Join us for VISIONS Summit NYC  - June 11
Episode 23
February 15, 2017

Predictions for 2017, NRF Recap

The guys recap NRF and make some bold predictions for 2017

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Brian: [00:00:32] Welcome to Future Commerce, the podcast about cutting edge and next generation commerce. I'm Brian.

Phillip: [00:00:37] I'm Phillip.

Brian: [00:00:38] And we are going to be talking about NRF today. I was at NRF on the floor, Live, talking with some pretty cool companies, learning some stuff about the future of retail.

Phillip: [00:00:54] Nice.

Brian: [00:00:54] Yeah, it was. It was great. So we'll be talking about that. And then I think we've got some predictions later on the episode.

Phillip: [00:00:59] Yeah. This is a 2017 edition of Future Commerce for our prediction show. So I'm excited about that.

Brian: [00:01:05] I know. I feel a little bit like cheating because I feel like a lot of people have already kind of put out predictions stuff.

Phillip: [00:01:11] Oh well I am unsullied in that I've not listened to a single prediction episode of anybody's podcast.

Brian: [00:01:18] Yeah, that's true. I haven't lost any podcasts. Just saw a couple of little... I mean, I saw Roemmele tweeting about some stuff.

Phillip: [00:01:25] {laughter} Well, you are also a NRF. You could probably make some educated guesses for 2017.

Brian: [00:01:29] Oh, I could. And I'm really annoyed with what they're calling 2017.

Phillip: [00:01:34] But that's... Okay. But we'll get there. We'll get there.

Brian: [00:01:37] We'll get there. No, I get it. I get it.

Phillip: [00:01:39] We need you, the listener, to be engaged in our show. And so we want you to give us feedback about today's episode, in particular, if you have any predictions for 2017, the future of retail and the future of commerce in any way, shape or form, we want you to send it in. So hit us up. You can hit us up on Twitter at @CommerceFuture, not Commerce Futures, which is really sad that actually we have a Twitter account that is so dangerously close to a future of commerce conference.

Brian: [00:02:15] Event. Yeah.

Phillip: [00:02:16] Yeah, that's in England this year in early 2017. But at @CommerceFuture. Tweet us or you can hit up the show title on Click on it. Go all the way to the bottom of the page the Disqus comment box and leave with some feedback. You can also make sure that you're subscribed because we want you to never miss an episode of Future Commerce, and you can subscribe on iTunes, Google Play or listen right from your Amazon Echo on TuneIn radio with the phrase, "Alexa, Play Future Commerce podcast."

Brian: [00:02:50] It works. I use it.

Phillip: [00:02:52] It does. I do it all the time. I actually just, I'm getting deeper into the Smart Home outfitting of my house, which is a very slow going process, and I'm switching all of my WiMo devices, of which I have nine or ten. I'm switching all of those off of the WiMo wi-fi system over to a smart things hub Z-Wave compatible.

Brian: [00:03:23] Oh nice.

Phillip: [00:03:24] So that's kind of happening in my house right now. So I'm excited about that.

Brian: [00:03:28] That's awesome.

Phillip: [00:03:29] I have to guess that there probably wasn't a whole lot of home automation on display at the National Retail Federation Big Show at the Javits in January that you attended.

Brian: [00:03:43] You know, a little bit.

Phillip: [00:03:46] Yeah. It's not CES which basically butt up right against the show, actually.

Brian: [00:03:51] It did. Yes. It was interesting. Yeah, I think CES was like crazy all about that. Alexa in everything.

Phillip: [00:03:59] Yeah, sure. Yeah.

Brian: [00:04:00] Funnily enough, I did not feel like NRF really focused on that.

Phillip: [00:04:05] Sure. Yeah. Yeah. I mean, because it has to be solutions for retailers. Right? And as much as we've been talking about voice commerce and conversational and AI... As much as we've been talking about all these things, retailers are probably more focused on what are achievable goals for the right now and not for the things that I should be doing five years from now, right?

Brian: [00:04:33] Yeah. No doubt. I mean, I think, you know, omnichannel is still a buzz word, although they're kind of going away from that a little bit. I mean, I just think it's more of a... I saw some "What's beyond omnichannel?" fliers out there. {laughter}

Phillip: [00:04:51] {laughter} You know, I think they took it to the superlative way too quickly. That's the problem.

Brian: [00:04:55] Yeah.

Phillip: [00:04:55] They were multi-channel to omnichannel. And there should have been a comparative in there somewhere.

Brian: [00:05:05] {laughter} Probably.

Phillip: [00:05:05] But they went right for it. I went to NRF last year and for three years prior. I did not make it out to NRF with you for you actually being part of the IBM influencers team. So congratulations on that.

Brian: [00:05:24] It was fun. It was fun.

Phillip: [00:05:25] I'm sure you'll hear plenty about the IBM influencer program over the next few episodes, and we can dive into that a little bit here. But the thing that strikes me that I remember distinctly about NRF is walking in to the Javits, which is just the largest conference venue. It's just a massive, sprawling...

Brian: [00:05:46] Huge...

Phillip: [00:05:47] Massive, sprawling expo hall. And you walk in and sort of you're just kind of in sensory overload. And then in front of me, as far as the eye could see, was just cash registers. And I realized, oh, yeah, this is a retail show. So has it changed?

Brian: [00:06:05] It's changed. Yeah. No, definitely. I mean, there's still definitely, you know, "Oh, let's get you some new printer tape rolls," right?

Phillip: [00:06:13] Yeah. And there are vendors at NRF that that's how I've traditionally thought about NRF.

