Trend Report 2019 - Echangeur BNP Paribas Personal Finance

Commerce Reloaded 2019 I #CR19ECH I Trend Report

Trend Report, published March 2019 by Echangeur by BNP Paribas Personal Finance

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Echangeur by BNP Paribas Personal Finance - Cover photo credit: ©Vertigo - Guillaume.Rio

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CONTENTS

Introduction page 04

New Retail & Algorithms page 12

Smart Home & Health page 35

Smart City & Mobility page 58

Gen Z & Parallel Worlds page 79

Conclusion page 86

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Every year, experts at Echangeur by BNP ParibasPersonal Finance deliver a trend report to Retail professionals on

innovative technologies which will affect Retail. Their progressiveanalyses, in touch with digital and retail innovation operators, areenriched by coverage from trade fairs like Web Summit in Lisbon, CES[Consumer Electronics Show] in Las Vegas and Shanghai, Retail’s BigShow in New York, and also the South by Southwest festival conferencesin Austin.

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2019 marks a turning point.For every key player in retail,consideration of their customers’environment is the new linchpin.

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Faced with a multi-faceted consumer, aggregating value makes perfect sense. Ikea is

investing in autonomous cars, Procter & Gamble is turning to the world of health, and

Panasonic is pursuing developments in urban mobility. The purpose of these

initiatives is to cover every aspect of our lives comprehensively. It is no longer a

matter of making and distributing merely one item, for example furniture, health

products or television sets. Slogans under the banner ‘Technology for a better life’

suggest more ambitious value proposals. They are invitations to an enhanced,

broadened experience that pushes retail into the heart of our lives.

If the Ambient Retail announced by Echangeur becomes a reality, it will take on a

whole new dimension, favouring an ambient ‘personal life assistant’, under the guise

of global algorithms and solutions.

Google, Amazon, Alibaba and Walmart... are all little by little entering into our lives.

For every one of these, each with an audience of several thousands of millions of

users, their field of potential grows. By capturing our ‘home’, ‘car’ or ‘health’ data,

they can centralise and monitor the integrality of all our daily data. Finance,

shopping, deliveries, entertainment, etc.; they are all in the process of coming

together, fluidly and naturally, in order to achieve a better quality of life, but at the

same time to achieve recipient captivity.

This type of offer involves the creation of partnerships and therefore reserves its

share of interdependence. For example, Ford has an alliance with Walmart to develop

delivery services using autonomous vehicles, and has also gone into partnership with

medical centres to offer GoRide, a transport service for patients. These alliances do

portend their share of constraints. Numerous brands, from Sephora to Carrefour to

Best Buy, have joined forces with Google Home to place their orders via Google

Express and are subject to their commission. For its part, Walmart does offer the

means to disengage, to control its value chain.

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From an ecosystemic world in which historical split sectors havenow become linked, retail is becoming a multiverse world (multi-universe). Proposals are globalising to the point of all mergingtogether. It is the responsibility of each operator to find theirown value. Beyond eradicating the nomenclatures of theprevious century, the multiverse phenomenon is breaking silos,models and operating modes. In order to enter into our lives, newretail is changing the game. It is finding new loopholes,generating veritable Trojan horses, proposals of values asoriginal as they are unfinished:Echangeur has identified four gateways in everyday life:

Retail becomes multiversal

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Artificial intelligence, or at least algorithms, is shaping the world of tomorrow,

whether in business processes, e-commerce or physical retail.

Vocal recognition offers the potential to redefine the way we consume within our

digital universe, with the roll-out of multiple voice assistants: Google Assistant,

Amazon Alexa and even Tmall Genie…

Today, image recognition is combining with the development of voice interactions.

These procedures make it possible to define the frictionless customer experience that

Millennials are seeking.

Pinterest clearly displays its desire to turn the smartphone camera into a buy button

thanks to image recognition. Under the influence of Amazon or Alibaba, stronger and

stronger ‘computer vision’ algorithms are making it possible to redefine the format of

the traditional convenience store.

Shops which are able to play the automation card thereby become true hubs of

logistics. This automation is a dream for certain consumers who are horrified by the

thought of a queue in a supermarket. However, it is this same automation which

sends a shiver down the spine of employment politics and the employment market.

We are in the era of an evolutionary type of retail, capable of creating new concepts

combining online, offline, experience and logistics, to increase value creation. The

future is comprised of more than simply selling and distributing consumer items.

Brands must be able to seek growth beyond their core business. This is the case with

Ikea, one of the largest restaurant chains in the USA. It is even more the case with

Amazon, which is in the process of further extending its influence through the heart

of our home, thanks to its vocal assistant Alexa and its thermostat Ecobee.

New Retail & AlgorithmsThrough ultra-automation, retail is reinventing its points of contact and sales outlets.

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Smart Home & Health Health represents a weighty promise and touches on our privacy, both literally

and figuratively.

The global ‘Smart Home’ market is on target to achieve $123 billion between now and

2022, compared to $56 billion in 2018. The smart home infiltrates the daily lives of

consumers/citizens. Going beyond controlling the correct functioning of our houses,

the new technologies and operators which see our homes as ripe for the capture of

health-related data which will tend to our healthcare tomorrow are numerous.

Solution providers such as Apple, Philips, Panasonic and Withings in France, have in

effect achieved a technological maturity which allows them to preempt the world of

health. This maturity rests on an exponential number of connected objects. Their

objective is the widespread collection of personal data in real time. There are many

parameters involved: stress indicators, hygiene factors, quality of sleep, heart rate,

consumption habits, exercise level, etc. While these solutions are improving their own

performance, the FDA (Food Drug Administration - USA) is accrediting more and

more connected solutions for the benefits which they can bring.

This guarantee from the medical body opens many possible doors in favour of the

interference of the private sector into the field of health. Self-diagnosis and

optimisation of models of medical care indeed become necessary drivers to the

relieving of government budgets.

This is why Amazon, Apple, Philips and Tencent are in the process of developing

unprecedented prevention and support models, totally integrated into our new

everyday lives.

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Smart City & MobilityThe private sector, which occupies a little more urban space day by day, is reinventing the logistics of neighbourhoods and the lifestyles of their inhabitants.

According to ABI Research, by 2040, more than 65% of the global population will be

living in cities. This will mean a further 2.5 billion people searching for housing,

services and employment in already crowded urban centres.

Traditionally dependent on public government, the creation and management of

these cities is passing gradually into the hands of the private sector. Algorithmic

technological innovation and capital are plentiful, thus opening up a field of

possibilities.

With this in mind, many technology businesses specialising in artificial intelligence

will seek to automate everything which will make it possible to detect, foresee and

make decisions. Urban flows will thereby be optimised and will provide contextual

services.

With the congestion and pollution generated by car traffic, operators such as Baidu,

Microsoft, Ford and Amazon will find themselves involved with projects linked to their

business to a greater or lesser degree: reorganisation and monitoring of urban space,

development of autonomous vehicles, optimisation of the ‘last mile’...

Sidewalk Lab, an Alphabet subsidiary (Google’s holding company) represents the new

generation of architecture. It has been instructed to build, from A to Z, a new

neighbourhood in Toronto. In China, the government has assigned Alibaba the task of

creating the Smart City of tomorrow, thus being entrusted with the digitalisation, and

even the construction of entire cities. With this type of approach, the smart city

spawns intelligent subsets (vehicles, shops, hospitals, buildings, homes...) Everything

here is planned to facilitate the life of a citizen, which itself is enhanced through its

ambient connectivity.

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Gen Z & Parallel WorldsBypassing the Millennials, communities and gamers of the next generation are offering new playing fields.

Marketing teams have been struggling for 5 years to seduce Millennials. Very often,

this battle is lost by distributers, by lack of meaning, commitment, creativity or

simply because of the lack of a solid omnichannel experience.

Millennials are getting older. Some are approaching their 40th birthdays, and a new

generation is ready to take their place, with different expectations and unprecedented

norms. This new generation is called GenZ, or generation Z. With them, it no longer

suffices to speak about augmented or virtual reality, but augmented or computerised

perception.

These young adults and teenagers are short-circuiting established codes. They were

born in the digital ecosystem. They are the fruits of a love born in pop culture. Virtual,

parallel, altered, augmented, digitalised worlds are assimilated into their DNA... They

are for the most part, in our western societies, gamers. Girls or boys, they play on

consoles, phones and some even on PCs.

Their lifestyles are dictated by the technological world. They do their homework with

the help of voice assistants, find solutions to their problems on Youtube or Snap, go

on Instagram for long periods and then finish with Twitch to stream their wild Fortnite

or Apex Legends parties. They organise their social life not on Facebook, but on

Discord.

Marketing friends, make way for GenZ and their parallel worlds: they are the

multiverse generation!

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New Retail & AlgorithmsThrough ultra-automation, retail is reinventing its points of contact and sales outlets.

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Every year, the physical shop is announced as being dead, or at least faltering. Butevery year, shops keep going, are revitalised, even progress in some places. In reality,the physical shop model has been evolving over the last 10 years and it appears thatthe time for omnichannels may be reaching a maturity of some sort, to allow betweennow and the next 10 years a more fluid, transparent and augmented retail.

FRANCE: ‘GILET JAUNES’ AND PHYSICAL SHOPS; THE SYMPTOMHIDING THE AILMENT?

In France, as the gilets jaunes movement which began at the end of November 2018continues to rage on, city-centre retail and shopping centres are bearing the full bruntof these many demonstrations. The drop in sales for retail outlets was estimated at3.8% in December 2018 by the PROCOS Federation (federation for specialised retail).Worse than this average figure, some small businesses stocking perishable goodsexperienced a decline in turnover of up to 30% in December. Neither have e-commerce sites experienced any sort of boom to counterbalance this decrease inturnover. Their growth has remained at around 14% (FEVAD [Federation of e-commerce and distance selling]), representing around 9% of retail trade in France.

During this tumultuous period, we are bearing witness to a downturn in consumption.According to specialists within the PROCOS Federation, it began more than 5 yearsago, just after the repercussion of the financial crisis of 2008/2009. At the beginningof 2010, visits to shops dropped nearly 4% on average every year except 2017, onlyto drop again in 2018. In 2018, shopping centres also experienced a 1.7% drop innumbers of visitors. At the start, this movement was masked by the development ofonline distance sales. In reality, this dramatic shift which favoured certain pureplayers did not make it possible to redress all the consumption figures in France.

Faced with a huge increase in shopping centres in France over the past 10 years(there are now 39 million m2 rather than 31), it is likely that the dynamic is reversing,

with more shops closing than opening.

