The future of shopping

What is the future of retail? High street shopping has lost much of the luster it had until the nineteen-seventies. It was the Grands Magazins at the turn of the twentieth century – Bon Marché, Samaritaine, Printemps – who made shopping a destination and a pastime. In the eighties, when branded stores started to take over, the high streets in Manchester and Birmingham, Vienna and Brussels started to look increasingly identical. Today, high streets in Europe are to a large part interchangeable, with branded retail, coffee and fast food chains dominating the streetscape.

With increasing rental prices, mostly only large multinationals could afford a presence in high streets, with the result that inner city shopping streets in Europe have lost their main point of attraction: Uniqueness and difference. The mantra of brand recognition, combined with soaring real estate prices, has made shopping in high streets generic and unexciting.

No wonder, then, that online shopping is successful. Buying online is not exciting, but at least you save yourself a tedious trip. Taking this logic further is Amazon Go, an supermarket without cashiers or counter personnel. Amazon Go is a brick-and mortar store imitating an online store where your every move is being tracked and recorded. As if it were the implicit goal of contemporary tech companies to eliminate all jobs on the planet, there is no single human in attendance.

Here is how existing data and technology can be put together: The AI system, which has identified you through the selfies you abundantly delivered to your Facebook and Instagram accounts, tracks your every move and emotional expression. That displeased look on your face when you see that new yoghurt promotion? Saved in the system – you won’t see it again. Forgot that salad and had to retrace your steps to the veggie section? Saved in the system – next time you will be reminded when you enter the shop.

There is no checkout, as everything you put into your shopping bag was tracked and will be automatically deducted from your online bank. As you walk towards the exit, a section in the fridge lightens up, and your Amazon Alexa voice suggests you purchase that ice cream you so much enjoyed. It knows as you tweeted about it last week.

One of the more sinister arguments for surveillance systems with CCTV cameras and face recognition systems is that they do not require “human cooperation”. Indeed, if you are in a CCTV environment you are being tracked, if you like it or not.

In this shop of the future, you have been identified through a host of different pattern-matching algorithms: The system knows it is you through the geometry of your face, which an algorithm automatically constructed from your selfies. The system knows it is you through the way you walk, which an algorithm has compressed into a pattern from footage on CCTV cameras. The system also knows you through the patterns of your skin and your retinas.

But is that really the future of shopping? AI-assisted shopping will have to deal not only with privacy laws, but also with the uncanny experience of interacting with synthetic assistants. What happens to the psychology of shopping when shoppers know that they are permanently observed, interacting only with pattern-matching algorithms? Will the millennials, a generation brought up with online dating and selfie-making, indeed relinquish all privacy for the alleged convenience of AI-assisted shopping, or will there be a resurgence of privacy and individuality?

Another approach is to bring back excitement and a sense of experience to shopping. Bangkok’s newest shopping mall, Embassy Quartier, hosted in purpose-built buildings in the heart of Asia’s most visited shopping destination, offers a range of interesting concepts to encourage discovery: Curated fashion spaces with interesting and lesser known local designers, hybrid shops, and an extensive food mile with a stunning breadth of offerings, arranged in a spiral design where one can walk through a Pan-Asian food street sloping up to the top floor.

How we conceptualize the shopping experience of the future depends on how we see our customers. Since time immemorial, from bazaars to department stores, shopping is about human narratives. It is a quest, a discovery, and a deeply human experience. We should work on making their time worthwhile, offering interesting stories, positive surprises and enriching experiences, not on taking them away.

Working on why your design doesn’t work: The double-loop process for better design results

One of the analysis steps we at MGD pioneered is a thorough analysis of the current designs used by a client. We look at the entirety of a client’s expressions – product designs, brands, media messages, appearances on web and different media – to establish a set of parameters including the values of emotional and symbolic expression and the degree of overall coherence with current consumer trends.

This is important for large corporations with a variety of offerings who want to send a set of coherent messages, but also for start-ups who want to establish a discernible image for a new product.

When we conduct this analysis, we find that many designs ultimately fail to respond to the actual needs and aspirations of consumers. One way to improve the general design outcome is to use the double-loop design process which Mario Gagliardi developed on the basis of the double-loop learning model of business theorist Chris Argyris.

The double-loop design process motivates designers, product developers and marketers to take a closer look at the set of limitations which exist at the outset of every design process.

