too far ahead, but I mean, I think that they’re right. They’re going to be changing our lives. If you think about being able to have this IoT ecosystem where your refrigerator and your Fitbit and your phone and the sensors in the store are all kind of talking to each other and your data is kind of following you around in your daily life, I mean, I think that we can’t even imagine the ways that that’s going to change things.

Melinda: If we think about retail specifically, are there any types of smart equipment that you think are more interesting in that environment?

Christopher: I would say retail, in a way. So the most amazing examples I’ve seen of this so far have been Disney and Carnival Cruise Lines, actually. And they both were spearheaded by the same guy, a guy named John Padgett, who’s now the Chief Experience and Innovation Officer over at Carnival. And he sort of spearheaded the Disney FastPass+ and helped with the Magic Band. And then, now at Carnival, they have these medallion things that they send to their guests on some of their ships. And these environments are loaded with IoT sensors and edge computers. And they create not just in retail, but in retail and in hospitality and food service the set of metadata that follows you around while you’re in their built environment. And so, I know that’s not specifically retail, but I think when that gets more fully realized and translated into retail is when we’re going to see maybe the promise of IoT really go nuts.

Melinda: What about IoT potentially going sideways? I’m thinking like a “Black Mirror” episode where IoT goes horribly wrong. Do you have any sort of sense that that could happen?

Christopher: Oh, yeah. I mean, we’ve become so inured to data breaches these days. Everybody is having data breaches. Every couple of months, there’s a new one it seems like. And IoT is basically data. It’s all data that’s following you around, and it’s all about you. And I think there are lots of ways that could go sideways if the security isn’t right. And so, having that kind of data available about people only increases their vulnerability to attack. So yeah, I think that there are some pretty frightening ways it could go sideways, to be honest, both in terms of malevolent entities trying to just steal people’s data and use it to manipulate elections, for instance, or, you know, just a stalker trying to use it to follow somebody. Not to get too far down the “Black Mirror” episode, but that’s one of the other ways it could go sideways. I guess I’m trying to say is that there’s a real potential for consumer backlash.

And so, this is another one of those instances where technology and people deploying technology have to be really careful to walk that tightrope line between cool and creepy. You don’t want to come off as being too intrusive or creepy. You know, if people think your Alexa is listening into your conversations and then providing information to the retailer down the block so that something you just talked about at home to your wife or husband, and you go to the store, and you haven’t searched for it online, you haven’t done any actual data entry other than talking about it to somebody, but then you walk into a store and somebody’s offering you that thing, and I’m not saying that’s going to happen, but that’s sort of the nightmare of really stepping fully over that line between cool and creepy.

Melinda: Yeah, for sure. So, speaking of cool and creepy, my third topic is biometrics. I mean, if we’re talking about security of data, there is the idea that biometric information would be more secure, and people have adopted using their thumbprint to unlock a computer or a mobile device pretty comfortably. But then we start talking about facial recognition, people do have a strong reaction to that. Why do you think brands might want to use this technology?

Christopher: Well, I think for two big reasons I could see why brands would really want to push this technology, and they’re both really valid. One, I mean, biometrics and being able to use facial recognition could really create this sort of sense of intimacy and engagement with and knowledge of their customers. You know, being able to actually have this kind of facial recognition and then feedback answers or responses to that person based on who they are because you have recognized their face, you can create better experiences, and then you’re going to increase your incomes. But two, I think the big one is to increase security and reduce the instances of fraud and fraud losses. I mean, being able to put a face to somebody and make sure it’s actually the person that’s supposed to be buying anything is going to just make it a little bit harder for people to scam with their credit cards or what have you. So, I definitely think the security and reduction of fraud and theft basically is a big impetus for brands, and I get it.

Melinda: Well, do you think that North American consumers are going to see that as a fair trade-off? You know, is that enough for them? Is that enough for us to say, “Yeah, I’ll let you have a scan of my face or a scan of my iris or my thumbprint in exchange for this little bit of extra security or this little bit of extra intimacy?” I can understand from the brand perspective, but I’m wondering from a consumer perspective.