We will certainly see a purge on physical retail over the next 5 years in terms of town-centres, favouring pedestrians and public transport and limiting footfall into thebrands currently present in town-centres. The Action Cœur de Ville scheme, withfunds of €5 billion to revitalise the centres of 222 French towns, should, along withthe Elan law (Evolution du logement, de l'aménagement et du numérique [Evolution ofhousing, development and digitalisation]) go some way towards assisting withdistribution. Unless it is shooting in the dark, in view of certain prefectoral decisionssuch as that taken on the mammoth project ‘Europacity’ (a retail and leisure centrecomplete with ski runs in the north-east of Île-de-France); these decisions were madewith very little environmental consideration, and France is already largely covered byretail surfaces.

The mutation of retail will happen by choice or by constraints; New Retail is revolutionising

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RETAIL IN EUROPE UNDER PRESSURE

In the euro zone, the volume of retail outlet sales dropped by 1.6% betweenNovember and December 2018, 2.7% of which were non-food. Between 2017 and2018, the volume of retail trade increased very slightly by 0.8%, but for Germany,where it decreased by 2.2%, for Belgium by 1.2%, and for Sweden by 1.6%, it was notthe same story (source eurostat).

Despite this, not everything is looking great, particularly for the UK and Germany.Tesco, despite encouraging results at Christmas, announced the forthcomingredundancies of 15,000 employees in the UK, in order to optimise its costs andprofitability. Sainsbury and Morrisons experienced declines in their sales figurescompared with 2017. England’s Black Friday did not keep its promises fordistributors. It was supposed to represent 13% of annual retail sector sales but it willonly amount to 7.3%. English consumers in fact preferred to wait for the end-of-yearsales, and purchase at the last minute for the holidays. On a larger scale, this is thefirst time in 10 years that end-of-year sales have stagnated in the UK. In Germany,2,600 fewer jobs are expected to be created at Kaufhof. Even the pure players suchas Asos and Zalando have experienced difficulties, because the continuous strugglewith prices decreases their profitability. Asos, at the end of the year, revised itsprojected profits from 25% to 15%. Stock therefore decreased in value by 43%. In thesame time period, Zalando lost 18%.

AMERICAN RETAIL HAS SOME BREATHING ROOM

During the same period, it is not immediately apparent that American retail is feelingthe same pinch. At the end of the year (between Thanksgiving and Christmas), salesgrew by 5.1%, the biggest increase for six years (source Mastercard). These saleswere well-driven by e-commerce; 19.1%. American e-commerce which is stillgrowing, up 13%, is largely dominated by Amazon with nearly 41% of the marketshare in 2018 (Statista).

However, physical American retail is not out of the woods. Large shopping malls arestill struggling, with an average of 7% vacant stores, the 2006 average.

To illustrate this, despite a decline of 12% of retail rentals in Manhattan in 2018, theEchangeur team has never seen so many closed or vacant stores in Soho, theMeatpacking District or Times Square. These closures are greatly benefitting theUpper East Side.

This area has seen more than 16 stores open over the summer of 2018. Thecommercial real estate market is changing in New York; could this be the advent ofnew neighbourhoods dedicated to consumption?

But American retail is not limited to New York. And it will experience a real crisis ifFMI’s US recession predictions for 2020 become a reality. As indicated by Moody’s,the shortcomings of retail trade are continuing to increase, and its rating on the retailsector has therefore fallen from positive to stable in 2018. Moody’s forecasts thatAmerican e-commerce will represent 20% of total retail between now and 5 years.

Neiman Marcus, Sears, Nine West, 99c, J.Crew, Cole Haan, Claire’s, Steve Madden,Aerosole, Crocs, Toms and GNC are all brands on the list of 26 brands identified byUSA Today as being liable not to see the end of 2019. Moreover, in 2018, Walmartclosed 63 Sam’s Club stores, Foot Locker closed 100 stores, Kmart 160 stores andGap/Banana Republic 200 stores...

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In addition, 51 million American households are in financial difficulty. The middleclasses, who previously spent their days having fun at shopping malls and tradecentres no longer have the means to consume as they once did. American retailneeds to prepare itself for a whirlwind in these next 2 years. This whirlwind willrequire retailers to be agile and flexible. The ensuing tidal wave will require thatdistributers review formats and optimise processes in order to survive the economicchange which is well on its way. The hybridisation of stores in the image of Alibaba'sNew Retail could be a response to the optimisation of the O2O experience. Retail canalso seek new income thanks to its audience.

WHEN THE MADE IN CHINA NEW RETAIL WAKES UP!

On the other side of the world, in China, Alibaba is breaking record after record insingle day sales (11th November); after $25 million in 2017, the $30 million thresholdwas passed in 2018! A Chinese e-commerce, which in 2018 grew to more than $636billion, which was 19% more than 2017. An Alibaba which also launched the ‘NewRetail’ concept, with the aim of eliminating any friction between online and offline forthe benefit of the consumer.

A consumer at the heart of this new retail initially proposed by Jack Ma. Data,artificial intelligence and logistics technologies are key elements in this type of retail.Automation is queen in these new shops, whether at Tmall Supermart or Hema Fresh.These shops evidently exploit advances in image recognition and artificialintelligence.

The physical shop is also becoming a ‘last mile’ logistical hub for e-commerce. HemaFresh delivers to customers living within 3 km of the store within 30 minutes. And inthese shops, the smartphone is the access key to a frictionless, service-based buyingexperience.

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Furthermore, stakeholders in Chinese retail trade such as Suning and JD.com are

also following the same strategy as Alibaba, which was shown just as well at CES

2019 as it was at NRF 2019.

But Chinese e-commerce is quite simply buzzing since the strong increase of social

shopping on mobile apps with XiaoHongShu or ‘Petit Livre Rouge’ [Little Red Book]

(nothing to do with Mao’s book of quotations) which targets women between the

ages of 18 and 34 who are seeking luxury products, cosmetics, fashion accessories,

clothing, food supplements, travel advice... This social shopping app makes it

possible to buy foreign products which normally would not be easily available on the

Chinese market. The apps have more than 60 million users, who all contribute to the

content of the shopping app by sharing photos, commenting or providing reviews. It’s

like a mix between Tmall, Instagram and Pinterest. This is reminiscent of the Wanelo

app in the US which we mentioned 4 years ago (but which never really took off). Little

Red Book, through its social dimension, has become the ultimate tool for young

Chinese consumers seeking reassurance. They need to be able to find their way

among a multitude of foreign brands, and avoid fake luxury brands or counterfeit

goods.

Using the explore feature, users can discover new products or access information

about a product that they want to try. With Nearby, users discover places,

restaurants, and shops in their surroundings recommended by the community. Then,

thanks to the purchase feature, they can buy the products they want directly from

brands and stores which are recognised and validated by the app and the community.

All the success this app is having comes from the Key Opinion

Leaders (KOL) who provide the necessary credibility to the

content posted. Several cosmetics brands have formed

partnerships with Little Red Book in order to be able to better

reach this marketing target of women between the ages of 18

and 34. Luxury brands are mentioned very regularly. We

therefore saw Chanel quoted 2.2 million times in 2018. The app

even serves as a shopping guide for Chinese nationals

travelling in Europe or the US. It is therefore of the utmost

importance to be within the Little Red Book ecosystem if you

want to make the leap into the Chinese e-commerce market.

Whether on the physical or online retail trade level, the Chinese

market is in continuous development. The Chinese consumer

needs to be reassured about the quality of the items they are

purchasing, hence the importance of a physical presence and a

network of well-known influencers. These two drivers impact

the market and offer the opportunity for sales to take off. It

seems today that new codes of commerce, whether online or

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RETAIL MUST ENGAGE BEYOND DISTRIBUTION

With regards to US retailers, the omnichannel strategy is already establishing itself,

but is only offered by 2/3 brands; this was evidence produced by Forrester after its

annual study on American retail at the 2019 NRF. There is, therefore, a huge amount

of work to be done in this area by American retail. This is particularly evident in online

reservation and in-store collection, available for only 30% of surveyed brands. With

regards to delivery of e-commerce orders to lockers, only 2% of retailers offer it...

Concerning the use of artificial intelligence, the Forrester study demonstrates that

marketing automation is a real priority, as is B2C image recognition. Also relevant

are the optimisation of marketing via the use of robots providing shelf-space surveys,

the optimisation of purchasing services thanks to algorithms predicting trends, and

even logistical optimisation...

But the future of retail goes beyond the simple sale and distribution of consumer

products. Brands must be able to seek out new growth areas beyond their core

business, just like Amazon, whose profitability is centred around Web Services.

Incidentally, Ikea is one of the largest restaurant chains in the USA. The Swedish

giant can now open a restaurant without any need for having an actual store close by.

And especially an operator such as Walmart, which receives 300 million visitors per

month; it could monetise this audience to advertisers in a more relevant manner, to a

very large extent. Comparatively, in the USA, Google has 240 million visitors per

month, Facebook and Amazon have 200 million, and their advertising turnover is

huge!

And what if the future of retail used a different business model, the same as that of

GAFA? These companies have been able to grow their income over the past 20 years

by valuing their audience…

Faced with the issue of vacant premises, these requirements for experience and

closeness, there are solutions for retail trade. These solutions are being offered by

The Store Front, which is styling itself as the Airbnb of commercial premises. For its

founder, Mohammed Haouche, the future of physical retail lies very clearly in its

flexibility.

It is no longer about having the biggest shops, but about having the one which offers

the best experience. The pure players who are opening ephemeral shops have clearly

understood this: opening a physical store can generate up to 30% more traffic on the

e-commerce site. Retail must grab this flexibility in order to create new concepts,

mixing online, offline, experiences and logistics with the aim of creating a new retail.

‘New Retail’ made itself known in China with Alibaba.

This mutation of retails trade is well illustrated by Antoine Salmon, Director of Retail

Rentals at Knight Frank France: “We are in a protean era of inter-enterprise

collaboration, of commercial innovation. Shop-in-shops, pop-up stores, showrooms

and brand boutiques, brand associations.”

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In our time of artificial intelligence, of automation and digitalisation of the world,technologies are emerging from everywhere. But only a few are changing the game intrade and retail. This renewal of retail demands connectivity, an unprecedenteddigitalisation of the physical world and a strength of incalculable force to manageand deliver the ultimate consumer experience of 2025!

