Not to be distributed without permission.CONNECT WITH US © 2018 Euromonitor International Commerce 2040 Revolutionary Tech Will Boost Consumer Engagement Michelle Evans Global Head of Digital Consumer Research An extract from the full report Commerce 2040: Revolutionary Tech Will Boost Consumer Engagement © Euromonitor International Contents 1 Introduction 2 Entertainment Venue Social media disperses power from brands to individuals Up-and-coming consumers crave more unique experiences New concepts that could take shape in the venue of the future Key features in the entertainment venue of the future 5 Home This hub for family life serves as a sanctuary for many people An automated home appeals to consumer desire to simplify life Connected home leads to the uptake of passive consumption Key features in the home of the future Emerging concepts in the future home by 2040 9 Retail Store Uptake of connectivity is changing competitive realities Consumers shop in outlets when wanting to see or try something Consumers demonstrate an increasing need to experience more How the retail “store” of tomorrow will likely evolve Key features in areas of the retail store in the future 13 Conclusion 14 About the Author 15 How Can Euromonitor International Help?© Euromonitor International Change. That single word can inspire delight and dread all in the same breath. Societal shifts are often driven by a handful of factors, such as new population patterns or evolving consumer values. Technology, in particular, emerged as one of the key drivers in the last decade reshaping the world and will likely continue as one of the most important factors creating future upheavals. Fast forward 20 years and the world, and commerce conducted within it will be noticeably different than today. Imagine a consumer walking down a neighbourhood corridor in 2040. By then, the neighbourhood of old with its mixture of commercial, residential, entertainment, transportation and work elements might be in vogue againall with a tech infusion. More residents will work from home or do so from neighbourhood co-working spaces. As such, transportation needs and patterns will evolve with fewer consumers commuting on a daily basis. Consumers will reach much of what they need on a daily basis by foot, but there will be public transportation pods connecting cities, regions and nations on the same system for consumers wanting to travel further, especially in their downtime. For the on-the-go consumers, bots will craft individualised experiences. Needing recommendations or directions? A concierge bot could give input through an implanted earbud. Restaurants might have smart menu boards personalised to each passerby. The entry of the restaurant will evolve with one dedicated to dine-in occasions and the other to delivery. Convenience stores will likely be the only outlets with inventory. Former retail outlets will shift into micro experiential centres, helping consumers discover and test products for later drone delivery to the home or designated neighbourhood spots. The lines between real and virtual will increasingly blur as consumers routinely layer virtual over reality, gaining more information or engaging in gamification opportunities for rewards or fun. This white paper outlines a vision for how consumers might live, work, shop and play in 2040, exploring how technology could change different consumer worlds over the next 20 years. In particular, this analysis will focus on the future of commerceboth in terms of how commerce, as it is known today, might evolve over the next two decades and what new commerce avenues could emerge by 2040. Introduction© Euromonitor International Numerous factors are converging to revolutionise the way entertainment is consumed. As a result of widespread connectivity and social media, sports and music fans can get closer to the action without ever stepping foot into a venue. At the same time, consumer values are shifting towards experiences, a trend standing to benefit those in the entertainment industry. The challenge will be delivering a differentiated experience keeping fans engaged and coming back to the venue event after event. Undoubtedly technology plays a starring role in shaping the entertainment venues of 2040 and in turn what new commerce opportunities will unfold within this future world. Social media disperses power from brands to individuals Platforms facilitating interactivity and the sharing of user-generated content globally created the “second screen” or “second screen experience,” allowing fans to partake in the experience unfolding in the venue from anywhere. Social media helps elevate a fan to more than just a face in the crowd. Just like traditional commerce, entertainment brands no longer have sole control over the information about their offerings. Fans are better informed when entering an interaction and leverage social media to vocalise their experience. Widespread connectivity has significantly dispersed authority to social groups, putting fans on a more equal footing with entertainment brands. Up-and-coming consumers crave more unique experiences Consumer expenditure on experiences is set to rise from USD 5.8 trillion in 2016 to USD 8.0 trillion in 2030, using leisure, recreation, travel and foodservice as a proxy. Advanced economy consumers are true experience-seekers, spending 16% of their income on that aim; higher than emerging regions at 10%. Society is moving away from being about the masses to a “story of one”. Consumers expect a personalised experience available across the multitude of screens in their lives. Entertainment Venue 87% of connected consumers report buying tickets for leisure and entertainment activities Source: Euromonitor International Source: Euromonitor International EntErtainmEnt VEnuE 3 © Euromonitor International New concepts that could take shape in the venue of the future Virtual currency Loyalty is less prevalent in the entertainment industry than retail, payments or travel. The future provides opportunities for entertainment operators to develop a virtual currency scheme where fans earn points for attending events, spending at the venue and promoting fandom on social media. In turn, fans leveraging these points wager on sporting events to buy equipment for their avatar, receive a boost in a related mobile game or used as a currency for on-site food, drink and merchandise purchases. Entertainment view from above Immersive tech both outside and inside the venue will enable fans to see the world through their idols eyes with the fan being able to virtually take the game-winning shot or sing their idols hit song to thousands. Source: Euromonitor International 4 EntErtainmEnt VEnuE © Euromonitor International Optimised seating The integration of technology like machine learning, which can comb mounds of available data to make decisions, will revolutionise seat selection for events. For example, a fan shopping for tickets from home can enter in their preferences for the event. Fans with young children could sit with other families. Singles ready to mingle could sit with other singles. These new technologies provide options to select seats not only based on proximity to the action but who is seated next to them. Key features in the entertainment venue of the future Live entertainment is