Brian: [00:06:19] Yeah. But that is definitely changing. Microsoft had like one of the premier booths right in the front. You walk right into the hall and you're like, boom, Microsoft, which is just I feel like I mean, I wasn't there last year, but that's got to be a bit of a shift.

Phillip: [00:06:41] A bit. I mean, that sounds like a massive shift.

Brian: [00:06:44] Yeah. So I think this is the year that they're finally saying, oh, my goodness, like digital, digital, everything. It's not digital commerce. It's just commerce. We've been saying that for a long time.

Phillip: [00:07:01] {laughter} I was going to say, a lot of us might have been saying for quite a while, but... Yes.

Brian: [00:07:05] Yeah. Yeah. I mean, there are several of us that are saying that for years. But I think it's really starting to show up in places like the biggest retail conference in the world.

Phillip: [00:07:19] You know, it's interesting. I think if you're a company right now who has focused solely on digital commerce for the last 10 years or eight, seven, eight years, and you've been focused solely on that, if your focus is not shifting to a full scale, digital enablement sort of play, then you will probably be left in the dust pretty soon. Because if you're listening to what the analysts are saying, you're listening to what people are talking about... In fact, you don't even have to attend NRF. Just go read the titles of the talks from the...

Brian: [00:08:07] Yeah.

Phillip: [00:08:08] Yeah. Just go go read what the talk titles are from NRF. And basically, everybody's talking about digital transformation. Everybody.

Brian: [00:08:15] Yeah. Yeah. I mean, I think at this point you could say digital transformation sort of reaching its peak. Its peak.

Phillip: [00:08:22] Yeah.

Brian: [00:08:22] The peak of the bell curve, if you will.

Phillip: [00:08:24] Well we're at peak DT right now.

Brian: [00:08:26] Yeah. Yeah.

Phillip: [00:08:28] Which actually I think is interesting. We're very jaded. Or maybe that's not the right term. We have a very myopic view of how retail works. I think from one perspective, while we're both in digital commerce, but from another perspective...

Brian: [00:08:49] Just commerce. It's just commerce, Phillip.

Phillip: [00:08:50] Okay. Yeah, yeah, yeah.

Brian: [00:08:51] {laughter}

Phillip: [00:08:51] But I'm saying to distinguish the services business that you and I are both part of.

Brian: [00:08:56] Yes.

Phillip: [00:08:56] But I think to another degree, we're also in North America. And that, I think, also gives us a little bit more of a if you're not in Asia and you're not in North America. I think the other markets, not just emerging markets, but other markets are probably not so heavily leveraged on online retail or digitally connected retail, digitally enabled retail.

Brian: [00:09:24] I don't know about that, man.

Phillip: [00:09:25] Yeah, yeah. I mean, again, this is all... I don't have data to back it up, but from my travels and from my experience there, if I go to Germany or anywhere else in the EU, it's very much still a... It is chip and pin a little bit, but most everybody deals in cash.

Brian: [00:09:45] Yeah.

Phillip: [00:09:45] You see what I'm saying?

Brian: [00:09:46] Sure. Yeah, I definitely get that. Yeah.

Phillip: [00:09:48] Right. So I feel like the online marketplace and the predilection for us to reach for our digital devices to shop for things that we're inspired by is very much a cultural thing here.

Brian: [00:10:05] Yeah.

Phillip: [00:10:05] And maybe that, I mean, it's certainly spreading worldwide. We obviously are doing business worldwide with this stuff. But I think it's more prevalent here than elsewhere. And it gives us a very specific point of view, is the point that I'm trying to make. Anyway. Yeah. You go to a show like this and you sort of have some preconceived notions. But so tell me a little bit about you were at NRF for three days, right?

Brian: [00:10:28] Yeah.

Phillip: [00:10:28] Sunday, Monday, Tuesday. So kind of give us a little bit of a blow by blow. How was Sunday?

Brian: [00:10:35] Sunday was definitely a little slower. I think he was still crazy busy. But Monday and Tuesday, it was like you can hardly walk around. I think there were 36,000 people there. That's what they said.

Phillip: [00:10:50] I think you mean one point five million easily. Period. Period. All right. Sorry. That was a political joke. Carry on. Yes.

Brian: [00:11:00] Oh oh oh oh.

Phillip: [00:11:00] Thirty six thousand people there on site.

Brian: [00:11:06] Yeah, 90 different countries represented, I think they said, as well.

Phillip: [00:11:10] Wow.

Brian: [00:11:10] Or maybe over that. So in short, I think it was hopping. So Sunday was pretty cool. I somehow was able to sneak into the Innovation Lab before it was open to the press, which was kind of fun.

Phillip: [00:11:25] Are you allowed to talk about it and what you saw there?

Brian: [00:11:30] Oh, yeah. I mean, it was the same. They were just setting up. It wasn't...

Phillip: [00:11:35] No. Oh, well, now you've taken away the excitement of it. No, I'm saying, tell us a little bit about some of the things you saw there in the Innovation Lab. So they had an actual area that served as an Innovation Lab sort of showroom?

Brian: [00:11:53] Yeah, they did. It was actually pretty awesome. I took a picture of myself out in front of the sign. It was an entire room dedicated to just cutting edge tech and tools. And I think there are some pretty cool stuff there. They had a little stage that they were doing basically like quick product pitches on throughout the day. And they did that all three days. And there were podcasts going on and there were people demoing at their booths. So they were a bunch of little booths kind of all around in a circle. And each solution was pretty, pretty groundbreaking, I think. Maybe not all of them. It was actually, and this is not to be critical of the Innovation Lab because think it's cool they even had it, but it it did feel a little bit underwhelming. It was probably, I don't know, 20 different booths at Max. I mean, if you looked at the rest of the retail floor or of the exhibit hall...