5G IS FINALLY ARRIVING IN 2020 TO CHANGE THE PARADIGM OFCONNECTIVITY

We spoke of the forthcoming arrival of 5G in our 2017 Commerce Reloaded report,including the changes it will bring in terms of broadband speed (10 times faster) andtransmission delay (decreased tenfold).

While in France the full-scale 5G pilots tests will take place in 2019 and thecommercial launch will in 2020, the US and China are vying with each other in a race,the likes of which has never been seen before; the installation of 5G infrastructures.

The arrival of 5G is a new opportunity for China to have an impact on the UShegemony in the digital world, and more importantly, on global economy. To rise tothis challenge of installing the equipment first, the American private sector will haveto invest more than $275 billion. It is particularly about investing in infrastructures inorder to respond to the threat from the Chinese. Since 2015, China has effectivelyinstalled more than 375,000 new mobile compatible sites, while in this same timeperiod the USA has installed a mere 30,000 antennas. Currently, China is deploying5G infrastructures 12 times more quickly than the Americans. The FCC (FederalCommunications Commission) has greatly reduced regulatory constraints in order toallow telecommunication operators to bridge this gap. At the same time as theartificial intelligence war between China and the United States, the connectivity war isalso rising up between the two countries.

Behind 5G and the pleasure of accessing Netflix more quickly, it is about offering anunparalleled connectivity and responsiveness to the industrial world! During recenttests, 5G has made it possible to connect more than a million devices over a surfacearea of one kilometre squared. With 5G, farm monitoring will change completely,optimising the production of food and automating the role of the farmer. Autonomousvehicles and eVOTL (flying cars) will only be possible on a large scale with 5G .According to Verizon and The New York Times, a new style of journalism may emergewith the advent of 5G. It would consist of an immersive journalism with 3D imagesand 4K 360 degree videos directly embedded in the articles. It is also a great help forthe NY Times marketing teams, assisting in better locating their readers and pushingtargeted content such as Netflix in real time.

From New Retail to augmented retail, which technologies should we follow over the next 10 years?!

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This advent of 5G, still relatively discreet last year at the CES, was much more visiblethis year, present on the Qualcomm, Intel and Samsung stands.

Making technologies such as virtual or augmented reality available to everyone isalso dependent on 5G via cloud access. 5G thus makes it possible to move into amobile and/or stand alone virtual world with a link to graphic and IT resourcesthrough the cloud.

VIRTUAL AND AUGMENTED REALITITES IN A TRANSITIONAL PHASE, NOTA DEMOCRATISATIONAL PHASE

Realities are superimposed, altered, virtualised, augmented, manipulated... butwhat’s hiding behind the buzz?

Virtual reality found its niche in B2B

A CB Insight report revealed that VR headset sales collapsed in 2018, mainly due tothe arrival of VR headsets for smartphones, like the Samsung Gear VR. While thiscategory of equipment generated 8 million sales in 2017, only 3 million copies weresold in 2018.

The total number of VR headsets sold in 2018 will be less than that of 2017.However, CB Insight predicts a less sombre future for the virtual reality market. Interms of cable headsets such as the Oculus Rift, the HTC Vive or VR PlayStation,analysts forecast 5 millions units sold in 2019 and 18 million in 2022. This growthmay be due to a drop in price and an improvement in technology. The boom in virtualreality could be borne from the autonomous category of VR headsets such as theOculus Go or the Oculus Quest. The Oculus Go has been available since October2018. Between now and 2022, CN Insight predicts 29 million sales in this productcategory.

Compared to that of smartphones, the price of VR headsets is not yet on the path ofaccessibility to everyone. Today, virtual reality is mainly used in B2B, specifically intraining. This, incidentally, is what Walmart used it for at the end of 2018.

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The American giant Walmart wants to make virtual reality the future tool

of professional training. For this reason, it intends to buy more than

17,000 Oculus Go headsets between now and the end of the year, to

provide them for all its stores in the United States. They will train the

million employees who work there. Every ‘Walmart Supercenter’

supermarket will receive four headsets, while the ‘Neighbourhood Market’

and ‘Discount Store’ outlets will receive two.

The aim is to is to provide Walmart Academies training to each and every

employee. The software part of this event is provided by Strivr, and

comprises 45 modules built around specific activities. For Andy Trainor,

director of Walmart US Academies. “When you view a training module

through the headset, your brain believes that you are really experiencing

that situation. "We have also observed that virtual reality learning builds

confidence, strengthens the retention of information, and improves exam

results by 10 to 15%.

Smart glasses in the learning phase

Differing to virtual reality, mixed reality glasses do not have screen, but a transparentvisor onto which are projected virtual elements which appear in 3D. These thereforeseem to be within the user’s actual surroundings, appearing as holograms.Sometimes, a virtual reality headset equipped with a camera sending images of thereal world can be used to create MR (Mixed Reality). Today, two headsets/smartglasses dominate the MR market: Microsoft Hololens and Magic Leap.

There are other types of smart glasses. Their purpose is to integrate mixed reality.Examples are Vuzix, Meta, North Focals, ODG and Daqri. But their quality in thescreening of digital content remains for the moment inferior to Hololens and MagicLeap, except perhaps Daqri whose target audience is industry.

The television and sports experience we were able to enjoy on Magic Leap was simplystunning in terms of the quality of content and its relative ease of navigation, unlike aHololens. However, this first version of Magic Leap requires improvement in comfort,because the heat of the headset quickly dries out one’s eyes, which then begin tosting. We are impatiently waiting Microsoft’s answer, in the form of Hololens 2, in2019.

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While the mixed reality market was estimated to be worth around €700,000 in 2015,forecasts for 2020 hover around €15 and 34 billion. Since its explosion in 2017, thishuge growth has been encouraging companies to take their first steps in engagingwith this new technology. A fledgling technology that some experts such as RobertScobble believe may replace computers, and perhaps even the smartphone such aswe know it.

The fantasy of smart glasses and of mixed or augmented reality has been persistentfor nearly four years now. And this fantasy is becoming tangible, thanks to Amazonand its investment in the Canadian start-up North Focals. It presented its concept ofholographic projection onto the lens of a pair of glasses during the CES and in itsBrooklyn-based store in New York.

This in-store experience is in fact reminiscent of that of Normal and its 3D-printedheadphones (a brand which has since closed). North’s glasses remind us of GoogleGlass 4.0, with their number of necessary improvements. Indeed, 20% of peoplewould not think of purchasing the custom-built glasses (the gap between the eyeshindered visibility of the contents projected onto the glass).

These glasses are apparently linked to Amazon Alexa. Their users can accessAmazon services with their voice. According to North, this first version probably hasroom for improvement, but at $999 it is accessible which is an advantage. Thisversion will make it possible for the brand to test the use of the glasses on a largescale. And this is only the beginning: a doctor found the ideal usage for the glasses

straightaway, as they made it possible to take notes and quickly view them duringappointments with patients.

AR Cloud’s promises to rescue augmented reality

Augmented reality experiences are lonesome ones these days. This limits socialexperiences and exchanges of augmented reality solutions between users. The ARcloud and its benefits for AR were mentioned by Ori Inbar for the first time. Ori Inbaris the founder of an investment fund (Super Ventures) in virtual reality and also co-founded augmentedreality.org. His objective is to make AR use accessible toeveryone.

The AR Cloud concept is to create an interaction system between devices andplatforms by pooling content and calibration tools (link between digital and reality).This infrastructure will connect AR apps with the real world, achieving a trueinteroperability. To do this, a universal system of calibration/positioning must becreated. This system is composed of a digital representation of the real world and areality recognition and monitoring tool. 6DOF mobility (movement of a body through3 dimensions) must also be integrated. All of this will then be utilised together byaugmented reality apps instead of having a separate system for each app.

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The new generations of smartphone, such as the IPhoneX or the Samsung S9,

smartglasses such as Hololens and Magic Leap will make it possible to scan the real

world, thereby nourishing the AR Cloud. Thanks to the impending advent of 5G, the

recognition of these digital elements and the real world will be able to happen in real

time despite the great volume of data needed. Between scans and contents, a copy of

the real world capable of superimposing in real time onto reality has now become

possible: it is the AR Cloud.

JYC, an Echangeur partner, is working on the development ofan inter-operability solution in augmented reality (AR) whichwill allow the creation of multi-player experiences and thesynchronisation of positions of players and virtual objects inreal time, whether they are in the same space or at a distancefrom each other, whatever platform they are using. Thisapproach has the advantage of working on a telephone or atablet, iOS or Android, one or more of which most of the generalpublic already own, but also on AR headsets such as the MagicLeap or the Hololens.

These multi-player experiences in augmented reality functionlocally, in proximity to friends and colleagues, and allow, forexample, the creation of collaborative tools in real time withaugmented reality objects, the group viewing of products,places and 3D models, and any other type of multi-playerexperience.

Furthermore, the majority of companies which haveexperimented with this type of tool observe an increase inproductivity. Historically, multi-player AR experiences wereoften limited to just one platform, which did not make themeasy for a large number of people to access: a brand wouldoften have to choose between creating a complex AR solutionin a headset, destined for a trade fair for example, but whichneeded specific equipment, or creating a mobile app destinedfor the general public. We have therefore developed a simplesolution in order to be able to create immersive multi-playerexperiences compatible for all platforms, whether that be aniOS or Android mobile or tablet or an AR headset.

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Regarding the content, either the giants of technology must standardise their contentto make it useable on numerous types of equipment, or an open source system isimplemented and maintained by developers. Content, in both cases, becomesuniversal and exploitable whether smartphones or the headsets are used.

The AR Cloud is in its infancy, it can be compared to QR Code in 2008 where a dozen2D coding systems and a reader existed.

But Charlie Fink (consultant/author on AR) best describes what the AR Cloud canallow: “The World is about to be painted with data”. But beware, because with the ARCloud there will be only one digital world; content locations will rage.

Today, the AR Cloud is a promising concept for augmented reality but it remains foreverything to be built. First and foremost, AR operators will need to feel a desire toshare, or each one will continue their own little story in their own little corner...

From a retail point of view, this will mean that the augmented reality content from astore like Ikea will be able to interact with, for example, that of a property developerthanks to interoperability. The AR Cloud rally can create an entirely new userexperience. The future of AR in our daily lives will certainly depend on the AR Cloud.This is why Niantic, creator of Pokemon Go, has invested hugely to create thisecosystem.

Towards a new internet

Could AR, VR or MR redefine the platitude of the Internet? Thanks to virtual reality,the internet could become a entirely virtual world in the style of the film Ready PlayerOne. Internet sites could become 3D places. Such a concept is reminiscent of SecondLife, which had covert success around a decade ago.

