How content is changing the retail of the future
A look into the year 2030 - how we will store.
A look into the year 2030 - how we will store.
Dear readers,
It's always so easy to say: we, society, the economy, retail - we are all becoming more and more digitalized. But what exactly does that mean, for example in terms of our shopping behavior? We are increasingly shopping via online stores, platforms and social media channels, sometimes directly via influencers who turn us from followers into consumers.
Our behavior is changing retail, but retail is also changing us: we are making new - higher! - demands in terms of availability, sustainability and product quality. In the past, there was often a lack of opportunities to make such demands - and to reliably assess the conditions under which all products were manufactured and how they were shipped around the world. Today, we have access to such information via the internet and social media, and this has made us more demanding: we want to be informed and receive individual support! Retailers have understood this - at least in part - and cater to us with an individual approach and offers tailored precisely to our needs.
Because they know us - not personally, but that's not necessary. They know us as personas, as ideal-typical consumers whose behavior is predictable. That makes us predictable. Our desires can be satisfied more or less individually. This is possible because we continuously produce large amounts of data as we roam the internet and social media. But when it comes to the development of digital commerce, we are, if not at the beginning, at least on the brink of a major leap: even more intelligently used data, increasing virtualization via VR and AR glasses that give us access to the metaverse, in which digital and physical worlds will merge into hybrid worlds - all of this will shape the commerce of the future.
As a location initiative for the media and digital industry, nextMedia.Hamburg always takes a close look at content and its creators. This is also the case here.
Content plays a key role in the development of retail: Consumers want to know what they should buy. They expect an individual and channel-specific approach. This task is giving rise to a new business model for the content industry, which has to produce individual content - text, images, videos and interactive elements - along the entire hybrid value chain. In order to understand the growing importance of content and adapt to it as a content-producing industry, we have created this white paper as part of our Content Foresight program.
In it, we take a scenic look into the year 2030, i.e. far into the future. As with all predictions, this is less about predicting the future with stylistic certainty and more about extrapolating current technologies and trends so that providers and consumers can adapt and prepare for them today.
With the Content Foresight programme, we work together with Hamburg-based companies and organizations at the interface of content and commerce to find answers to questions about the future.
To do this, we use the foresight method developed in accordance with scientific standards. It offers us an approach to systematically identify innovation potential in the long term and support its realization. We use frameworks such as STEEP or PESTLE to identify social, technical, economic, ecological, legal and political trends. Once we have understood the trends, we analyze them in terms of their potential influences and effects.
Finally, we use this analysis to develop scenarios in which we place developments and trends in realistic environments. In this way, we gradually build a world in which future solution spaces are created.
In this way, the participants in Content Foresight and now you, as readers of this paper, can immerse yourselves a little in the future world, position yourselves in it - for example as consumers - and form your own opinion. As traders or content producers, you can examine your business models to see how future-proof they are and where there is still room for improvement.
of 30- to 39-year-olds buy products on the recommendation of influencers every month
prefer to buy goods offline
would disclose data in order to be supported by an AI when shopping online
want to be able to shop online with VR glasses
of 30- to 39-year-olds would like to be able to shop online a stronger connection between the virtual and real world when shopping online
Civey survey, December 2022, 2,500 respondents
Content available at any time, data-driven shopping experiences and seamless transitions between digital and physical worlds, smart devices and the store on the corner - retail in the coming decade will be characterized by innovative technologies, changing social conditions and new business models.
Leon and Mia are part of this new world. Born in the first decade of the 21st century, they belong to a generation that has already grown up with a wide range of very different social media platforms, got to know a wide variety of content channels as children and experienced over the years how digital devices are finding their place in more and more areas of life.
When they were both in sixth and seventh grade, the coronavirus pandemic accelerated the development of hybrid living and working environments. At the same time, competition for the provision of content continued to intensify in a world in which analog shop windows were becoming less important. In the world of Mia and Leon, in the world of 2030, e-grocery has a market share of 15 percent. Overall, online now accounts for more than 21% of sales in the entire German retail sector and has almost doubled compared to 2020.
Leon and Mia have been friends for many years. A high degree of automation determines their everyday lives - as does the content that reaches them in a variety of ways. After all, digital services of all kinds - accompanied and moderated by corresponding content - are the norm in a society whose ageing population has accelerated in recent years, whose working population has continued to shrink and which will be more diverse and varied in 2030 than ever before.