Phillip: [00:13:08] Yeah. Hundreds and hundreds.

Brian: [00:13:10] Hundreds. Two floors. Like insane amounts of booths. And so I'm wondering if it, like, costs something extra to get up in the Innovation Lab. A few of the people that were up in the Innovation Lab also had booths on the main floor. And so I'm thinking there was some sort of additional cost or something like that to be up there. But that said, there were some really cool booths there. Sentient was there. I ran into our friend Jonathan Epstein. Episode 14 that we had him on?

Phillip: [00:13:44] Yeah.

Brian: [00:13:44] 14?

Phillip: [00:13:45] Yeah, it was in the early teens. It doesn't matter. Go back and look it up though. It's a great episode.

Brian: [00:13:50] It's a great episode. Actually it's one of my favorite episodes, and I love what Sentient's doing. So that was fun to run into him there, and they were demoing their Aware and Ascend products. And then one of the things that I got really excited about, and that's cause in Episode 8, and I tweet about this as well, Thursday Finest, which was a...

Phillip: [00:14:15] Yeah.

Brian: [00:14:16] Yeah.

Phillip: [00:14:16] Yeah. I love that. Yeah.

Brian: [00:14:18] It was the come into the store, get body scans, and then that will be on file and you can have close 3D knits to your body specifications.

Phillip: [00:14:31] Wow.

Brian: [00:14:32] And they had a 3D printer on the floor. Or 3D knitter.

Phillip: [00:14:38] Ok. All right. Well, I mean, all netters are technically 3D knitters. Right? Like that's just...

Brian: [00:14:45] Yeah, sure. Yes. That's the wrong way to put it. It was a machine that made clothes. Okay?

Phillip: [00:14:50] Yeah. Well I guess technically most clothes are made by machine. No, I'm just... I'm personally trying to to undercut this.

Brian: [00:14:59] {laughter}

Phillip: [00:14:59] This is basically the same sort of technology that a 3D printer employs where it uses a filament of some kind or some sort of spool of material.

Brian: [00:15:10] In this case yarn.

Phillip: [00:15:11] Yeah. Oh. But it's actual yarn? Like literal yarn?

Brian: [00:15:16] Yeah. It's like it's thread. Or actually I think it is a little bit thicker. I think they were, they were doing like socks and scarves and sweaters and stuff.

Phillip: [00:15:26] Interesting.

Brian: [00:15:27] I think it was about 40 minutes to print a pair, or to knit a pair of socks.

Phillip: [00:15:32] But it's a technology by Intel or being shown off?

Brian: [00:15:35] So I'm not sure who powered this machine. But actually. Yeah, as you'll hear in the Intel episode that we have where I went to the Intel booth, and they were basically showing off like all the cutting edge solutions that they power. There were like 19 different, I think 18 or 19 different stations. I didn't even get to them all in the show. So I had one of their payments executives sort of walked me around the whole booth, and then I got to pass off to another executive. So that's coming up in a future episode. It was quite, quite exciting. It was packed with people. Hopefully the audio quality is good enough to listen to.

Phillip: [00:16:20] Yeah. We'll be here. Yeah.

Brian: [00:16:23] Yeah. So they actually had a much bigger print, like they had a much bigger knitting machine in their booth that was bigger than Thursday Finest. And so yeah. I mean that was pretty, pretty, pretty cool to see that in action because that's something that we've been talking about for a long time as the future, and I think it is upon us, kind of like we said in Episode 8, like within five years, we could actually see a lot of clothing... The way we think about clothing could change.

Phillip: [00:17:01] Interesting. And is it fast?

Brian: [00:17:06] It's pretty fast. Like I said, I think it was like 40 minutes to knit I think like socks or scarf or something like that, which is pretty good. It's like, okay, go hit my One Touch. Hey, I want a scarf in this color. Boom. And then you can pick it up within 40 minutes.

Phillip: [00:17:31] Hmm. So one of the things that's really great about the, again, not to harp on this too much because there's so much more to talk about. But in the 3D print arena, they're able to sort of topographically build up layers of plastic or polymer of some kind where you can sort of print things in their final form and moving parts and all without any real assembly required or print otherwise impossible objects. Is this sort of in that space that they call it a printer more than they just call it a, you know, knitting machine?

Brian: [00:18:19] Yeah. I mean, I think knitting machine is probably more appropriate.

Phillip: [00:18:23] Ok.

Brian: [00:18:23] At least that's how I felt about it. I don't think it's doing impossible things. Like you're going to look at the socks and be like, oh, sweet, a cool pair of socks. Like, I don't think that it's like, whoa, that's a piece of clothing that I've never seen before. It's not like... I don't know. There's not... I didn't feel like there was anything extra special about the clothing.

Phillip: [00:18:46] I see.

Brian: [00:18:47] But I didn't get that in-depth with them. And so maybe I'm wrong. Maybe there is something about the clothing that's beyond what we're used to.

Phillip: [00:19:04] Cool. So moving on from that. What else? So I know that we have a number of interviews coming up. You don't have to spoil the interviews. But I know that you I got a chance to see some people and see some other tech up close. What else can you tell us about?