In 2017, Google also launched the WebVR concept which made it possible toexperience VR from the browsers Mozilla Firefox and Microsoft Edge, and Oculus andSamsung Internet for Gear VR via a API Javascript.

Also in 2017, Mozilla announced WebXR, a new development programme for mixedreality on the internet. This programme aims to allow the use of virtual reality via theweb as well as augmented reality. An iOS WebXR Viewer app allowing the viewing ofexperiences created with WebXR was also launched.

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In January 2018, Google also unveiled its WebAR project which aims to integrateARCore functionalities into the web browser Chrome for mobile and desktop. Thiswould allow virtual objects to be created in 3D and for them to then be directlyintegrated into internet sites. This provides the advantage of overcoming the need todownload a mobile app. This is the same today for Safari and AR Quick Look on iOS12 since July 2018. The convergence of VR, AR and MR content on internet browsersis in itself a good thing in view of the profusion of ecosystems and the dilution of ARcontent via mobiles. These tools could completely change the way that internet usersbrowse and consult the content on the internet, by giving them volume andinteraction with the environment.

The world of AR/VR/MR is consolidating, finding form and advancing, to perhapschange the face of tomorrow’s internet.

THE FUTURE OF OMNICHANNEL RETAIL IS VOCAL

Voice assistants have been booming for 3 years, mainly thanks to the success ofsmart speakers Amazon Echo and Google Home. Furthermore, whether at WebSummit 2018, SXSW2018 or CES 2019, the question on everyone’s lips was Alexa orGoogle Assistant. However, we must be clear and remain measured. The artificialintelligence of these assistants in 2019 in the equivalent of the internet in 2008...andthat is only the beginning!

These assistants are not new: Siri arrived in 2011 on iOS to assist iPhone users, witha capacity that was ultimately limited to telling them about the weather or making aphone call. But since 2014 and the arrival of Amazon Echo and its voice assistantAlexa, everything has sped up. Today, two voice assistants are locked in a fiercebattle: Amazon Alexa and Google Assistant. The opponents exist in several hundredmillions of devices (Smartphone, Speaker, Car...) throughout the world. GoogleAssistant will be present between now and the end of 2019 in more than a billiondevices. The influence of Amazon and Google on voice assistants is such thatFacebook has integrated Amazon Alexa into Portal+, its intelligent screen/speaker.Facebook is also working in its research centres on its own voice assistant. The factremains that while we wait for the availability of this, Alexa will be doing the work.

Via these vocal hubs in consumers’ residences, the objective of these technologicalgiants is very clearly to become the centre of their digital lives, of their consumption,or even simply of their entire life by becoming the universal platform. They are also afantastic tool for aggregating new data on the life habits of their users.*

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Always the loudest voice

Sales of intelligent speakers have been booming since the end of 2017, and that’s

just the start,

According to a study (carried out in France, the US, the UK and Germany) by Cap

Gemini, 50% of people questioned had already used a voice assistant at least once.

The vast majority used it via their smartphone (81%) and 25% owned an intelligent

speaker. Shopping was an integral part of the users’ voice assistants, as 35% of

people had used them to buy products or services. These same users stated that they

used voice assistants for 3% of their purchases. They believe that between now and 3

years, their voice will make 18 to 20% of their online orders.

The voice will therefore significantly change the retail of tomorrow. Brands and

chains, prepare yourselves!

The voice of retail

Today, several dozens of American and European retailers, from Best Buy to

Carrefour via Sephora, make it possible for their customers to order via Google Home

and their voice assistant. Sales via voice is operated by Google Express. Google is

paid by taking a commission on sales made on its Google Express platform.

Walmart was one of the forerunners, along with Target, forusing Google Express in October 2017. The American giantpulled out of the programme at the end of January 2018. It istherefore no longer possible to order Walmart products viaGoogle Home. This withdrawal is certainly linked to Walmart’sgrowing strength in American e-commerce. A growth of 63% forWalmart, which brought its market share of American e-commerce to 4%. To do this, Walmart renewed its e-commercesite and also invested in software with numerous online ordercollection points in-store or via lockers.

In May 2018, Walmart had already terminated its partnershipswith Lyft and Uber for delivering customers’ orders. Walmart,assured of its fighting force, appears to want to control thevalue chain of the likes of Amazon. So although numerousretailers are becoming involved with Google in order to buildstrength against Amazon, Walmart is going against the flow. Adifficult pill to swallow for Google..

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Google will soon offer transactions directly within its partners’ voice apps. As withGoogle, purchasing via Alexa applies only to products sold by Amazon and not via theskills of external partners. Apple, meanwhile, missed the Smart Speaker sandstorm. Itwill soon be possible to pay with Siri too, with a payment system using Apple Pay.

These new practices do bring up certain questions, notably:

• Going into partnership with Amazon or Google; is this not selling one’s soul tothe devil, and becoming even more dependent on these giants to generatemovement of traffic towards your brand?

• Amazon and Google only share textual data via voice or skill assistants but notaudio data... What happens to the voice data of emotions and tone in thedemands placed to voice assistants?

• The choice of voice with Google Home and Amazon Echo remains limited; it istherefore the voice of Amazon or Google which speaks every brand’s message.What impact will brands have in the future via these hubs?

• When a consumer requests batteries from Amazon, 60% of the time Alexa willprovide Amazon basics. What therefore, will become of Energizer or Duracell?

• How should your SEO be reworked by integrating the voice and thus the ‘richsnippets’? In SEO, a snippet is often the text that serves as a summary of thewebsite and appears in Google to respond to the search of the internet user.

Brands and chains do not, it seems, really have the choice of whether or not to workwith Amazon or Google, because the former’s audience is to be found in the latter’svocal ecosystem. Still in the early stages of discovering, retailers and brands mustrapidly acquire voice experience and perhaps also think about creating their ownecosystem, most of all when Walmart has as many monthly visitors as Google.

However, shopping by voice in terms of product discovery is quite complicated. Thereis a need for visual support to assist the audio message and reassure the consumerthat they are making the correct choice. This is why Amazon has launched intelligentspeakers with screens such as the Echo Spot or the Echo Show. This approachremains insufficient. It is symptomatic of the necessary visual support when the useof voice assistants can today be deceptive in numerous perimeters. We are actuallyin the early stages of a new form of ambient relationship. This disintermediatesdevices, bypasses certain stages and implies an assimilation of the imagination ofthe brands without going through traditional reassurance.

It generates and implies unprecedented tools for new types of consumer: GenZ,experts in immaterial and virtual environments.

The voice beyond assistants

Voice marketing is focused on voice assistants, however, whether it’s at the NRF orthe CES, the voice goes much further afield. Companies such as iFlytek offer instanttranslation solutions.

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To do this, all that’s needed is a dictaphone, which is responsible for translating yourwords into the language of your choice, and will make it possible for you tounderstand what’s being said if you are travelling abroad or if you have a Russian orChinese customer in your boutique. This an absolute blessing for certain retailers orcar dealers who find themselves confronted with customers who speak neitherFrench nor English. These translators were present in droves at CES 2019 whether ona Eureka Park level with its start-ups or on a more developed Tech East level.

The ‘Voice-First’ revolution, made possible by the GAFAs, is permanentlytransforming the customer experience. The voice is the most natural, most intuitiveand most effective user interface. The voice, as a new user-experience, allows you tocreate a much deeper emotional relationship than with a keyboard or screeninterface. The voice, like a spokesperson, becomes a strategic and integral part ofcompanies’ digital brands. Thanks to voice technologies, brands can have unique,high-quality, context-specific voices: with well-chosen words and the right tone, theyare better able to capture the attention of their customers.

One of the better examples comes from Voxygen, which has created brand voices forSNCF (e-Mone), EDF, Météo France, Orange, and Bouygues, as well as numeroushumanoid robots providing SNCF announcements.

SNCF is a true pioneer of Brand Voice. In the early 1980s, SNCF decided to useSimone Hérault as its unique voice. Every day, clear and warm messages welcomemillions of travellers, informing them and comforting them. E-Mone, the digitaldouble of Simone's voice, transforms text into expressive speech and perpetuatesSNCF's vocal identity.

E-Mone has the gift of ubiquity. It is available on multiple channels: real-timepassenger information in stations, accessible on terminals and ticket machines, or inSNCF's Interactive Voice Servers (IVS).

The voice is also my consumer footprint

Clearly, users can activate voice recognition on their voice assistants in order to berecognised and to limit, for example, some functions or access to apps depending onthe individuals living in a household. But this goes well beyond simple recognition.

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Voice assistants are equipped with microphones and are therefore always listening;they recuperate data other than the voice from sound waves. Indeed, measuringsound waves makes it possible, via algorithms, to determine the volume of a room,the number of people in a room, the stress and the emotions felt by the users, themental state of the speaker, the materials used for the walls and even the electricitycables in the room... Likewise for earphones (Air Pod or Pixel Buds type) according toPoppy Crum, R & D manager at Dolby Laboratories; they make it possible to connectto the inner ear and pick up physiological signals such as stress, heart rate, mentalstate, spatial balance, attention... and even potentially connect to the optic nerve.

Such a connection thus makes it possible to decipher where the human is directingtheir gaze. One can therefore imagine what a malicious technology operator couldfind out, thanks to in-ear headphones connected via Bluetooth to a telephone: thegeographical position and therefore the surrounding billboards, the direction of aperson’s gaze and their emotional state. Then, depending on the emotional statewhen the gaze is directed towards advertisements, this operator will know the impactof the ads... and that evening will target the individual according to what they saw inthe street... not very GDPR... For the moment, this scenario is a pure invention, but itremains technologically possible in the near future, as it has already beenfundamentally researched.

Once again, voice retail is not the Millennials’ priority, but is certainly in the DNA ofGenZ in their quest for virtual retail.

IMAGE RECOGNITION AT THE HEART OF RETAIL AUTOMATION

Historically, image recognition solutions at CES and NRF were often linked to securityand to behavioural analysis at point of sale. But for two years, this technology basedon the utilisation of algorithms and machine learning has been in full swing. It’sAmazon GO’s fault! Indeed, this new definition of the physical shop with no till hasmade image recognition the focus of the retail of tomorrow.

Towards a new store

Consequently, at NRF 2019 from Intel to Amazon Web Services passing via TheInnovation Lab, image recognition shopping solutions were proliferate. It seems thatAmazon is in the midst of redefining the concept of customer experience in physicalshops thanks to its ‘Boundless Store’.