Christopher: This might seem to contradict my earlier answer about how people will adopt any technology if it’s useful enough, but I’m not sure about this one. I think it could go either way. You know, there’s a blog on kioskmarketplace.com recently about it and how it has been picking up in Asia. So, maybe. But I just think that the facial recognition at these points might just be a bridge too far for a lot of consumers, maybe for Gen Z and younger. But I think I can see people having a visceral reaction and maybe leaning toward rejection of this idea that, you know, these brands are going to have our faces and be able to spot us when we walk in the store. I think, at this time in our history, there’s just so many concerns about the state, brands, and people having too much information about us already, but I can see there being some pushback against it. But in the long run, I mean, if you can speed up transaction times and if harried and hurried shoppers are at the mall or, you know, the Best Buy or IKEA, and the lines are long, and it’s holiday shopping, and if people could just scan their face and go, I mean, that might be what pushes us toward it. But I just think it might be a slow adoption of ethics.

Melinda: Right. And I mean, there’s technology like the Amazon Go technology that might just make it irrelevant. If you can just walk in with your phone and your app just automatically pays for whatever you pick up, then you don’t necessarily need facial recognition.

Christopher: Exactly, there have been other technologies that have been similar. You know, they seem like good ideas, but if something else is just as easy or easier and doesn’t raise those concerns, then people might tend to go toward that route.

Melinda: The fourth thing that I want to talk about is finding solutions to the unintended consequences of new technologies. And the one I want to start with is the delivery services and how they’ve been enormously successful. People love having stuff delivered to their house, but it’s made traffic so much worse, especially in dense cities like New York. And so, in response, some brands are trying different things. Amazon is rolling out Amazon Scout, which is this little robot that’s about the size of a shopping cart that drives itself along the sidewalk and delivers things to people, and that’s being tested. And at the same time, in New York City, these cargo bikes that if you kind of imagine a rickshaw but instead of carrying people around, they’re carrying packages, are being used by UPS in big city centers. So what do you think? Are the bikes going to win or are the bots going to win?

Christopher: As a biker myself, I hate to say it, but the bots are gonna win.

Melinda: Do you think so?

Christopher: I feel eventually they’re going to win out. I mean, they don’t get tired. And as prices come down and as technology improves and iterates, they’re going to be cheaper in the long run. As much as I love the idea of bike messengers delivering stuff, I just think bots and self-driving cars and other things are going to be the way of the future. And so, to me, one of the interesting unintended consequences of all of this is how it is going to affect the people. I love self-service. I love technology, but I still like to have a person in the store that I can go to if there’s a problem. And so, I do think that these technologies are going to free up the people to be more curators or concierges of experience in the brick and mortar environment. So, I know that’s not specifically talking about delivery, but I do think the unintended consequences are going to be interesting to watch out for.

Melinda: Do you think that there is a bit of tech fatigue?

Christopher: I don’t know that there’s tech fatigue. I think that there’s bad tech fatigue. And, you know, there could be backlash against it costing people jobs. And that’s why I say that I don’t think that the in-store rep should go away entirely. I do think there should be in-store representation because of when things do go wrong or for those people who do want that personalized experience with a human being. I’m not frequently that person. I do frequently want, like, low contact or no contact. But I would say, again, tech isn’t the answer for every situation. So, I would say maybe people are getting injudicious tech fatigue if that makes sense. If tech is being used injudiciously, then yeah, people are going to get tired of it. It should be part of the experience continuum. But at the same time, I do think there is always going to be a niche for low tech or no tech.

Again, I live in Santa Fe. It’s a rustic, artsy sensibility town, and so, there are a lot of high-end boutiques here. In a lot of those places, tech would have to be used judiciously, if at all. You know, in New York or San Francisco, that’s a different story. I think those are much more tech-forward towns. And so, the expectation is that tech will be in a ubiquitous part of the experience when you’re out. But in certain places, you know, if you’re going to Jackson Hole, Wyoming, you might want less tech.

Melinda: So, the last thing that I want to talk about in our five topics is augmented and virtual reality. And I want to start with VR because there’s been a lot of road bumps with this technology. And I just wonder, do you think that this actually has an application beyond video gaming?