Brian: [00:19:24] Yeah. One of the other things that I absolutely loved, and I actually didn't get an interview with them at the show because I actually wanted to follow up and do a full episode is Augment. And they do augmented reality for eCommerce. And this part I'm still a little bit fuzzy on. I got the demo from them, and I was absolutely blown away. And then I was moving on. But in browser, and again, I can't wait to get them on the show because I wanted to do this. In browser you can click a button underneath the product image. And in browser you can actually see, without having to have an app, you can actually use their tool and see what the product will look like in physical space through your phone. And so like I was looking at, I think it is like a dryer washing machine, and you hold out your phone and move your phone around and the object, the washing machine, would actually interact with physical space. And so you could spin it. You could set it down on the ground. You could push it into different spaces.

Phillip: [00:20:51] That's crazy.

Brian: [00:20:53] I know, right? Super cool.

Phillip: [00:20:56] And they're called Augment?

Brian: [00:20:58] Yeah.

Phillip: [00:20:59] Interesting.

Brian: [00:21:03] Uh huh.

Phillip: [00:21:03] Ok. Well, can't wait to get them on the show. That's really interesting. I'm hearing actually a lot coming out of NRF. And maybe it's not necessarily just coming out of NRF, but sort of on the heels of CES, too that there are a lot of plays in the augmented reality space that seem to be...

Brian: [00:21:24] Legit.

Phillip: [00:21:24] Legit. Like actually shaping up to be really interesting.

Brian: [00:21:28] And useful. I think that's the thing about this, like it's fun. Like, I have this Space Needle app where I have a little tile, and then I hold my phone up, and I can see the Space Needle and it's shooting, shooting off fireworks around the Space Needle.

Phillip: [00:21:46] Yeah, yeah, yeah.

Brian: [00:21:47] I can knock it over with my hand. That's fun. But this is an application where it's like, oh, my gosh this is really useful. I can put a couch down in my living room. See what it's going to look like and buy it online without ever having to go to a furniture store or warehouse, which is mind blowing.

Phillip: [00:22:09] Wow.

[00:22:10] So there're a couple, again, not coming out of NRF specifically, but we found on Well it was written in a couple weeks ago. Well, on the 13th of January, a post by Syma Alibahi. And so it's kind of an interesting rundown of the current state of VR and AR by major brands. And so they they list four or five brands that are actually experimenting with virtual or augmented reality. Harrods, Burberry, which it's always those high end retailers or brands. Harrods and Burberry. eBay and MYER, MYER as in the Australian department store. Not Mires the American low end grocery chain. {laughter} They're doing a VR department store sort of thing. But the one that stuck out to me was Converse being able to basically map a virtual shoe through Augment, they're using Augments technology, to do AR and map of virtual shoe onto the user's foot, which basically makes a virtual dressing room wherever you are.

Brian: [00:23:34] Yeah, there were a few shoe technologies that were there. I talked with Soles. Soles is putting out one. And now I'm blanking on the name of the actual tech that they were demoing in the lab. It was called SizeRight. SizeRight.

Phillip: [00:23:59] Oh. Yeah.

Brian: [00:24:00] Yeah, that was another interesting sort of footwear...

Phillip: [00:24:03] So how does that work?

Brian: [00:24:04] It's another foot scanning like sort of body data type solution for footwear specifically. Pretty exciting stuff. And there were a couple of others that were similar that were focused on footwear.

Phillip: [00:24:18] When it scans is it using a camera?

Brian: [00:24:23] I think so, yes. I think you actually take pictures of your foot.

Phillip: [00:24:29] Ugh. I can't think of anything worse. As a person with a genuine foot phobia, one of the worst things I ever saw was somebody demonstrating that they could use an iPad and they touch created an app with the multi touch capabilities of the iPad that if you put your foot right on the screen of the iPad, that it could tell you everything about our foot.

Brian: [00:24:55] {laughter}

Phillip: [00:24:55] And I'm thinking to myself, I swear, if I ever use an iPad that, unbeknownst to me, had had feet all over it, I mean, that would be the end of my world. But anyway.

Brian: [00:25:07] That's pretty gross, man. I'm not going to lie.

Phillip: [00:25:10] {laughter} The future of retail is not in feet. I will tell you that right now. No, what's great is the forward thinking nature of a bunch of these brands having implemented this.

Brian: [00:25:23] Yeah.

Phillip: [00:25:23] And what I really find interesting is how they're matching it up with other technologies that previously have been sort of considered dead, either Bluetooth beacons or RFID, which have...

Brian: [00:25:36] RFID is not dead. It is not dead.

Phillip: [00:25:40] RFID was heralded at one time as the sort of be all end all of...

Brian: [00:25:47] The future of retail.

Phillip: [00:25:48] Well, yeah, it really was. I mean, when you talk about, "Never have shrinkage again." I mean, the kinds of like bombastic statements that we've heard.

Brian: [00:25:59] Yeah.

Phillip: [00:26:00] "Never worry about shrinkage." You know, reducing loss. Reducing man hours and inventory hours. But none of that stuff is actually...

Brian: [00:26:10] Yeah. A lot of those solutions were there, too. One thing that did catch my eye was company that was, I think, including some sort of a chip in their clothes or like I think was a chip of some sort. And it actually, like the physical objects had digital properties associated with it. So you're wearing that shirt, going around the city, it unlocks different experiences for you.

Phillip: [00:26:41] Yeah.

Brian: [00:26:42] Or other digital goods that you know are of value to the customer in some way. Kind of fun idea. I like it. I mean, it's not something that you even necessarily need a chip for. You could do that with just, "Hey, wear are our clothes, and you get extra stuff around the city." But certainly the chip makes it seamless. So that was pretty cool. Another cool thing that I saw, and I think we're going to... I talked to them about doing an interview, as well. OnStar. GM and IBM all collaborated on putting Watson into a car that provided contextual ads via voice and screen as you're driving.