The concept is still the same: cameras which scrutinise the slightest movement.While the 2018 solutions were still yet to be perfected, those of 2019 are much moreadvanced and ready to be launched onto the market. However, building a frictionlessstore at Amazon Go requires a camera on average every 1.5m/2m. These camerasare separate to security cameras for privacy reasons.

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At the Intel stand, it was the Alibaba Cloudpick solution which was brought to thefore. Once again, the global e-commerce operators controlling the technologicaldimension are those who provide a flavour of tomorrow to today’s traditional brands.Access to the shop is gained via Alipay. Once the customer’s chosen product hasbeen taken from the shop, Alipay charges for it. This solution is at the momentexclusively for small, local stores.

The same applies with Aifi, AWM and Zippin and their concepts of cashless stores.Aifi announced that their Nanostore concept, shown at the NRF, would be deployed inPoland with Zabka. AWM has added additional security on entering the shop withfacial recognition. And Zippin promises a return on investment after 6 months. Eachhave their own particularities, but ultimately, each one is offering themselves as aresponse to Amazon Go!

This idea of a shop reinvented without a till, is also translating across to the shoppingtrolley. This is certainly not the first time that intelligent trolleys have been shown,whether it be with RFID readers, scanners or integrated cameras which identify theproducts placed in them. However, with Caper’s solution, the trolley takes on anotherdimension. Caper has equipped its trolley with a camera which recognises products’packaging, a barcode reader, an RFID reader, and also with a set of scales, whichmakes it possible, as at self-service tills, to link the scanned product with its weight.This also works with fruit and vegetables.

Payment is made on the trolley’s dashboard.. If payment is not made and thecustomer leaves the shop, an LED at the front of the trolley remains red and turnsgreen once payment is effectuated. The device also offers the capacity of freezingthe trolley’s wheels if necessary.

Image recognition is also very useful for analysing retail shelf planners andmerchandising in shops, whether that be with robots such as Bossanova or dronessuch as Pensa Systems. This is an autonomous drone which will be able to flythrough the shelves to take photos and identify pricing errors or out-of-stock items.

Once again, technology is at the service of point of sale performance optimisation,and is tending more and more towards operation automation.

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When the camera changes into a purchasing button

Whether it is Pinterest with Lens, Snapchat with Visual Search or Google Lens,

numerous operators in the digital field want to change smartphone camera buttons

into purchasing buttons. A photo provides enough to recognise a clothing style, a

product, or a travel destination. Welcome to the Shazaming of the world!

Snapchat has developed a partnership with Amazon for its Visual Search

functionality. By taking a photo of a shoe or a perfume on Snapchat, the user will be

redirected to the product page in Amazon and will then be able to buy the product in

just one click.

Google’s strategy is similar since Google Lens is directly integrated in the voice

assistant on mobile Google Assistant. At CES and NRF, a company well-known to

Echangeur, Syte, made a great impression with its image recognition solution on the

Microsoft Stand in New York.

Syte will have the capacity to disassociate the elements of a photo. This means that

by taking a photo of a person the app will be able to recognise shoes, clothes,

accessories, potentially jewellery and suggest identical or similar products.

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There is no longer any need to introduce a display window with mannequins into aclothing shop. This type of technology also works on videos with Cotexica, forexample. Everything becomes interactive and buyable thanks to image recognition ona mobile.

Image recognition solutions are defining the shopping technology of tomorrow,whether that be online or in physical stores. It seems, moreover, that one of the keysto the activation of these services is via facial recognition, whether that be to enter ashop or to pay online. This is consistent with a movement that we make without evenrealising: unlocking our smartphone with facial recognition. Voice and image aretherefore key in researching the products of tomorrow! Additionally, for Gartnerbetween now and 2021, the brands which rethink their e-commerce site byintegrating voice recognition and image recognition will see their sales increase by30%!

THE FANTASY OF QUANTUM COMPUTING

Our personal and professional computers are all equipped with processors, which aremade up of transistors. According to Moore’s Law, the size of these transistors tendsto decrease by two every 18 months, which means that by the end of 2020 they willbe size of some atoms. In the long term, other types of microprocessors areexpected: processors based on the quantum properties of particles such as electronsor photons.

It is very complicated to explain quantum computing as it is comprehensible to only afew scientists throughout the world. Disregarding this fact, here is how we couldexplain (even if it is simplistic and erroneous) this new computer that is based on thequbit.

While a silicon processor is based on the bit which understands 2 states (1 or 0) toperform a calculation, a quantum computer will be based on the qbit whichunderstands 3 states (1, 0 or both superimposed). It is the superimposition of thestates which explains the qbit’s power of calculation compared to the bit’s. Atinitialisation the qbits are in state 1 and 0 at the same time, they are superimposed.On reading them, we obtain one of two states with a certain probability; thisprobability is much higher for the correct result (99.9%) The whole value of thissystem is to use superimposition of the states during the calculation. Reading byprobability explains the calculations’ margins of error indicated by the developers.

A 4 qbit computer will therefore have a calculation strength 16 times higher than acomputer with 4 bits. With the addition of each qbit, the strength of a quantumcomputer is doubled compared to a classic computer.

However, so that it may function, qbits must not undergo interference from theoutside world. If this were to happen, this could change their state and therefore theresult of the calculation. This is why quantum computers are isolated from theoutside world and frozen to a temperature close to absolute zero. However, quantumcomputers carry out calculations with a greater or lesser margin of error. Theseerrors come from the interaction of the qbits with their environment; today, a marginof error of between 0.1% and 1% is acceptable.

Today, qbit research is being conducted on several levels. Indeed, there aresuperconducting qbits (used by IBM, Google and Intel), trapped ions (the University ofMaryland), electron spin (CEA/CNRS, Intel...), Majorana fermions (Microsoft),topological (Nokia)...

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During CES 2019, Ginni Rometty (CEO of IBM) explained the advances that have beenmade with the IBM Q System One quantum computer, whose marketing is notcompletely ready, contrary to what was announced in many press articles prior toCES 2019. This computer is equipped with 20 qbits.

At the same time, Google unveiled its 72 qbit quantum computer with 0.5% to 1%margin of error, which it has called Bristlecone. This computer is therefore morepowerful than our current supercomputers (capable of simulating 46 qbits). The truepotential of quantum computing will be unlocked when computers are equipped withthousands, even millions of qbits. For Google, the quantum computer must have 100million qbits and an margin of error of 0.01%.

IBM Q SYSTEM ONE

Initially, it will be more partnerships than marketing through a network. The objectiveof the Q Network is to make it possible for IBM to master this technology. To achievethis, a network or private partnerships and universities has been created in order tounderstand the subtleties of quantum calculations. In the United States, IBM isworking with JP Morgan, Chase and Daimler to resolve algorithm problems.

On the 6th December 2018, IBM announced the installation of its quantum hub inFrance in partnership with the University of Montpellier; it is called the IBM Q Hub.This hub will work on the use of quantum computing for chemistry, finance,aeronautics and of course artificial intelligence...

In terms of its usage constraints, quantum computing will be marketed via the cloud,depending on the quality of the data it will be using. This access will need a high-speed broadband connection, and the arrival of 5G will allow the democratisation ofthis new era between now and 5 to 10 years.

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Forget Big Data, move on to Deep Data

It is easy these days in our digitalised societies to accumulate

astronomical volumes of data, but are they useful and useable?

According to Trillium, sometimes data scientists can spend up

to 90% of their time cleaning the data that has been collected.

For Ginni Rometty only 1% of data issued is analysed. The time

of collecting nothing but Big Data is finished. We must move

onto the collection of value-added, easily useable and

actionable data, and this is what’s called Deep data! One of the

best cases of Deep data usage was presented by IBM and Ed

Bastien, CEO of Delta Airlines at CES 2019. Delta’s objective is

to use the data collected by IBM to offer their passengers the

best possible flight quality, by which they mean with the least

turbulence. To do this, Delta is relying on IBM’s new weather

forecast tool.

This new forecast system is produced thanks to the data

collected by Delta’s planes which are mid-flight, but also by our

smartphones on the ground.

This data is then analysed and utilised by IBM’s algorithms to

refine weather forecasts and thus optimise flight plans. Thanks

to this new data and this model, Delta has also been able to

considerably reduce delays and cancellations of flights due to

bad weather. Data therefore comes into its own when efficiently

serving business. Another way to use Deep Data at Delta is for

maintenance of the aircraft fleet. Delta has implemented a

system which uses aircraft data and an algorithm predicts the

forthcoming maintenance requirements for each plane, which

has allowed a reduction in flight cancellations or delays for

technical reasons from 56,000 in 2010 to 55 in 2018.

But beware, because as much as customers want

customisation, they are also concerned about retention of data

by retailers or technological operators. Effectively, they want

something in return. Once again, Delta provides the example

with its new facial recognition registration system. This

eliminates the need for showing plane tickets or a piece of

identification for US internal flights in order to ease aircraft

access while retaining a level of security. Data regarding

travellers is also sent to flight attendants to improve business

class service, thereby fulfilling flying customers desires.

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The technological world is awaiting 5G, the AR cloud, and in the longer term, quantumcomputing. These technologies will define tomorrow’s world, from the smart city toretail. Retail trade will have 2 tidal waves to face in the next 5 years: one economicaland one generational. Pure player or Brick&Mortar will be affected and will certainlyhave to rethink their distribution model in order to satisfy the ‘On Demand’ and‘Virtual First’ generation. New models will be obliged to be mixtures of ephemeral,experiential, augmented and/or virtual stores... distribution and therefore itsinfrastructures will need to be reconsidered in order to provide the frictionlessconsumption which GenZ will expect between now and 10 years or so.

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2Smart Homes & Health Health represents a weighty promise and

touches on our privacy, both literally and

figuratively.

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FROM WELL-BEING TO SMART HEALTH

The world of health will surely be the first soluble sector in the world of artificial

intelligence.

Every medical process, from diagnosis to daily monitoring will be driven by AI,

supported by numerous connectors which grow more and more precise with patients’

medical records. This does pose the question: who are the guarantors of this domain,

long preempted by the medical profession?

AI investment in health continues to climb, as the graph below shows!

The question is even more apparent with the progressive appearance of so-called

quantified self tools, which have, until now, not been seen outside the world of sport!

IDC estimates that there were 125.3 million units of wearables in 2018, which was an

increase of 8.5% in comparison with 2017. This growth should continue over the next

few years. In 2019, the percentage of Americans who had a connected watch rose to

above 10%, according to eMarketer.