Christopher: I am not actually a huge fan of virtual reality in brick and mortar, to be perfectly honest. Now, I have seen some really great pop-ups using VR and some great experiences using VR. You know, McDonald’s did something with NASCAR not too long ago where people put on goggles and used a paddle to be part of the pit crew on as part of a virtual reality NASCAR racetrack. And I thought that was really cool. But shopping in person in the brick and mortar world is a communal activity really. You go there with your friends or, you know, your kids. But VR is really…it’s communal, but it’s only communal with other people who are also in that virtual world. Maybe once we’re all wearing virtual reality, augmented reality goggles around all the time, but right now, I’m just not sure I see a ton of really great VR possibilities in brick and mortar. Maybe, like, if you’re wanting to try a bike, and you put on some goggles, and you can be on a Gimbal and go test-ride your bicycle or your motorcycle, maybe something like that. But I haven’t seen a lot of great uses personally.

Melinda: Well, let’s talk about augmented reality because there might be a few more options there. It’s first big newsworthy hit was also a game, that’s Pokemon Go. But since then, there have been some other interesting applications of AR in the retail space. Do you have an example of something you’ve seen that you think is really an interesting use of AR?

Christopher: Well, and on this one, I would it’s say a complete 180 from my feelings on VR. I really like AR in the retail space. I’ve seen some really interesting deployments of it. Walmart did a really cool thing with a “Jurassic Park” tie-in, where people could be out in public but also, they were using Walmarts as like supply drops where people would go in and pick up supplies for this “Jurassic Park” game in the Walmart. Tilly’s has done stuff with it. I think Magic Mirrors at the cosmetics counter has done some good stuff. Under Armour, one of our members, has done some really interesting stuff with using AR. They did a deployment where it was like golfing with Justin Fowler and comparing your stroke to his. And I do think there can be, both in the brick and mortar and in the pop-up space, some really interesting use cases.

LG did some fun stuff at the Final Four a couple of years ago, because I think it does create this fun experience, and it’s interactive. You know, it can either be on the screen or it could be on your phone or on a larger screen. And I just think that there are a lot of really interesting applications. Like, the Magic Mirrors and Sephora, if you want to try on different makeups and see how they look on your face or, you know, in a hair salon, and you want to see how your hair is going to get cut. I could see some really cool uses for that.

Melinda: Yeah, absolutely. So, is there anything that you know of that’s happening this year? Any new store opening that’s using technology in an innovative way or a new experience or a new tech that’s coming up that you’re really excited about?

Christopher: I think that there’s going to be some really interesting stuff. With those five that we talked about, I think there’s also some room for AI and voice-activated technologies. I think there’s going to be some really interesting stuff with rollouts of new experiences to stores where you are going to see that increased bandwidth from 5G coming into play. So, without naming anybody in particular, yeah, I think the way these technologies are going to come together is going to be really interesting this year.

Melinda: Thanks again to ICXA and Christopher for sharing his thoughts with us today. We’ve spoken to a lot of people with different areas of expertise and different perspectives about tech in the retail environment. And although not everyone agrees, there does seem to be a common thought that Christopher reiterated, which is that injudicious use of technology is problematic. While experimentation is definitely part of the process, technology is just a tool. It’s what you use it for, specifically to enhance the customer experience, that’s going to make it a win.

So, I’m just going to go over his hits and misses. Christopher thinks 5G is going to be an instant hit, IoT is going to be a slow burn, and in North America, there’s going to be resistance to facial recognition based on the strong objection, especially in the U.S, to giving away personal autonomy. He’s not in love with VR, but he’s a big fan of AR, and he thinks that bots are going to beat bikes in the delivery world.

And he also mentioned a number of times that we should not eliminate the frontline roles in stores. Brands are battling with this because, in many categories, there is a hope that tech is going to reduce staffing costs. And I guess we’re just going to have to see if brands with more humans on the front line do better than those without. I hope you’ve enjoyed our conversation today, and we’ll be linking to the ICXA website in the podcast description in case you’d like to find out more. Thanks for listening.

About

Christopher Hall is the Managing Director of the Interactive Customer Experience Association (ICXA). The Interactive Customer Experience Association aims to connect B2C brands to the technology that elevates the customer experience.
Think Retail is a podcast where top designers, strategists, thought leaders and business people discuss what’s coming next. For more information, email info@sld.com.