The two scenarios in this white paper accompany Leon and Mia in their everyday lives, giving us the opportunity to look over the shoulders of two protagonists of the year 2030 and thus into the future of content and commerce.
Mia is a creator. In fact, she's been one for most of her life. But today she does exactly that for a living. The creator economy has been the most important industry in Germany for a few years now. When Mia was at school, YouTube creators were already opening entire restaurant chains overnight and successfully launching their own product series. Nevertheless, a Civey survey in 2022 found that just 2.1% of consumers surveyed buy products once or more a year based on recommendations from social media influencers. Even then, the 30 to 39-year-olds - or rather Mia's parents - clearly stood out. In their age group, the proportion of social influencer shoppers was 6.2%.
"Today, this survey would probably come to a completely different conclusion," Mia thinks to herself as she checks the holographic, AI-supported message from her friend Leon via her data glasses. 'Influencers,' Mia groans, annoyed. Only the generations of her parents and grandparents still talk about them anyway. Today, there are only creators like her - and they use their content to influence the sales decisions of millions.
Mia cooperates with brands and is her own brand MiaY. She licenses her content and at the same time uses her knowledge of her community's preferences. Thanks to the success of her content, Mia knows exactly what buyers want, what products and solutions they need and what they are willing to pay for. And together with third parties, she develops these and makes them available.
Mia is on the move as a creator in various super apps. As a combination of content stream, marketplace and payment system, they have largely replaced the traditional internet and combine social media with digital playout channels such as television or radio. No one surfs different sites online any more, but generally only moves within the respective super app, which offers a variety of mini applications and thus invites users to store, chat and consume a wide range of media. The large, former monopolies of individual Internet platforms are history. Those that have survived are monetizing their past data as tech service providers in order to be able to offer ever more powerful AI models for content production.
The further development of AI in recent years has ensured that the production of new content is now basically open to everyone. AI can create texts, images, videos or even music.
The amount of content has exploded in the course of this development - and has fundamentally changed the demands of consumers and creators. The instant generation that has grown up as a result is used to high-quality content - tailored to individual needs and preferences - being available in large quantities at any time, across the boundaries of a wide variety of devices.
In 2022, the OpenAI organization in particular attracted media attention with its AI solutions. In April, OpenAI presented DALL-E 2.0 - a solution that uses machine learning to create images. This was followed in December by the ChatGPT application, which uses machine learning and natural language processing to create conversations.
Mia once explained her job to her family as follows: "In a world where AI takes over content creation, you need people to give the AI direction and select from the results. "A sommelier chooses the best wine, I choose the best content," she says. In fact, her task is much more far-reaching. Creating visibility for her content is the real challenge in a confusing content landscape. In the content age, relevance filters have long acted as automated digital gatekeepers on all channels. So how do you develop content that works seamlessly and link it to products that are highly relevant to the target group? This is one of the key questions that Mia has to deal with on a regular basis - as well as the question of costs.
The provision of various AI models and tools for the content creator scene has long since become a fully-fledged business sector in its own right. Licensing and subscription models as well as revenue shares ensure that the operators of the respective AIs receive ongoing income and share in the success of the creator economy.
Mia uses a variety of different AIs and combines them for her content - if only to prevent duplicates. In the past, she herself had to experience several times that other creators had identical content on offer because they simply used the same AI as she did.
The rights to the content always lie solely with the creator. But what to do if the content is almost identical? There is still no definitive answer to this question. At an international level, the right to one's own content is the subject of just as much controversy as data protection. While Europe once led the way with the GDPR, numerous other countries and regions have now formulated their own alternatives, meaning that the global debate about who should have access to which data is more intense than ever before. Due to their sheer population size and the training data available as a result, Asian countries such as China and India have made particularly great progress in the development of content AI, which is not readily available to Mia.
What many content formats have in common is that they utilize the possibilities of augmented and virtual reality. Companies that invested in the right production technologies at an early stage can now position themselves particularly successfully in this area together with content creators. For these companies, it was not just a matter of setting up the appropriate infrastructure, but also, for example, providing human resources, i.e. IT experts who are intensively involved with the possibilities of AR/VR for their own business model. A fashion label without IT experts and a creator department that provides individualized content for buyers? Mia finds it hard to imagine that such companies can still survive these days.