The first set of limitations are the unarticulated and hence unquestioned assumptions at the beginning of a design task. Which biases, prejudices and assumptions exist about the product category, the company, and the consumers of a future product? What is the mental idea the designers have about a product and consumer group, and with which design style do they answer this mental idea? These unquestioned assumptions have a strong influence of the final outcome of a product.

For instance, the design of automobiles is influenced by design ideas of high speed and high power rather than by design expressions of intelligence, safety and cooperation. Even Tesla, who revolutionized automobiles by making them intelligent and convenient, still employs a design language influenced by the rakish lines of sports cars.

There are several effects at work, one of which we call design delay. Assumptions of how something has to look like can be very strong at a particular point in time. For example, early motor cars have been designed to look like horse carriages – without horses, of course – as the horse carriage was the closest object to semantically hold on to when designing the entirely new product of automobile.

We call this first set of design assumptions ideological limits. They exist at the very beginning of a design process, and their outcome creates a set of limiting factors for the next step, the design implementation. Here, technological limits – or what is assumed to be technological limits – determine how a design is developed to enter the marketplace. For instance, a company might assume that hybrid or electric motors for automobiles are not feasible and hence decide to forego development in that sector, while another company might question this assumption.

The results of these two sets of biases then enter the market and feed into what consumers make of it. Consumers then answer with expressions – the ways how they interpret and use the product. These user expressions are fed back into the next iteration of the design process, giving valuable clues as to how the design can be improved and helping designers and product developers to overcome their initial bias.

Analysing the Digital: Transformations, Territories, Frames and Uses

A new paper by Mario Gagliardi describes a comprehensive ontological framework to analyse the Digital.

While digital space is explained in itself by computer science, important questions for the humanities – such as how the Digital affects human behaviour, or how it impacts society and economy – are outside its scope. Different disciplines have provided answers, but there has been no integrated concept bridging these insights.

This paper proposes a concept to explain the Digital by integrating insights from computer science, media studies, sociology and philosophy. The resulting framework suggests that the Digital consists of characteristic dynamics, spaces and mechanisms. After explaining the concept of Digital Machine, an ontological framework consisting of four main fields of analysis – Transformation, Territory, Frame and Use – is proposed.

With Transformations and Territories, the processes of the Digital and its wider socio-­political and economic dimensions are analysed. Within Frames, human action and interpretation happen. In the Uses of the Digital, consumption has become a form of production, and User’s uses can be analysed in the differential between the intents of a Digital Machine and the interpretations of its users.

To conclude, Anders’ concept of Promethean slope is taken to explain the increasing problems of humans to distinguish the actions of algorithms from human action, and future implications of the evolution of the Digital are discussed. Finally, routes for digital innovation and recommendations for design practice are proposed.

The paper was presented at the 12th European Academy of Design Conference in April 2017. It will be published by Taylor & Francis in the Fall 2017 issue of The Design Journal.

Evolutionary painter

What if your sketches would evolve and start their own life with algorithms inspired by biology? Try it out with our new evolutionary painter app on penccil. Click and drag to sketch, then try out different presets from the drop-down list on top. You can save your evolutionary paintings with the SAVE button on the bottom.

Korea’s bestselling luxury brand in China

Korean cosmetics brand Whoo  (后), conceived and designed by Mario Gagliardi and his team at LG Household and Health Care, has surpassed all competitors including Cartier, Louis Vuitton and Rolex for overseas luxury duty-free sales in Korea. It is the first time a Korean brand has become the bestselling luxury brand. Among the users of the Whoo series is first lady Peng Liyuan, the wife of Chinese president Xi Jinping, and Chinese actress Angelababy Yeung.

whoo3

The beginnings of the brand reach back to 1997, when Mario Gagliardi, then chief designer and head of design strategy at LG, convinced executive director Lee Young Joo of the LG Chem Design Institute to start developing something which has not been done before: Cosmetics series with a genuinely Korean theme.

At the time, LG Household & Health Care produced several cosmetics brands with Western themes. The company increasingly lost ground with domestic customers, who preferred imported American and European products and perceived LG products as less convincing than the Western competition.

Mario’s strategy was to bring back domestic consumers with decidedly culture-specific brands and designs, and in the process create authentic brand identities which would stand up for themselves in international markets. After a successful presentation with the CEO of LG, the first series brought to market was Yin, followed by O Hui.

Yin was built on the idea of the complementary forces of Yin and Yang, a core theme in Korean and Asian philosophy. Depending on character and skin type, Yin cosmetic bottles came in different colors. Elaborate miniature sculptures on top symbolized Asian traditional elements. Its ingredients and scents, made from Korean herbal essences and ginseng root, emphasized its philosophy.