Phillip: [00:28:38] I saw something like that or saw something about that and I wanted to know more. One of the things I think is a big sort of a misconception, and I was also guilty of a misconception, which is that Watson is sort of, you know, kind of being thrown around everywhere. Everything is being branded Watson. But you actually sort of reframed that for me as there's a bunch of criteria from IBM about what actually qualifies a product as Watson or not. And so my question would be, do you know what that criteria is?

Brian: [00:29:12] I don't. No.

Phillip: [00:29:14] Ok. So you don't.

Brian: [00:29:14] I think it's a little bit... It might be a little bit of a secret.

Phillip: [00:29:18] Yeah. And I'm curious how those criteria fit into a car navigation system, quasi self-driving, or something less than self-driving, system or platform.

Brian: [00:29:35] Yeah, it was like voice activated.

Phillip: [00:29:37] Sure.

Brian: [00:29:37] So that's where I think Watson kind of came into play there and then also providing contextual ads based on X number of factors, things like that. But I don't have an answer to a question about the Watson list, if you will. We should come up with a name for that, some sort of a code word for that.

Phillip: [00:30:07] Yeah. Well we could. Also IBM has sponsored us for this NRF series. So want to make sure that we're answering the questions correctly. That's why I asked it to you. My guess is we're seeing... We're going to see voice in every single car in the next three to five years. Right?

Brian: [00:30:28] Yeah, at CES they released that I think it was a Volkswagen is putting Alexa and all their cars.

Phillip: [00:30:34] Wow. Yeah. Well, I mean, that's technically... All of CES 2017 was basically Alexa everywhere. And that's sort of what we what we're seeing. Alexia in everything from devices to software apps, Alexa enabled apps. I had a Honda Odyssey from 2010, or maybe even before. I had an Acura RDX from 2007 that had voice capabilities. You press a button, and I could speak to it. And the thing that was always missing is it trained you how to use it. It didn't understand context. It had zero understanding of natural language processing or context. But voice has been in cars for a long time. It's not a new thing.

Brian: [00:31:25] Yeah, not novel at all. No, I think you called it. Like it's been around since 2000, the two late 2000s.

Phillip: [00:31:33] Yeah. I think where we're missing is wake words. But I think my... So the thing I'm sort of driving at, pardon the pun, is do we need this? Because our phones do this. And I feel the same way about this as I do about navigation in cars. Navigation is a high end feature in a car. And do I want to pay for the touring package when I never, ever, ever use the nav in my van? I never use it.

Brian: [00:32:01] So it's a good question. Do you have your phone set to lock, so that you can't use a wake word? Or do you have it...

Phillip: [00:32:12] No, I have a I have a wake word, and I have a trusted voice setting.

Brian: [00:32:17] OK, cool. Yeah that is probably the best way.

Phillip: [00:32:18] In particular, you can set those things up to be more permissive one connected to certain Bluetooth networks. So when I'm automatically in my car and I'm driving, I'm already on the Bluetooth in my car. It's going to be permissive about the wake word and the lock screen behavior.

Brian: [00:32:42] Sure.

Phillip: [00:32:42] Yeah.

Brian: [00:32:43] Yeah. No, it's a good question, especially with Alexa. I actually kind of question why we're putting Alexa in our cars as opposed to...

Phillip: [00:32:53] Yeah. I mean, I would want Alexa in my car the same way I want Alexa in every room of my house in that sometimes I'm in my car, and I need contextually like things that are relevant to me, to how Alexa has come to know me. Right? I want Amazon music in my car. I want Audible podcasts in my car. I want to be able to have it read Kindle books to me in my car. There's one hundred reasons why I can think why this is good.

Brian: [00:33:24] Yeah, but why wouldn't we... I mean, I would say that Google makes more sense, even. There's more context that Google has for me on the go than Alexa has.

Phillip: [00:33:34] Yeah. But I feel like more of my life, more of my consumer life, is housed at Amazon. Maybe that's just me, but I'm not using Google Play for music and I'm not using...

Brian: [00:33:45] Fair. That's fair.

Phillip: [00:33:46] I'm not using Google's books, whatever the heck their digital books are.

Brian: [00:33:51] That's fair. Yeah, yeah, yeah. But you're probably using Shopify. No, Spotify. For music, right?

Phillip: [00:34:00] No, actually, I don't use Spotify for music. I use Amazon Music. But that's only because I'm cheap. Spotify... Also, as a former musician, I actually have a a big ethical dilemma with a service like Spotify. But that's beside the point.

Brian: [00:34:18] Fair enough.

Phillip: [00:34:18] Yeah, my take is that I guess from a preference point of view, as soon as Alexa comes to the phone, this is such a moot point to even debate because I don't know how many people are going to go buy the Volkswagen because it has Alexa when Alexa will be on your phone by the end of the year. So that's my 2017 prediction anyway.

Brian: [00:34:41] Hey oh! That's a fair point. Prediction.

Phillip: [00:34:43] Alexa's, on everything else. It's bound to be baked into Android, or have an opportunity for Android wake word capability pretty soon. So I think that's something we'll see.

Brian: [00:34:56] I think that's a good prediction because and it's interesting... I wonder how many different digital assistants we'll have. You can actually get Cortana on an iPhone. Right? And so I'm not saying that people that are on an iPhone are going to want to use Cortana necessarily, although it sounds like Cortana is maybe doing even better than Siri is in terms of ability. But yeah, but it will be interesting to see what other types of personal assistants pop up. Is everything going to be wrapped up in one? Probably not. Is it going to be a Alexa and Siri? Alexa and Google? Probably. And are there going to be other ones that pop up as well? And I mean, we've talked about this before, but certain brands might even have their own version and then there'll be an opportunity for you to interact probably via some interface in Google. So, like, "Hey, Google, let me talk to Nordstrom's." Or "Starbucks."

