Even with lockdown easing and non-essential shops being allowed to reopen from 15 June, a day out shopping does not appeal in the same way it would have done before the pandemic. Queues to enter, one-way systems, plastic screens and a prohibition on touching items do not sound like a stress-free way to spend our free time. The reasons we like to engage with products we intend to buy in the real world as opposed to online are for real-world feedback - does this look right on me, does it fit, what does the fabric feel like?
Can AI and VR save the UK's shops?
Savvy retailers are looking to artificial intelligence (AI) and virtual reality (VR) tools to combine the best of both worlds - giving consumers individualised and realistic feedback when shopping online. Virtual reality changing rooms enable consumers to 'try on' clothes in different sizes. Visual search tools help shoppers find what they are looking for by colour, fabric, shape, much as you might scan a shop to see what catches your eye. These sophisticated tools require a huge amount of data and inputs - materials, dimensions, fabrics, classifications - plus computing power to bring it all together for each consumer's use case. These tools will also give retailers a unique insight into what shoppers are drawn to try on, what they try but do not buy, what they style together, all of which is data not normally captured during in-store shopping. This information could then be fed back into the retailers' data pool to assist decision-making on new season designs, colours and stock. It also creates a goldmine of information about individual shoppers, allowing retailers to enhance even further their personalised services. Clearly there are significant privacy implications to implementing these systems especially if the activity amounts to profiling, but providing it is correctly governed and communicated, there is huge potential value to both shop and shopper.
Time to regulate AI
The pandemic has driven more retail online than ever. Those who already had fast, slick omni-channel systems were well-placed to prosper during lockdown. Now with the reopening of physical stores, it will be those who can enhance their e-commerce offerings with new technologies, such as AI, to include real-world shopping experiences who will have the edge as they compete with the bricks and mortar shops. GDPR is a well-known compliance requirement if retailers are focusing on personalisation; the need to use AI with care may be less familiar. AI regulation is a moving feast as both the UK and EU are actively looking at this topic, as we discuss in our blog on regulation and standards in AI.
Moving feast of regulations
As retail is driven increasingly online, others are looking to harness AI to interpret data collected through cookies, tracking pixels and other technologies. These insights can be used to enhance marketing databases or to combine data from various sources to analyse consumer behaviours and shape marketing campaigns. The power of such tools is evidenced by the government's interest as the Centre for Data Ethics and Innovation has published a report on online targeting which is intended to help shape thinking on the Online Harms Bill. The Information Commissioners Office has paused its own investigation into AdTech (citing coronavirus) but will recommence this when resources allow. The progress of the new Draft ePrivacy Regulation (which will eventually replace the Privacy and Electronic Communication Directive 2002) is much delayed and still progressing through the European Commission and is specifically concerned with looking at how cookies interact with AI and internet of things and what statutory measures are required to ensure legitimate use. The latest changes consider whether cookies can be placed based on 'legitimate interests' in some scenarios or whether a tighter, pre-defined list of grounds must be used.
With so many moving parts, retailers will need to keep an eye both on the technology and the law to stay ahead of the game.
Originally published 16 June 2020
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