Content creation is now an integral part of Mia's everyday life. An AI constantly checks her messenger - if messages are relevant, she receives a brief notification. If content can be created from the content of the message, the AI sends initial suggestions straight away. Mia decides, refines and selects. Every day, around the clock - as part of the creator economy.
Leon has planned an extensive shopping trip for today. His girlfriend Mia doesn't have time, she has to take care of her creator business. Afterwards, they have a date for an evening of streaming together - no problem, as they are both at home.
Leon wears rimless glasses, which have long since replaced the crowded pedestrian zone that the early 20-year-old hasn't been going to for a long time. And even better: instead of only ever being able to visit the same ten brand stores, which in the past often characterized the image of every halfway larger city, Leon can now fall back on a colorful hodgepodge of shopping opportunities - from the upscale boutique to the clothing discounter to the owner-managed collection of knick-knacks and handicrafts.
Leon's networked glasses, which now look more like designer models from well-known suppliers than the clunky frames of the 2020s, can display any shopping environment via hologram. He can also move around as if he were there. For every retail product he sees on his tours, he can request additional information about the products, ingredients, sustainability or manufacturing conditions. They can call up this information with a simple finger gesture or voice command.
Despite the holograms and avatars, Leon never loses visual, auditory and sensory contact with his direct environment. This is important to him, and not just so that he doesn't run his little toe into the nearest table leg, but because it allows him to seamlessly connect the virtual and real worlds and be responsive in both. For example, he can stand in front of the mirror with a new hat and see if - and how - it suits him. Or he can pick up the new pen as a hologram and use it to write on a blank sheet that is not made of paper, but of an adaptive material that converts his input directly into data. If we were to ask Leon what it's called where he is, he would shrug his shoulders: "Reality, perhaps?" The term metaverse, under which we discussed this scenario ten years ago, has not caught on - probably also because nobody really wanted to imagine shopping in virtual environments. At least that's what a Civey survey from 2022 showed. Back then, three out of four people said they would never go shopping with VR glasses. And six out of ten respondents at the time refused to merge the virtual and real worlds.
But back then, they didn't know how seamless it really was. Basically, Leon's main concern is that he can use modern technologies - glasses, voice control, holograms and avatars - to enjoy a truly sensory and personalized shopping experience - or at least what he thinks it is. Because in reality, even in 2030, stores will not be able to respond to every single customer request individually. They work with a vast amount of data, which is less individual than prototypical: Men aged between 30 and 35, for example, i.e. after their studies or vocational training, in their first or second well-paid job. Family planning is an issue, but not one that has already been resolved. These are men like Leon's cousin, for example - this category knowledge is enough to be able to make them individually tailored offers. And that doesn't mean that Leon's cousin will only come across things he likes on his shopping trip that may differ significantly from what Leon sees; even in 2030, there will still be blurs and surprises, but that's not a coincidence or a mistake, it's part of the experience. The physical and virtual worlds are maximally connected. The classic shopping malls will continue to exist. Many brick-and-mortar stores use the possibilities of AR and VR technologies to inspire customers or create specific added value - for example, when trying on jewelry, cosmetics or clothing. Some furniture stores are now even going one step further and displaying white furniture as projection screens in their stores, which are played with highly individual AR and VR designs.
Speaking of which: if Leon wants, he can also order his shopping tour as an adventure, because it's not just physical and virtual worlds that have grown together, but also seriousness and play, if you want to compare the two. In any case, "Adventure Shopping" promises a lot of fun when it comes to fighting your way through the crowd of zombies. Is this the brave new world that was promised back in the 2020s? Back then, it was all about customer proximity, experiences and sustainability. Can the new shopping world actually deliver on these promises?
Leon makes a big deal about customer proximity and experiences: "Of course, because how else can I travel around the world without having to leave my home? How else could I find a variety of shopping experiences without much effort and all in one place!" However, he becomes pensive when he thinks about the haptic experience. The new world is still visual. Feeling, tasting and smelling have fallen by the wayside. What's more, the AR-VR design of the sofa isn't all that matters in the end. From Leon's point of view, there is still some catching up to do. When it comes to sustainability, he gets energetic: "I don't use energy to get from A to B and then to C," he says.