Phillip: [00:36:09] Right. Yeah. And I think that's where we're getting. The point that I was distilling it down to, which is all of this is already on our phones. We don't need this to be built into a car, although it's interesting. If it could do more car-y things then sign me up. But I don't think it will.

Brian: [00:36:32] So the one thing that I think that was interesting is the contextual shopping. Contextual reminders and ads and things that actually maybe Alexa can't provide right now. Oh, hey, I'm driving past this and Watson knows that I've been looking for something like this online. And actually, this gets to do another idea that I talked about in some of the upcoming episodes. But the idea of personal inventory. I think that's something that could be real coming up here pretty quickly. I don't know about 2017. so this might not be a prediction for this year, but the idea is that very soon our digital assistants or some sort of apps will have pretty much a stock of everything that we have. And we'll actually be able to get more relevant ads based off of that stock. So let's say that you're running low on milk or whatever, it's going to be, "Hey, stop here, and get milk on your way home." And it's going to save you much time. Oh, "By the way, do you want to pay for it now? It's waiting for you at the door."

Phillip: [00:37:49] Yeah. Yeah. Well, if so, there're a couple things that I think. So that's that's a great vision of the future. I think the next level down would be, and this is now going out quite a ways, certainly not 2017, but I've become very accustomed to having an email come in through Gmail that says, "Hey, let's meet next Tuesday," and next Tuesday is sort of already underlined. And there's kind of already a pre baked calendar event ready to just pop in.

Brian: [00:38:21] Yeah.

Phillip: [00:38:22] And the Google assistant just came to Hangouts within the last couple of weeks, certainly since last time we talked. And if you do anything location wise, if you're just talking about location, like I happened to ask Jaci if she wants to get Starbucks or Chipotle or something... It will actually sort of highlight that word and ask you if you want to search... It does all the Google assistant sort of things that you get now. So it's interesting, we're already doing that in other forms of communication. I think voice is the next one. And potentially what I would love to see is, you know, we get done with the phone call and the assistant pops up and says, "Hey, would you like to set a reminder to pick up milk, since you just talked about picking up milk?"

Brian: [00:39:10] That would be amazing. Or like, "Hey. These are the meetings you talked about."

Phillip: [00:39:15] Yeah. "These were the action items that you just pulled out of that really boring phone call."

Brian: [00:39:19] Right. Yeah.

Phillip: [00:39:20] Yeah. Those are all things that I think will be. I have to believe people are working on those things. But, you know, there is a creepy factor there. Depends on... I think at this at this point it's all possible. I mean, this is certainly possible.

Brian: [00:39:41] Yeah.

Phillip: [00:39:41] So let's delve into the predictions a little bit. I don't know if you want to vamp on this more, or if you want to go back to NRF.

Brian: [00:39:51] One more note. This is a little bit old now, but Gartner... Let's just riff on the voice thing just a little bit longer because Gartner this past year refreshed a study on voice. And they think that by 2018, 30% of our interactions with technology will be through conversations with machines. Thirty percent. I mean, that seems actually pretty realistic. I actually do a lot of my interaction with my phone through voice at this point.

Phillip: [00:40:32] So in one year's time, 30% of all aggregate interactions in search or in other things?

Brian: [00:40:42] Everything.

Phillip: [00:40:43] In everything.

Brian: [00:40:43] So not just voice. Not just voice, but conversations. So it could be chat or voice.

Phillip: [00:40:49] Oh, OK. Well that makes sense I guess.

Brian: [00:40:52] Yeah.

Phillip: [00:40:52] That sounds a little better. But I'm trying to think of all of the interactions that you have all day long. Thirty percent of those, that's one in every three would be would be voice based. Maybe. You know, we're doing like I said, we're going a lot into home automation right now and certainly always looking to increase the amount of voice control that we have. And we become so familiar. I find myself now, you know, out and about and I ask Alexa to do things, and then I realized how patently ridiculous that is. But one day it won't be. {laughter}

Brian: [00:41:29] No.

Phillip: [00:41:29] And you know who will be laughing now?

Brian: [00:41:34] Right. {laughter} Alexa. Alexa will be laughing.

Phillip: [00:41:37] That's true. When she cashes that check.

Brian: [00:41:40] Oh, my gosh. Ok. So anyway. Yeah, NRF. What else? Let's see.

Phillip: [00:41:47] Oh, one other thing. Sorry. One last thing since we've been harping on Alexa for some time. One of these digital voice assistants, they have to come up with an integration to tile if it doesn't already exist. So that I can just ask it where my bloody keys are instead of me having to open up the app and the app has updates, and it wants to upgraded Firmware. And then it tells me about the 12 batteries that are all dying. Just let me just ask where my keys are. That's all I want.

Brian: [00:42:18] Alexa, where's my child? {laughter}

Phillip: [00:42:23] {laughter} That's great. All right. Carry on.

Brian: [00:42:25] Yes. So just really quickly, I want to go back to something you said, like near the beginning of the show about NRF. And that is that it is very overwhelming. That has not changed from year to year.

Phillip: [00:42:41] Yeah.