But we must also look at the smart home whose global market is expected to reach

US $123 billion by 2022, compared to $56 billion in 2018. This growth, and the

potential of the smart home, are interfering with the heart of the daily lives of the

inhabitants.

Although the new Smart Home technologies are dedicated to the smooth functioning

of the residence, many operators see them as a sensor for health data, but also as a

place for future care.

Indeed, the providers of these solutions have achieved a technological maturity which

allows them to preempt the world of health. This ambition rests on an exponential

number of connected objects. Their goal is to collect massive amounts of data from

individuals in real time such as our various parameters of stress, hygiene, sleep,

stress, heart rate, our consumption habits, and sports. Becoming more and more

reliable, these connected objects are day after day more readily recognised by the

medical profession. They are thus led to have faith in everyday medical diagnoses.

To demonstrate this, the FDA (Food and Drug Administration) has issued a standard

on the classification of health objects. This standard frees a large number of

connected objects from legal constraints. It thus renders them more actionable in the

health field. A large number of connected objects on display at CES in Las Vegas also

sported the famous acronym guaranteeing recognition in the medical world.

life is a platform, platform is life

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This standard issued by the FDA carries such authority in the USA and even across

the entire world, that it fosters real interference from the American giants in favour of

a so-called augmented health!

It is probable that a similar change will be seen in European regulation.

Various operator strategies already make it possible to forecast how health will be

affected in real terms.

DAILY ROUTINE BY PHILIPS

Today, Philips is a business focused on pure medical technologies. You can also see

the Philips brand on other products such as flat screen TVs. However, all of these are

produced by other manufacturers.

Listening to the words of Philips’ personal health manager, it is easy to understand

their ambitions:

"This year, at CES, we are presenting solutions which are intelligent, customised,

adapted and adaptable to people’s unique requirements, motivations and

characteristics. Consumer technology, such as Philips’ virtual platform for staff oral

healthcare, is the key to moving forward from reactive healthcare to proactive

healthcare. Thanks to its strong presence and its trustworthy brand in the fields of

both occupational health and the consumer, Philips occupies a unique position to

bridge the gap between the two worlds. For example, the brand can combine clinical

know-how in sleep data with consumer insights to develop innovative general public

health solutions that support all phases of sleep.”

From this speech, it can be seen that Philips wants to be involved in our daily lives

and become a guarantor of proactive rather than reactive healthcare, all of this driven

by its virtual platform! "At Philips, we believe that there is always a way to improve

everyday life," says Egbert van Acht, Personal Health Manager at Philips. In other

words, this means covering all facets of an ordinary day!

As sleep forms the first and last part of any day, it is for Philips the first incarnation of

the closest possible contact with their customers or patients. According to Egbert

van Acht “This year, at the CES 2019 trade fair, we presented innovative solutions to

assist every individual in taking on a more active role in the management of their own

health and well-being. Innovations such as SmartSleep are based on our in-depth

know-how in the field of sleep disorder treatment. It also generates sleep-related

information based on more than 2.6 million nights, on which Philips has been

collecting data over the past 10 years. These innovative solutions highlight our

unique positioning. This comprises combining clinical know-how with an excellent

patient experience.”

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It is no longer just about improving sleep. It is about promising, thanks to a clinical

and scientific answer, to repair sleep!

It’s only one short step from slumber to brushing our teeth, and Philips is already

there in our bathroom wearing a bright smile on its face!

Its latest medical and connected toy is the Philips Sonicare DiamondClean

toothbrush. It brings dental professionals closer to their patients. The Sonicare

Philips app provides access to a ‘virtual platform’ for personal oral care. It makes it

possible for users to have complete control of their day-to-day oral hygiene. It offers

the possibility of sharing their data about brushing with their dentist, in order to

benefit from more personalised advice in just a few clicks.

This is where Philips plays its role of intermediary, by launching its ‘teledentistry’

service Sonicare in North America. The service allows consumers or patients to

benefit from a remote dental consultation from an authorised dentist (validated by

Philips) within 24 hours.

Last but not least, like an Amazon replenishment, the Philips Sonicare DiamondClean

now automatically places an order for toothbrush.

PHILIPS, A GENERATIONAL STORY!

We will come back to this, but all the health technologies presented at CES in Las

Vegas target two areas of the population: the young, actually very young, and

pensioners!

At the trade fair, Philips announced Philips Cares, a new digital platform designed for

assisting families. The principle is to strengthen the closeness families have with

their older loved ones, by creating a 24/7 personalised alert service.

The Philips Cares Aging & Caregiving service is a digital ecosystem which makes it

possible for users to easily train and bring into action a ‘circle of care’. This circle is

made up of parents and trusted friends. The service consists of accessing useful

information on the well-being of the loved one and receiving updates on their care.

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Thanks to Philips’ protocol services, aged people can, with the press of a button,

access a network of Philips clinical care services before an emergency occurs. The

Philips Lifeline personal alert button can also be used to contact a specialist 24 hours

a day, 7 days a week, in order to send the appropriate assistance.

Philips Lifeline can also be managed via the Philips Cares app, allowing caregivers in

the healthcare ecosystem to stay informed and connected. The predictive analysis

provided by AI keeps members of the family informed in real time.

Philips also uses its predictive analyses to make it possible for caregivers to monitor,

qualify and evaluate for the emergency services whether a person is at risk.

"Whether you yourself are getting older or if you are taking care of a loved one, we all

hope to have peace of mind as we grow older” observes Ripley Martin, General

Manager at Philips Aging & Caregiving.

The ambition we have at Philips Cares is to facilitate and enrich the ageing process

for caregivers and the elderly, by providing them with permanent care solutions!

MIRROR, MIRROR ON THE WALL, WHO IS THE FAIREST AND HEALTHIESTOF ALL?!

The SmartMirror concept demonstrates that how the Philips solutions allow

individuals to better understand that their daily routine can have an effect on their

health, their confidence and their well-being. Indeed, this mirror centralises the data,

like the dashboard of connected objects seen previously. It therefore provides the

possibility to view our body temperature, the quality of our skin, our most recent

blood pressure measurement, our steps, in fact all our recent news. It is able to

generate a report following the brushing of our teeth. If the report is negative in any

way, it is enough to simply press a button to call a doctor recommended by the

Philips platform!

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Amazon and the Silver economy under the guise of the smarthome (voice)

The huge interest in health shown by the global digital giants isno longer in need of being proved!

In the first place, the first market which Amazon preemptedwas health.

For Jeff Bezos "The healthcare system is complex, and we arediscovering its degree of difficulty. As difficult as it may be, itis worth it in order to reduce the burden of healthcare on theeconomy while at the same time improving results foremployees and their families. To be successful, we will needskilled experts, open minds and a long-term drive.”

The ‘burden’ of healthcare was confirmed by the study carriedout by Gallup, in which only one employee out of each sixsurveyed was happy with their healthcare!

As a symbol of liberal technological utopia, Amazon had severalsolutions!

In an interview with CNBC in February 2018, Warren Buffet,PDG of a joint venture bringing together Amazon and JPMorgan, “was targeting more than simple changes in healthcarecosts.” This reminds us in fact that “healthcare costs in theUnited States are said to be around 18% of gross domesticproduct (GDP), with all indicators pointing towards an increase,while in other countries it accounts for about 11% of GDP.”before adding finally: "I like the idea of tackling what I considerto be the major problem in our economy,"

Thus, this unprecedented type of partnership promises torevolutionise traditional healthcare. This announcement alsohad the effect, in less than 2 hours, of shaking the value oflarge groups in the healthcare market!

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Last but not least, on 19th March 2019, Amazon recruited TahaKass-Hout, Chief Health Informatics Officer at the FDA (FoodDrug Association, the body that has the mandate to authorisethe marketing of drugs on the territory of the United-States).He is described as a “doctor with infinite powers, providing theconsumer with the means to access sustainable healthcaredata ecosystems.”

In June 2018 Amazon bought the online pharmacy PillPack for$753 million, pulling it from the fingertips of Walmart, whichhad been negotiating since the beginning of 2018. Byintegrating with PillPack, Amazon will benefit from itsexperience in the medical domain.

Thanks to this partnership Amazon is already selling medicinesfreely. It is possible to purchase, from this e-commerce giant,branded products such as Advil, Mucinex and Nicorette, as wellas generic brands like Perrigo’s GoodSense

Indeed, as mentioned at the recent Commerce Reloaded,Amazon has created its own medical research body called1492! It healthcare ecosystem is already in place. It includesthe research section as well as those dedicated to theprescription and distribution of care.

The elderly obviously represent a key target. Amazon haslaunched two initiatives to support them. One is at developmentstage and the second is at patent level and works throughAlexa.

The first is an Ecobee initiative, an intelligent thermostatbacked by Amazon, which has invested $66 million. Thisthermostat

encourages customers to share their data anonymously, inorder to help the software better understand their behaviour,particularly the elderly.

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Ecobee's sensors can use all the data to better understand the

movement and behavioural changes of an older person. If that

person reduces their frequency of using the stairs, that may be

explained by aches and pains or a weak knee. It is therefore

possible to send an alert to a member of the family, a trusted

friend, or a medical professional.

For the moment, Amazon is limiting its marketing on this type

of innovation.

The second initiative, in October 2018, Amazon registered a

patent for detecting ‘abnormal’ conditions in the voice. This

may be reflected by various symptoms: a cough, a sore throat,

and even different emotional states such as sadness or

excitement. If an older person coughs, Alexa could suggest that

they order some medicine. If programmed to do so, this data on

the cough can be sent directly to a close family member or

friend or care provider.

Subsequently, Amazon is likely to include facial analysis

capacity in Alexa to understand the heart rate.

During facial analysis, a specific area of the face will be

chosen. A heart rate signal will be detected in spite of the effect

of the light present, any glare, facial hair or other obstructions.

Alternatively, an area may be selected depending on the

computer’s algorithmic knowledge of the human anatomy, as

explained by Amazon in this patent:

"a particular place may be chosen depending on the knowledge

of the human anatomy, such as locations on the facial foramen

and where the locations on the human face which correspond to

the arteries or veins.”

Once one or two regions of the face have been selected, heart

rate analysis is begun by determining chosen and monitored

measures over time. For example, the chart below (Amazon

patent) allows you to track measurements such as brightness

or intensity of the skin’s colour over time, to define the

frequency of heartbeat over time.

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When health and technological mastering are highly strategic

issues for all countries, Europe must be aware of the risks of

delay.