shifting from in-seat to choose-your-own-adventure experience. Technology enables a more personalised experience. However, a delicate balance must be maintained. How can operators remove the logistical headaches of attending events while not distracting from the action? Beyond that, the challenge for future operators will be curating an experience that excites fans on their third visit as much as it did their first. Get it wrong and fans will share their complaints immediately on social media platforms, resulting in reduced attendance and spend. Overview Multipurpose venues will extend the potential event schedule Free-to-access areas will expand the potential fan base From home Fans will leverage VR headsets to obtain a realistic view of their seat Personalised highlights will enable fans to relive their experiences Entry Season ticket holders will be able to register for biometric entry Facial scanning will identify fans, thus enabling tailored alerts Concourse Fans will have multiple dining options that appeal to their needs Social media worthy locations will make the experience exportable Seats Food and drink delivery will be an option for stationary fans AR capabilities will provide new layers of information on players like current performance stats, as well as gamification options pre order food who do you want to sit with? seat view© Euromonitor International Ubiquitous connectivity gives way to the intelligent interaction of humans and things. The home will be one consumer-facing environment most impacted by the arrival of the Internet of Things era. The smart home momentum is picking up due to widespread connectivity, manufacturers pushing to sell connected durables and more compelling consumer use cases. By 2040, consumers will have access to more services, including commerce ones. Despite the promise this new world has provided, the smart home market has been awaiting its breakout moment. By 2040, connected appliances will be mainstream, especially in developed markets. Appliances across all price points will be connected as major manufacturers including Bosch, Samsung and Whirlpool announced all of their products will be connected by 2020. In order to fully realise the commercial opportunity, the next stage of development requires the industry to connect the value of these tech developments to consumer needs. Home welcome home. the lawn needs fertiliser. should i purchase for $75? Home exterior Upon arriving to the home, biometrics will be leveraged to confirm the visitors identify and unlock the door for authorised individuals. Goods awaiting at a nearby neighborhood warehouse will be delivered via drone once the home is occupied in an effort to reduce e-commerce theft. Source: Euromonitor International 65% of households expected to have access to broadband internet in 2030, an increase from 47.5% in 2018 Source: Euromonitor International 6 HomE © Euromonitor International services. The desire for simplicity is an opportunity for both the goods and services sectors to provide a light-weight experience for their customers. Technology integrated into the home will enable consumers to meet those needs. Connected home leads to the uptake of passive consumption Consumption is on the cusp of transitioning from being active to passive. Some commerce sectors will become almost entirely automated in the future home, giving way to machine-aided commerce. Goods, such as home care products, require continuous replenishment, creating an opportunity to automate the ordering process. A number of challenges will slow this transition to passive consumption, including connectivity quality, consumer privacy concerns and long replacement cycles of durable goods. Key features in the home of the future The home of the future will be even more personalised than it is today. The home will identify each occupant upon entry into the home itself, as well as each room. Technology will help educate and empower consumers to take control, as well as provide personalised digital solutions for health tracking. Connected mirrors will assist each member with their dress for the day ahead, offering suggestions to complete the desired look. This hub for family life serves as a sanctuary for many people While the view of the home is shifting due to urbanisation and a rise of singletons, it remains the place most associated with family and acts as a sanctuary. Consumers are finding fewer reasons to leave their homes as consumption evolves. In the future, many more aspects of out-of-home life could be brought into the home due to digitalisation. Businesses are dedicated to delivering all types of products and services to consumers with just a tap of a button. The value of foodservice orders placed online has doubled in the last five years appealing to time-starved consumers. There is also an ever-growing abundance of entertainment options at home, with on-demand services such as Netflix and Amazon Video. As augmented reality and virtual reality technology evolves, its connection between perception and reality is expected to enhance the at-home shopping and entertainment experiences even further. An automated home appeals to consumer desire to simplify life Todays consumers are redefining their values and priorities. In this fast-paced world, consumers are looking to buy more time in order to reduce stress. Even more prominent is their desire to simplify life. Two-thirds of connected consumers globally value it. Simplicity is an antidote to consumerism, endless choice and constantly updated products and HomE 7 © Euromonitor International Front door Biometrics will confirm the visitors identity and unlock the door Pre-configured profiles will automatically adjust lighting, room temperature and music choice for each family member Living room VR headsets will enable consumers to more closely mimic the senses associated with the in-person shopping experience The on-demand lifestyle will take hold here as residents can start entertainment, order food and book travel with simply their voice Kitchen The kitchen will serve as the hub for healthy living by monitoring food intake and suggesting better alternatives based on the individual and the day Connected appliances will monitor consumption and automatically order replenishment items, such as detergent Bedroom A connected mirror will serve as a personal stylist, purchase channel and social sharing tool A virtual personal stylist will give recommendations to the resident based on current wardrobe, weather and activities for the day Brands will be able to suggest accessories to finish the look or enable consumers to try on a different shade of makeup virtually now low on reordered reordered reordered settings energy temp security now choosing: apple this is 10% of your daily fruit requirement your pizza ingredients have arrived. KItchen of the future Interfaces in areas of the home regularly monitor the households energy, temperature and security. The humans themselves can be more easily monitored as well, thanks to the integration of healthy living platforms into the wired home. Source: Euromonitor International 8 HomE © Euromonitor International Emerging concepts in the future home by 2040 Command centre The connected home of the future will become the command centre of consumer life. The central