Brian: [00:42:43] I stepped in, and I've been IRCE and several hours and this was my first time at NRF, at the Big Show. And it is insane. And I'm not going to lie. I loved the conference actually. There were a lot of things that I really loved about it. But as a merchant, I would feel a little lost. And if I walked that hall, it would be kind of terrifying because everyone is trying to sell me something. I think it would be very difficult to discern what you should pay attention to, because there's some pretty cool stuff that's hocked there, if you will. I guess what I'm driving at is merchants, when you go to NRF, have a plan, do some research, talk to your technology partner, or internal technology team. Be ready because you've going to get a lot of pitches in a little amount of time, and you're gonna get told that a lot of things are coming or that you need to do all these things because 2017 is the year of the customer. And {laughter} just be ready. Be ready for that. You're gonna have a much better experience at the show if you do.

Phillip: [00:44:06] The year of the customer.

Brian: [00:44:09] I heard that thrown around a few times.

Phillip: [00:44:13] Do we know what it was in years past?

Brian: [00:44:16] I don't even know now. Last year Masina dubbed it Year of Conversational Commerce. I don't know what NRF dubbed it. I do have to bring up one idea, though, and I think this is an interesting one because... I'll call out Kurt Theobald here on this one because he's like, "I hate the word omnichannel," just like almost everyone. He's like, "I want to call it convergence," like brick and mortar... Oh by the way, Kurt Theobald, Classy Llama. I used to work there, and he's a great forward thinker. He's a great guy to talk with about this kind stuff. So he's like, "Yeah, I wanna use the word convergence for the mashing of brick and mortar and digital instead of omnichannel." And I thought that's a pretty good idea because omnichannel is a terrible word. But actually what I want to do is actually broaden that word's definition and actually take it to where ever technology is meeting to form new solutions that are beneficial. And I would define it as happening whenever two technologies come together in such a way that a merchant can recognize an ROI from it. It's so funny because I was thinking about this and talked to a few people about it beforehand. And I stood up kind of near the front for the keynote by the chairman... Chairman? Of NRF.

Phillip: [00:45:58] Yeah. You got me.

Brian: [00:45:59] Chair or President, something like that. Anyway.

Phillip: [00:46:01] Sure.

Brian: [00:46:02] I was watching his speech. But I could also look back and see his teleprompter because I was standing up.

Phillip: [00:46:08] Sure.

Brian: [00:46:09] And one of the things, one of the main slides that he had on there was "Convergence in tech" as a header. You'd actually say the word convergence. But I think it's on people's mind. That word I think is a good one. And I actually think it's a really good one for 2017. And now I'm getting the predictions. But I think this is the year where we're going to see technologies we've been talking about for a long time, come together in a meaningful way to provide a better experience for customers or create some sort of better conversion rate or ROI or whatever it is. This is the year where we actually see that happen in a lot of different ways. Like one-off ways. I wouldn't necessarily say that we're gonna see like one solution dominate the market, but we're going to see a lot of these like one off, "Hey, I took this technology, put it together with this technology and created this type of solution that's awesome," things happening this year. And I'm going to call that convergence.

Phillip: [00:47:13] Yeah, I think you're right. I think we will see some element of convergence in 2017. I really hope that it's because of adoption by the customer, the all important, all powerful customer and not because of...

Brian: [00:47:30] The year of the customer.

Phillip: [00:47:32] Yeah. And not not because of consolidation in the market or de globalization. I think that there are incredibly negative forces that could force some of that convergence because people have no choice but to really master other channels because their old channels are dying.

Brian: [00:47:59] Interesting point. Yeah.

Phillip: [00:48:01] You have to look back. I'm sure that there was probably an NRF in 2004 or something. I don't know this... I'm just... This is hyperbole, but I'm sure there was an NRF or IRCE where they said "This is the year of the affiliate," and the affiliate channel is all but dead in most areas of commerce now. So my guess is that, you know, channels come and go. I think you have to understand the fundamentals of how your customers work and how your business, what your business provides to your customers. And that should transcend where you sell.

Brian: [00:48:43] Yeah, I totally agree with that. Yeah. I think you know who does a really good job with that is Neiman Marcus. And I actually got to catch up with Scott. I'm sure we'll insert that clipping in here at this point in the show. But I feel like that is exactly how Scott Emmons thinks about his strategy for implementing new solutions. Channel is important. But it's about meeting the customer where they are.

Phillip: [00:49:12] Yeah, that actually might be a really great place for us to sort of start wrapping it up here, because I think we do need to meet customers where they are. And that's actually a good portion of what the show is about, is meeting customers where they are. And we talk a lot about voice platforms. We talk a lot about the emergence of AI, the emergence of VR and AR. All these interesting things. And we want to be where our customers are. That's the key. Right? So anyway...

Brian: [00:49:47] No, that's a good point, because like actually I'll get into this in an interview with Amber Armstrong from IBM, but they put out a study on Gen Z right before the show in collaboration with NRF. And Gen Z, I think they've already got $44 billion in purchasing power, and they are young.

Phillip: [00:50:09] Wow.

Brian: [00:50:09] I know. Right? And the interesting thing about that study, although I think maybe this interpretation is a little bit in dispute. I talked to a couple people who were like, "Yeah, I think the questions that they asked maybe could be interpreted an other way. But I think this is actually quite true, though. Actually based on my experience with Gen Z, this is true. And that is they are not going to abandon the in-store, but they do expect in-store to interact with them differently. They do expect brands to engage with them in new and exciting and meaningful ways that makes going into the store worth their time.

Phillip: [00:50:57] Yeah, I mean, you cannot discount the chief of all of the reasons to go in store, and that's the instant gratification. Prime now is successful because we can get what we want from Amazon right now. And I think that in-store will never go away. Brick and mortar won't ever go away, if only because we need that right now-ness to be etched from time to time.

Brian: [00:51:29] For sure. And the other thing that I think you called it actually maybe 2017 is the year of the customer or that is meeting the customer where they're at.