GOOGLE AND PANASONIC

A patent from Google was published on the 4th January which explained how it could

use ‘optical sensors’ placed in the equipment or personal effects of patients to collect

data on individuals’ heart rates, all in the name of changing behavioural patterns and

reducing cases of heart disease.

Google’s new invention for monitoring health at home, and particularly in the

bathroom (as the patent below describes), uses the mirror as a support for its

reporting. The collected data will be monitored and shared with health professionals

advocated by the Google platform (which is not yet official but is present in the

patent).

It is even more credible now that Google has announced its takeover of DeepMind

Health, a part of its DeepMind AI laboratories based in London.

The founders of DeepMind have declared that it is a ‘major milestone’ for the

company, which would help transform its Streams app, developed to help the NHS in

the UK, into an AI assistant which would help nurses and doctors to provide better

quality care more quickly by combining ‘the best algorithms with an intuitive

design’.

Currently the Streams app is being tested in the UK, with the aim of helping health

professionals manage patients.

PANASONIC

Panasonic presented its intelligent mirror which is still in proof of concept phase.

This mirror integrates cameras and heat sensors to identify us, make itself aware of

the state of our health, and how we are feeling. The principle is to adjust, depending

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This mirror immediately detects and displays our age, gender and heart rate.

Panasonic claims that the margin of error is only 0.001%!

When this technology comes onto the market, it will not necessarily be in the form of

a mirror. Beyond their security function, many cameras tucked around the house will

be able to identify our little jobs and movements. They will be able to alert us, even

alert the family of an elderly parent about a fall. These sensors will also make it

possible to warn us of any unusual situations (as the image opposite shows).

This image, showing elderly people, is a perfect illustration. The monitoring

associated with capturing our movements and our general state promises to simplify

our care networks. It will significantly ease the lives of people cared for in their own

homes.

Put at the service of housing, accident prevention, healthcare and even social

bonding, new technologies can play an active role in improving the aging process at

home. We know that placing seniors in distant care homes is often traumatic.

Today, propelled by the new technologies, it is completely possible to smart-connect

one’s home to its environment and to link it with healthcare professionals, thus

creating a sort of care home which is integrated into an individual residence.

Technology will contribute to the remodelling of our healthcare system and in

particular, that of the elderly. The Smart Home will thus be dedicated to becoming a

truly autonomous personal care home.

WITHINGS OR THE FRENCH RESPONSE

After having been acquired by Nokia, Withings, start of connected objects on France,

has come forward with new ambitions since founder Eric Carreel took back the reins.

At CES, Withings presented 3 new products. It displays an ambition to go beyond the

well-being market to turn resolutely towards the health care market.

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The first product, and the most symbolic in this new ambition, is the BPM Core, a so-called 3 in 1 tensiometer. In effect, it provides 3 uses:

§ monitoring blood pressure and heart rate,

§ the patient doing their own electrocardiogram to detect atrial fibrillation,

§ being used as an electronic stethoscope.

According to CEO Mathieu Letombe, the BPM Core would be the ‘the most advanced’connected blood pressure monitor ‘on the market’ for individuals, especially on aperson on whom he could analyse ‘valvulopathies and atrial fibrillation’ which areconditions linked to hypertension.

Withings has submitted applications to the FDA (Food and Drug Administration) inthe United States and to its European equivalent, the EMA (European MedicinesAgency) in a bid to conquer the medical world.

Withings is waiting for the FDA to certify its new tensiometer BPM Core (see imagebelow) as it did with its Withing Move watches. These were designed for themonitoring of activity and sleep for the marketing aspect, but especially, as a secondstep, to set up Withings’ personal care platform in the image of Philips mentionedabove.

APPLE AND THE MILESTONE IN HEALTHCARE

At the last Apple keynote in September 2018, the Apple Watch Series 4 was one ofthe flagship announcements of the show!

Beyond the new design and optimisation for the fitness of iOS (Apple’s iPhoneoperating system), this new watch has received the green light from the FDA (FederalDrug Administration).

This latest version indeed now features a new accelerometer, a new gyroscopecapable of identifying sudden movements in everyday life (falls, losing balance, etc.)and an electrocardiogram frequency sensor.

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Apple is positioning itself as our future guarantor for capturing and analysing ourdata with our chosen third-party health provider.

For example, in the event of a deficient heart rate or a fall, an alert can be sent to amedical ecosystem appropriated by Apple.

Just like Jeff Bezos, Tim Cook, CEO of Apple, has declared big ambitions for hiscompany in the field of healthcare...

“What will Apple’s biggest contribution to humanity be? It will be about health.” CEOTim Cook didn’t hesitate during an interview with CNBC. “We are making it accessibleto everyone. We will give people the means to manage their health.”

Apple signed an agreement (in mid-January 2019) with Aetna, the American insurerowned by the American chain of pharmacies CVS Heath, which has more than 22million customers under medical care.

The app determines personalised activity objectives depending on age, gender andweight. It unveils a new wealth of information such as heart rate, activity, hours ofsleep... The American group will therefore have access to a unprecedented flux ofpersonal data to improve its services. According to Apple, no information will be sold,and the sharing of data will be in the hands of users

More data will be gathered and more services will be customised. For now, Apple hasnot discussed the future of its services.

According to Jeff Williams, Chief Operating Officer of Apple "We believe that peopleshould play a more active role in the management of their well-being. Every day, wereceive emails and letters from people all across the world who have foundincorporating their Apple Watch into their daily lives and routines a great advantage(... ) As we have learnt over time, the goal is to make more personalisedrecommendations which will help members to achieve their objectives and to live ahealthier life.”

To remind ourselves; Apple is already working with more than 120 institutions whichare able to interact with the HealthLit health app with the agreement of users (seeDuke my Chart hospital example and subscription required).

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The app on Apple Watch (launch forecast for spring 2019) will provide Aetna

members with personalised targets. It will monitor the levels of daily activity,

recommend healthy acts and reward users for having taken these actions to improve

their well-being.

It will be interesting to follow the evolution of these two giants, who through the

strength of their audience will perhaps design the future of insurtech.

Some figures; Apple has 85 million iPhone users and Aetna has 20 million

subscribers.

NEXT: MEDICINAL ITUNES

Apple has created patents for three types of AirPod headphones. They are each

equipped with sensors capable of gathering reliable data about a user’s health.

The set includes a Photoplethysmography sensor (the same as is used in the Apple

Watch) to monitor heart rate.

The other detail discussed in the patent is a surveillance system of the user’s entire

physical state of health. Its sensors identify oxygen levels in the blood, heart rate,

stress level, body temperature, and more still...

Under the cover of background music, Apple is gearing up to checking on us every

second, to ensure our greatest possible happiness!

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GOOGLE OFFERS FOSSIL CONNECTED WATCHES

At the beginning of 2019, Google and watchmaker Fossil Group announced thesigning of an agreement worth around $40 million. This agreement will allow Googleto acquire a part of Fossil’s Smartwatch technology and also members of theresearch and development division responsible for its creation.

Consequently, from now on Google will have available a dedicated team with materialexperience to work internally on its logistical platform WearOS and potentially on newsmartwatch designs.

From there, Google could therefore quickly launch its own connected watch, in thesame field as Apple Watch or the Fitbit where the market is driven by fitness andhealth usages.

Once the FDA has given the go ahead, these watches will be the ultimate sensors fornourishing Cloud Healthcare API (launched on 11th March 2018 at the HIMSS 2018conference). This API aims to facilitate the collection, storage and access to health-related data. This also means ensuring they are analysed (using AI deepmind) forhealth organisations.

For now, Google is testing Cloud Healthcare API with a select group of partners, suchas the Stanford School of Medicine.

RETAIL AS A HEALTH PLATFORM

At CES in Las Vegas and Shanghai, Suning, a leader in Chinese retail, made itapparent that it was more than a simple retailer. Its ambition is much greater, as itsslogan displays: ‘Leading the Ecosystem across Industries by Creating Elite Qualityof Life for All’. The smart home, and as a result health, are a part of this ambition.

Everything; Panasonic’s mirror, the sensors places in the heart of Suning’s connectedobjects, centralise data.

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TENCENT: THE CHINESE HEALTHCARE GUARANTEE

Although Tencent wasn’t present at any trade fair, it has

become a healthcare guarantor thanks to the drip-fed input of

AI with the full blessing of the Chinese government.

To explain: the Chinese government divided civil tasks across

five platforms of open innovation, each organised around a

national champion of technology: Baidu for autonomous

driving, Alibaba for the Smart City, Tencent for medical

diagnostics, iFlytek for voice recognition and SenseTime for

intelligent vision.

By hiring dozens of researchers and opening a lab in Seattle,

Tencent is increasing its AI investment in the US hugely.

Aiming for a world-class status in genomics and personalised

medicine, the company is continually investing and partnering

with young startups in the field to bring the best to China.

This year Tencent has partnered with Babylon Health, a new

English company specialising in virtual assistants (chatbots)

and health care. Today, its app makes it possible for Chinese

users to send their symptoms and then receive an immediate

medical diagnosis.

The Chinese giant is aiming to go further, proposing services

relating to fields of general interest such as health and

education.

Thus, its health-related entity WeDoctor has more than 2,700

hospitals, 220,000 doctors, and 15,000 pharmacies on its

platform serving its 27 million active monthly users. Automated

or not, patients report their personal data and medical history

on a regular basis. The AI recipient of this information can also

issue a pre-diagnostic. Depending on the seriousness of the

condition, the report is sent to a doctor, who will validate the

delivery of medicines to the patient’s residence for example.

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Tencent AI Partnerships & Investments

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As well as its own AI platform Miying Healthcare, whose aim isto assist healthcare establishments in diagnosing cancerthanks to AI, Tencent has recently invested $154 in iCarbonX.This Chinese unicorn is an AI specialist in the field ofhealthcare. Its ambition is this: Creating a global picture ofhealth. In short, it is a question of ensuring a full digitalrepresentation of our biological self!

While the building of this service-based empire focused onhealth (see Tencent ecosystem) couldn’t be done without thegoodwill of the Chinese Communist Party, it is also at thesource of a national AI programme. For Xiaolong Zhang,founder of WeChat, ecosystems are the future. "We are buildinga forest, not a palace. Rather than establish everything byourselves, we create an ecosystem that nurtures things to growwithin it." (see ecosystem below)

AS CLOSE AS CAN BE TO THE SKIN

Connected clothes were a hot topic, with a veritable parade of promises!

We won’t select a seasonal collection of every participant, but hone in on one, since it

mixes health and the smart home with many other ideas!