The idea was expanded further with O Hui (Five Hues, the five essential colors used in Korean traditional architecture, a concept comparable to the five elements). Also made with natural essences, it interpreted the aesthetics of ancient Korean courts, taking design cues from Korean and Chinese cultural artifacts. Yin then was modified by adding ideas of O Hui to create Whoo (Empress). The design language elements of the cosmetic bottles – characteristic round shapes, elaborate bases and finely crafted miniature sculptures on top – are suggestive of their precious content.

Before, the stories told in cosmetics marketing were all about Paris and New York. Yin, O Hui and Whoo changed this perception, telling genuinely Korean and Asian stories. Since the launch of the first designs in 1998, these cosmetic series have been enthusiastically received, first in Korea, then in China. The revenue of Whoo with Korean and Chinese consumers is continuously increasing, making it today Korea’s leading cosmetics brand.

The design team at LG H&H continues to develop design variants with finely crafted details in keeping with Mario’s concept and design language.

 

whoo

Chosun Ilbo Biz

LG Blog

Chinese shoppers in South Korea shunning luxury brands like Louis Vuitton in favour of local goods

Chinese tourists prefer Korean cosmetics brand Whoo, designed by Mario Gagliardi, to global luxury brands Louis Vuitton, Chanel and Cartier.

South China Morning Post, Friday, 05 February, 2016

Chinese visitors to South Korea are buying less from global luxury mainstays like Louis Vuitton and Chanel in favour of cheaper home-grown brands, as young, independent travellers make up a bigger share of tourists. Lured by the “Korean Wave” of culture exports, from soap operas and K-pop music to food and fashion, price-conscious younger Chinese visitors are seeking a more authentic and less expensive shopping experience.

South Korea trails only Thailand as an overseas destination for Chinese travellers, whose heavy retail spending has helped make South Korea the world’s largest duty free shopping market.
The emphasis on value will put further pressure on global luxury retailers already grappling with slowing sales in China after years of skyrocketing growth, as a government crackdown on graft and lavish spending bites.

“You can buy those big brands everywhere, and it is actually cheaper to buy those brands in other countries compared to the prices in South Korea,” said 21-year-old Zhu Xin, who was shopping at the Stylenanda store in Hongdae, a Seoul neighbourhood popular with young adults.

“Now that we are here, we should buy local brands,” she said. Average prices on best-selling items from global luxury brands in South Korea are cheaper than they are in mainland China, but still cost more than in Europe, Singapore and Dubai, according to HSBC data.

At downtown Seoul duty free shops run by Hotel Lotte’s Lotte Duty Free and the Samsung Group’s Hotel Shilla, LG Household & Healthcare’s Whoo and Amorepacific’s Sulwhasoo cosmetics were the top-selling brands in 2015, overtaking Louis Vuitton, Chanel and Richemont’s Cartier, store data shows.
“This doesn’t necessarily imply that luxury retailers have to launch cheaper stuff, but it does necessarily imply that they have to be more relevant at every price point,” said Erwan Rambourg, an analyst at HSBC in Hong Kong.

The number of Chinese tourists to South Korea dipped 2.3 per cent last year to about six million due to the deadly Middle East Respiratory Syndrome, or MERS, outbreak.
However, brokerage CLSA says Chinese inbound traffic growth rebounded from September and should jump by 28 per cent in 2016. The South Korean government expects a record eight million Chinese visitors this year.

Chinese tourists to South Korea are getting younger: the share of those in their 20s and 30s rose to 46.1 per cent last year, from 40.9 per cent in 2013, according to the government-run Korea Culture and Tourism Institute. While older Chinese tourists typically travel in groups where they are ferried between shops catering to them, Chinese millennials tend to be better-informed about what they want, travel independently and spend less on shopping.

“I use my mobile phone to research what products to buy in South Korea,” said 20-year-old Chinese tourist Liu Yuting. “Many Chinese girls like South Korean products because most of them are cheap and cute.” At Lotte Department Stores, a chain owned by Lotte Shopping Co, average spending per Chinese visitor fell to 500,000 won (HK$3,250) last year from 900,000 won in 2013, although the surge in overall visitors made up the difference, an official with the chain said.

“Whereas past generations blindly purchased luxury goods, the younger generations have a more price-conscious consumption pattern,” KB Investment & Securities analyst Yang Ji-hye said.