Phillip: [00:51:41] {laughter} Well... Yeah. And I think that we will only see that in reality when customers make decisions about which platforms are meaningful to them. We can't tell them what platform. We can't tell the public en mass what platforms to gravitate toward.

Brian: [00:52:01] Well, I think it's pretty clear. Voice is one of those.

Phillip: [00:52:06] Well, but yeah. But there's going to be a winner in the voice space.

Brian: [00:52:12] Yeah. Alexa.

Phillip: [00:52:12] And one of them has an 18 month market lead. {laughter} So they have a big head start. They'd have to do something pretty monumental to squandered it at this point.

Brian: [00:52:23] Yeah.

Phillip: [00:52:24] And they have a massive app store. I mean, there's like something like I forget the last count, three or four thousand skills in the Alexa skill store.

Brian: [00:52:33] That's like triple when we started.

Phillip: [00:52:35] I know. And it's growing even faster now. I mean, they're giving away developer hoodies every month.

Brian: [00:52:39] I saw that.

Phillip: [00:52:39] All you have to do is select some nonsense skill in the store. They're like basically daring people. They're like paying people with branded merchandise just to take a shot on Alexa. It's interesting. I think when we continue to see if the figures from Holiday 2016 and the estimates come to be true. And we'll see it soon, I'm sure, probably around Amazon's Q4 earnings call. When those numbers prove true, and we know how many Alexa users are here and engaged, how many use it on a daily basis. I think that will prove to major brands that that's the next platform to be developing for because apps are dead. You know, as Brian Roemelle said a couple episodes ago, apps on phones are dead. People have five apps now. You have Instagram, Facebook, Twitter, and maybe a host of other, you know, camera or social apps. But you typically phones have become very social devices, but not necessarily ones outside of gaming that are doing anything worthwhile in the app space. For all the potential that's there, it's not engaging in commerce outside of the marketplaces. So we'll see it. We'll see it. I think it's a big platform. But Alexa has to win it de facto. Interesting.

Brian: [00:54:17] Yeah.

Phillip: [00:54:17] I went on a long rant there. I'm stoked that you agree with me to some degree.

Brian: [00:54:23] Oh yeah. Do I ever.

Phillip: [00:54:27] What's your take on... So I feel like NRF had a bit of a rebirth. I've heard people have sort of audibly rolled their eyes in the past that they have to go to that show. But this one sounds like it's really turned around. And if anything, people are more excited about NRF now than ever and probably a little less excited about, you know, some of the other shows that are getting a little bit long in the teeth like

Brian: [00:54:58] Yeah, honestly, this is going to sound a little sad. So I probably can't pass judgment on it. The companies that I've worked for have opted not to attend

Phillip: [00:55:12] Yeah.

Brian: [00:55:14] Based on experiences that they've had with it. And it's kind of being replaced by Shoptalk. And some others. Shoptalk is definitely exciting. I want to go to Shoptalk. I don't really want to go to

Phillip: [00:55:31] Yeah that's true. I can see that. Yeah.

Brian: [00:55:35] But NRF I think is definitely making a play. It's the biggest. It makes the most sense for it to kind of take this turn. And so I'm glad that they are. I'm glad that Microsoft is showing up. Oh, man. One of the cool things that I saw at the show was actually at the SAB Hybris booth. I'm going on a tangent right now, but it speaks to where NRF is at. They were demoing an integration with Blippar. Blippar is a company...

Phillip: [00:56:10] Oh yeah. Yeah, yeah, yeah.

Brian: [00:56:15] And dude, it was way cool. Actually this is insane. Blippar's app has facial recognition for every single person on Wikipedia.

Phillip: [00:56:32] {laughter} What?

Brian: [00:56:32] At least that's what they told me in the booth. I need to go download the app and like, try this out. But you take your app, and you hold your camera up to someone's face, and if it's in Wikipedia, they will bring it up information about them.

Phillip: [00:56:51] Wow. And so but that's I mean, that's got to be ostensibly millions of people. Has to be.

Brian: [00:56:58] Yeah. Oh, it is. Yeah. No it's crazy. And there are a bunch of other cool stuff like that. And there's actually a lot of cool stuff that I can't even talk about. I also got to visit Body Labs Office, which was way cool, too.

Phillip: [00:57:13] Okay. Yeah. We have to dedicate a whole episode just to Body Labs. To this day, I think our Body Data episode is one of our most popular.

Brian: [00:57:23] It is Yeah. Definitely. Episode 8,baby. Yeah.

Phillip: [00:57:25] Definitely something we need to get back into. And we'd love to have somebody from Body Labs on the show.

Brian: [00:57:31] I already got hooked up. This is happening.

Phillip: [00:57:33] I love it. I love it. Well, take us home. I'll let you do the honors. Take us out.

Brian: [00:57:38] Oh, shoot. Well, thanks so much for listening to us today. We hope you really enjoyed the show. And if you did really enjoy it, you should go on on iTunes. Leave us a five star review. Leave us some feedback in the Disqus comment box below on our web site or reach out to us on Twitter, LinkedIn, or anywhere else that you can find us {laughter} and definitely subscribe to the podcast. You can subscribe on iTunes or wherever else that you listen, or you could just listen right now from your Amazon Echo with the phrase, "Alexa play Future Commerce podcast." So don't miss out because there's some amazing content ahead with IBM and their influencers and futurist team and potentially crazy guests coming up. Like crazy, crazy, cool stuff that we're talking to some people about. So definitely subscribe. With that keep looking towards the future. Thanks for listening.

Phillip: [00:58:47] Bye bye.

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