No raw materials have to be used for the virtual products and nobody has to slave away in factories for little money. Yes, that is sustainable!
And what about virtual worlds, how are they created, what is sustainable about them? After all, most providers have at least worked on supplying the computing power for these worlds in a much more CO2-neutral or even CO2-negative way. The proportion of renewable energies has risen to almost 80 percent to the detriment of fossil fuels and not least due to a massive expansion of photovoltaic systems in metropolitan regions - and thus remains just below the value set by the German government a decade earlier. The social standards for the production of consumer goods, which is also important to Leon, have improved considerably: suppliers and manufacturers have long been required to provide transparent proof that they pay those involved in production, transportation and trade fairly and treat them with dignity. This transparency creates competitive pressure that continuously improves social standards in production. It is precisely these things that are most important to Leon and that he always asks to be shown during his shopping trip.
He doesn't even need his glasses. Leon has a so-called whitebook, which he can leaf through comfortably on the sofa. None of the pages are printed, but simply white, which is where the name comes from. But with a simple gesture or a short voice command, he can fill the pages with information and pictures or videos of the products via holograms. It is quite possible that he will come across Mia, who produces and offers such information professionally. But it is just as conceivable that some fashion designer, one of the many TV chefs or a DIY enthusiast will provide Leon directly with tips and tricks that used to be called "life hacks". Leon has to pay for this, but it's worth it to him, because he's not buying anything he can't use. At the end of the day, it's even cheaper!
No, Leon doesn't want to go back to narrow and often very similar-looking pedestrian zones. He loves moving from the sofa into the (virtual) world, enjoying shopping as a real experience and finding out everything he wants to know. For him, it is, if not the world, then at least a world, and it is the only world he wants. His cousin, by the way, disagrees and enjoys using the many exciting applications that bricks-and-mortar retail offers him as a local customer.
From today's perspective, some of the scenarios may initially sound counterintuitive or unlikely. But if you take a closer look, there are already many approaches that (could) lead to the outlined lifeworlds of Leon and Mia.
But what does this mean for companies and creators, for content producers and, last but not least, for consumers? It is already clear that the importance of content in commerce is increasing - in all its facets. It is also clear that the importance of digital technologies will continue to increase, but that a large number of players will have to prove themselves on the market with their approaches and share the attention of users. Investments in know-how and new technologies for early positioning in the new content world are therefore an important prerequisite for retailers and content creators alike in order to survive the battle for the attention of the masses in the future and to be able to provide the required quality equally across all channels. All those involved are therefore also faced with the question of which parts of the value chain can be replaced with Creative AI in the future and how the technology can be used as profitably as possible.
The debates that will be necessary if artificial intelligence plays an increasing role in the content creation of our everyday lives in the future can already be initiated and conducted today. Data protection and data security, the use of augmented and virtual reality technologies, questions of originality and copyright - social discourse on all of these issues should be initiated at an early stage and key questions clarified conclusively so that the further development of content creation in the commerce sector is no longer held back and unique, new customer experiences can be created.
After all, we can already see the potential for misuse today. Deep fakes will play an increasingly important role. How will such content be recognized and prevented in the future? This needs to be clarified as quickly as possible. The same applies to the issue of digital identities. The protagonists in our scenarios will also need to be able to identify themselves beyond doubt in new, intelligent ways in their everyday digital world.
We should seek answers to all these questions, hold the associated debates and set the course for the future. We can help shape the content world that awaits us in ten years' time in the here and now. We should seize the opportunity to do so.
We are the first point of contact and innovation promoter for Hamburg's media and digital industry. Our focus is on sustainable business models at the interface between content and technology. We are part of Hamburg Kreativ Gesellschaft mbH and are supported by the City of Hamburg.
Our goal is to further expand Hamburg's leading position as a media and digital location.
The basis for the scenarios in this white paper was developed by nextMedia.Hamburg 2022 together with Carlsen Verlag, the pilot agency group, Radio Marketing Service (RMS), Stein Promotions and blish during the Content Foresight innovation program. The process was methodically supported by the foresight agency Rohrbeck Heger.