Skiin, which also presented last year, this year presented its new line of ‘intelligent’

underwear and bras. These sensor-filled under-garments can track what is

happening in our bodies and even control our intelligent home. Yes indeed! The

novelty lies in the fact that our smart home can be controlled by our bodies! If our

body won’t speak to us, it will at least speak to our home.

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According to their spokesperson, Skiin’s undergarments each have six different

sensors. They can measure heart rate, temperature, blood pressure and movement,

as well as the body fat percentage and even the hydration level of our bodies. These

sensors are constantly gathering and analysing data. It sends the data to its analysis

platform which then launches the necessary actions according to the partner

agreements in the smart home.

For example, if during our sleep the sensors notice a drop in our body temperature,

they will automatically instruct either the Nest (Alphabet) or the Ecobee (Amazon)

thermostat to turn the heating up.

In the future, these detections will probably initiate phone calls: for example to

request the intervention of a doctor following any sort of cardiac abnormality

identified by the sensors! The possibilities are huge. It is possible to imagine that

these intelligent clothes may be the next target for the technological giants

mentioned in this report. Moreover, Alibaba is already involved with connected

clothing!

ALIBABA AND THE SENSUAL SKIN EMPIRE

Alibaba is no novice in the field of health, as is shown by its Alihealth division. To

mention no more than its Silicon Valley equivalents, Alihealth is equivalent to

Alphabet’s Calico or Amazon’s 1492.

During 2018, the German company AG and the health division Alibaba AliHealth

formed a strategic partnership. Their objective is to make Bayer’s auto-care products

and solutions more accessible to Chinese consumers.

With such an agreement, Bayer will use data provided by the Alibaba platform to

track health trends among the Chinese and better meet their self-care demands.

"We will form a global partnership in marketing, promotion and operation within

Alibaba's medical ecosystem," says He Yong, vice president of marketing and

innovation, Bayer Consumer Health, China.

AliHealth's ability to manage and analyse large data volumes will provide an accurate

and in-depth understanding of each consumer. Bayer will then be able to tailor self-

care products and solutions to better meet the requirements of Alibaba's healthcare

division.

This type of manoeuvre ultimately serves the government’s Healthy China 2030 plan.

"This plan aims to provide equal access to health services for all citizens by 2030.

And self-care will be one of the key drivers of the overall medical system for

achieving this goal," says Celina Chew, president of the Bayer Greater China group.

Alibaba also opened its first joint research institute outside China at the beginning of

this year. This is located in Singapore, in collaboration with Nanyang Technological

University (NTU) and PolyU (Hong Kong Polytecnic University) .

PolyU and Alibaba Cloud have signed an agreement reinforcing their cooperation in

research on artificial intelligence. This agreement is particularly aimed at investing in

cities and smart health care.

With regard to intelligent healthcare, PolyU and Alibaba Cloud plan to develop a

series of initiatives. The first is called Fashion AI. Its aim is to make sensor-carrying

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This first concrete step in the direction of Healthy China 2030 whose core ambitions

are:

- reducing medical costs,

- reducing the risk of medical malpractice,

- assisting and automating diagnostic procedures,

- providing patients with more personalised pharmaceutical services.

THE BRANDS

Nike is providing a buzz with its auto-lacing technology with Adapt BB, and Adidas is

coming to the fore with its accelerated shoe production at its speedfactory sites.

However, Puma, is seeking to bring its own technology to market with the Fi shoe.

Beyond its lacing, this shoe is equipped with a capacity of intelligent detection which

adapts to the particular foot shape of anyone who wears it.

Puma has joined forces with MIT Design Lab to create shoes which adapt to the

wearer’s level of tiredness. Deep Learning insoles use sweat-responsive bacteria to

gather biological information from the wearer in order to prevent fatigue and improve

performance.

“We are imagining products which can adapt to the user and the environment in real

time, without the user having to do anything, to then optimise their movements, their

body and their performance”, says Yihyun Lim, director of MIT Design Lab.

These giants of sport are thus creating, day after day, tools for sport which are more

and more connected and more closely related to health. In this respect, it is easily

possible to imagine that these large brands may also develop their ecosystems in the

same way as have done the Chinese and American digital giants!

During the NRF Retail’s Big Show in 2019, Scott Galloway suggested the emerging

possibility of an ecosystem run by Nike. This ecosystem could form partnerships with

companies such as Blue Apron, which specialises in home delivery of cooking kits, or

with the New York-Presbyterian hospital. All these related services can fully

associate with the monitoring of physical activities and can go further to offer

wellbeing solutions!

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GENOMICS IS THE BRIDGE OF THE HYPER-PERSONALIZATION OFEVERYTHING

The old adage of retail tells us that the more data we gather on an individual, thebetter companies can understand them and get to know them.

All through the stands, slogans such as Genomics is the bridge of life and grab life bythe genes made hard-to-break promises!

Here, it is no longer about our so-called personal data, but about DNA guaranteeingthe origins which form us!

In 2019, we will witness an increase in inter-field collaborations, the health of whomshown will be embodied by our DNA. This will be the first ingredient in betterunderstanding the users and citizens and thus offering them better adapted products!

Here follows a little snapshot of the first in the mix of pictures.

DNA IS MY PLAYLIST

In September 2018, Spotify partnered with Ancestry.com to use our DNA data.Together, they promised to create unique reading lists for individuals.

These reading lists would reflect the music linked to our varying ethnicities andreligions... Someone with ancestral roots in Brittany, for example, would be able tolisten to music originating from there! This is Spotify’s promise! No need to searchany more, we take care of that!

DNA IS MY NUTRITIONIST

Genetic data also advises us on the way we eat. GenoPalate and OME Health collectvaluable information thanks to our DNA, using saliva samples and analysis ofphysiological components, such as the capacity for a person to absorb certainvitamins, or the speed at which they can metabolise nutrients.

It is even possible to receive a box containing all the necessary tools to confirm thegenetic tests we have taken in the shortest time possible; an excellent way to begin abespoke cure based on scientifically proven elements! (see below)

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In possession of this data, the company combines this information with nutritionalanalyses performed on a wide range of foods. It is therefore able to offer apersonalised diet.

DNA IS MY LIFE COACH FOR EVERYTHING!

Orig3n,a young Boston-based company established in 2014, is determined to makegenetic information accessible to everyone, for all facets of our lives! Orig3n offersthe consumer direct access to this information at an affordable price. The principle isto transcribe a substrate of their genes, in order to improve the way they live. Everyclient can therefore make life choices which influence their well-being and health.

Orig3n also invests in advanced cellular therapy programmes to develop personalisedtherapies to repair, for example, tissue lesions and to treat diseases.

Since its establishment in 2014, Orig3n has developed the broadest range of genetictesting and the world's most comprehensive cell bank for commercial regenerativemedicine applications.

The catalogue (see below) leaves us astonished by the diversity of the lifeimprovements advertised by this young company. It goes from fitness, to ourintelligence, to our success on the ski slopes!

The field of possibilities is infinite, all thanks to our DNA!

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SAVE MY BRAIN!

Nectome, a company founded by 2 MIT graduates, has created a technologicalprocess which is able to keep the network of synapses that connects our neuronsintact. According to the neurons, this cartography that has been captured allows arecreation of the conscience of a person in another bodily shell. “The brain can bedead, like a ‘shut down’ computer. But nothing says that the information that itcontains is no longer there” declares the founder.

More from the founder “When a generation dies, its collective knowledge dies with it.With this technology, it will be possible to send the knowledge, and also theexperience acquired during a whole lifetime. Children will be able to learn from themistakes of their elders, isn’t that amazing?!”

Their long-term vision is to make data contained in the cerebral cortex reusable anddownloadable on command for future generations.

For now, Nectome’s storage service is not on the market and won’t be for severalyears. Neither is there any proof that memories will be able to be found within thedead tissue. However, the company has found a way to test the market. In the sameway as the electric vehicle manufacturer, Tesla, it reduces demand by invitingpotential customers to subscribe to a waiting list for a deposit of $10,000, fullyrefundable if you change your mind. To date, 25 people have subscribed.

ROBOTS: COMPANION TO SENIORS

One of the main attractions at the trade fair was the Samsung Bot Care. This robot,destined for individuals, can assist users in the management of their day-to-dayhealth. According to Gary Lee, head of the Samsung AI centre, “The robot can monitorsleep cycles, remind users to take their medication, provide advice on physicalexercise, and call the emergency services if necessary!”

Of course, Bot Care can be remotely controlled by family members. It makes itpossible to monitor the health of elderly parents living alone.

In France, over the years, Buddy has developed all sorts of functionalities. Forexample, it can be programmed to read, remind you of a medical appointment,stimulate your memory via tests and games, and improve social links in the sameway as Samsung’s Bot Care!

If this robot were placed in an animist country like Japan, where senior citizens arevenerated, its success could not be so easily assured as it is in western countries!

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CONCLUSION

It is highly likely that between now and 2050, society will turn towards a so-called

augmented healthcare, meaning more personalised and more efficient, as much

preventative as curative.

This approach is in tune with the current societal debate about the steady growth of

health expenditure due in large part to the aging of the population. For example, in

France, the governmental programme Ma Santé 2022 [My Health 2022] is already

part of an alternative approach to the existing one. Could the quickest answer be

provided by the web giants? Responsive personal data or Privacy? (see section on

Amazon, Apple, Google...)

None of these giants is European, hence the vertigo that grips us when faced with

technological advances whose pace seems to be constantly accelerating. This must

drive Europe to realise how much health and the technological mastery surrounding it

represent highly strategic topics and a challenge to European sovereignty. It is

unlikely that these changes will not have an impact on our health organisations and

systems.

With this in mind, Axa, for example, has invested in French company Happytal.

Happytal is a concierge service platform for those in hospital, particularly the elderly.

In the first three quarters of 2018, $2.56 billion was invested by the insurance sector

in connected objects worldwide!

Europe cannot reasonably have, as its only strategy, multiplying regulations and

turning a blind eye to this new situation which gives the reins to patients and digital

operators. Europe must be inventive, and base itself on a new balance between

health, ethics, collected data, and new uses.

Remember when Apple put its music online with iTunes, or when Amazon launched

its voice assistant Alexa? No-one saw the launch. We certainly see the results.

Exactly the same thing is happening today with consumer habits. GAFAM and BATXJ

want to enter into our lives, and they will succeed. Because when they have the

weight of hundreds of millions of users behind them, they have the means to change

the rules...

Amazon, Alibaba, and JD.com already supply over-the-counter medication from

leading brands such as Advil, