Investec: Retail, Tech and Travel Trends You Need to Know in 2018

Instead of seeking escapism from the political, economic and social turmoil, consumers will find security by reconnecting with their emotions in 2018. Brands will respond by empathetically delivering premium services and relevant experiences across retail, tech and travel, looking to better understand and respond to human emotions. In an article brought to us by Investec, Hayley Ard, head of consumer lifestyle at innovation research firm Stylus, pulls out six trends for 2018.

 

1. Retail’s Soft Sell

Consumers deterred by hard selling will find favour in a new breed of agile, futureproof brand spaces. There, the burden of delivering immediate sales will be set aside, and retailers will instead nurture experiential relationships. According to PwC/SAP’s latest Retailer Survey, 37 per cent of sellers plan on making their in-store offerings more experiential – the leading choice among omnichannel investment choices.

It will be possible for brands and retailers to gauge consumers’ emotional states using facial recognition tools and movement sensors in smartphones and other devices

In October 2017, luxury fashion outlet Browns opened a second London store with a members’ club. The store also includes smart mirrors, so buyers can view potential purchases in different environments, and sales assistants equipped with an advanced ‘clienteling’ app. Also looking beyond simple sales is whisky brand Johnnie Walker, which has an invite-only membership programme that grants access to customised tasting experiences, rare casks, private events and concierge services.

In 2018, a ‘shop-free mall’ is scheduled to open at Silvertown Quays in London’s Docklands. An entirely non-transactional mall, the focus there, says the developer, is on creating a place for brands, businesses and people to learn, create and live.

 

2. Brands Get Emotional
Using AI to leverage emotions represents a significant commercial opportunity for brands.
While the technology is in its infancy, it will soon be possible for brands and retailers to gauge consumers’ emotional states using facial recognition tools and cognitive movement sensors in smartphones and other devices.

These tools will enable businesses to translate emotions into tangible, immediately actionable insights, both online and in-store: altering prices, suggesting products and adapting service styles.

Emotibot Technologies unveiled in 2017 software that enables digital personal assistants like Amazon’s Alexa and customer-service chatbots to better understand users’ emotions through facial recognition, verbal cues, body language and text input. Emotibot is currently working with banks, telecoms firms, e-commerce and travel services providers.

A study by PWC found that AI could contribute £11.6tr to the global economy of 2030. Deloitte’s 2017 Digital Disruption Index revealed that 85 per cent of UK companies plan to increase investment in this area over the next two years.

 

3. Next-level VR
The global virtual reality (VR) and augmented reality (AR) market is predicted to be worth £60bn by 2025, according to Goldman Sachs. There’s a clear opportunity for VR to incorporate more sensorial, immersive elements like scent and touch. And with more senses engaged, consumers are more focused.

British start-up eScent makes a device that creates personalised scent ‘bubbles’ around a person, with the type and frequency of the scent controlled by either the user, a brand or automated environment-tracking sensors. The device can be integrated into a VR headset to intensify an experience or even calm shoppers during busy periods in-store.

Tesla Studios, a Sheffield-based start-up, unrelated to Elon Musk’s electric car company, is making a body suit with sensors to track movement and haptic points to provide a range of physical sensations. The promise of VR has been around for over 30 years, but the tech remains desirable. A survey by JWT Intelligence found that 72 per cent of US and British millennials (aged 23 to 36) crave the sort of sensory experiences provided by VR.

Industry watchers suggest that the next iteration of VR will be XR, or crossed reality, in which multiple users, possibly in multiple locations, using different types of device, all plug into one shared virtual experience.

 

4. Smartphone Philanthropy
A new generation of investors, especially millennials, is looking to invest money in ways that reflect social and environmental concerns. Research by JWT Intelligence shows that 88 per cent of millennials and Generation X-ers (aged 37 to 52) in the UK and US believe brands need to do more good, not “just less bad”.

Until recently, financial and investment choices were all about the potential returns. Now, more people want to do good while turning a profit. The financial sub-sector of robo-advisors, which use algorithms and AI to help people make investment choices, is expanding and will play a key role here.

Millennials “want to express individual values”, Josh Levin co-founder of US start-up OpenInvest told The EconomistOpenInvest is a robo-adviser that offers choices for shares for a portfolio based on whether companies align with investors’ ethics.

Similarly, Grow Invest, based in San Francisco, is an app that allows novice investors to put money into companies with good environmental, governing or social practices. Users select causes they care about, decide how much they want to invest and enter their bank details. From this data, Grow creates appropriately personalised investment portfolios.

 

5. Transformative Travel
In the era of ‘peak stuff’, luxury travellers are increasingly motivated to infuse their journeys with self-growth opportunities. This is spurring impressive growth within luxury travel, which is projected to grow at a CAGR of 6.2 per cent between 2015 and 2025: about a third faster than overall travel at 4.8 per cent, according to travel intelligence company Amadeus. Allied Market Research predicts the luxury travel market to be worth £857m by 2020.

In 2018, the trend will be for travellers to be put at the heart of their own narrative. London travel start-up Travel Unwrapped creates custom journeys for clients based on ancestry revealed by a DNA test. Travellers can opt to be accompanied by a genealogist.

UK tour operator Luxury Travel Advisors makes its clients the stars of their own documentaries, providing a five-person camera crew that accompanies groups to exotic locations ranging from the Arctic to South Africa.

Sophie Colvin, business development manager of hotel data company STR says that European hot spots in 2018 will include Madrid, Barcelona, Amsterdam and Dublin, alongside resurgent destinations such as Brussels, Paris, Moscow and Milan.

 

6. Ultra-luxe Adventure
The global adventure tourism market will grow at a rate of 46 per cent between 2016 and 2020, according to analyst firm Sandler Research. Taking self-growth to the next level, more travellers will look for destinations offering extreme experiences, testing their physical and mental limits. This will open up radical ways for brands to engage with consumers.

“Operators play a major role in selling pain to the saturated selves of knowledge workers, who then use pain as a way to craft their life narrative,” says Rebecca Scott, a marketing lecturer at Cardiff University.

In January 2017, UK travel company Untamed Borders, renowned for small, private tours to inaccessible, war-torn countries, hosted the first ski trip to Iraq. In 2018, a seat on a submersible diving to the Titanic during an eight-day excursion run by Blue Marble Private (See more on Blue Marble Private in ‘Beyond Luxury Travel – From the Titanic to Total Personal Overhaul’) costs £80,000. About twice that is the starting price for the six-month ultra-bespoke travel experience run by The Extraordinary Adventure Club (See more on The Extraordinary Adventure Club in ‘Beyond Luxury Travel – From the Titanic to Total Personal Overhaul’), where destinations remain unknown until you see travel documents at an airport.

An appetite for the unorthodox is also filtering into the adventure accessories market. In September 2017, US materials company 37.5 Technology opened a 24-hour pop-up store at 300ft on the side of a sheer cliff-face in Colorado. The concept, rumoured to be reprised in 2018, provided shopper-climbers with a major badge of honour.

Hayley Ard, head of Consumer Lifestyle at innovation research and advisory company Stylus.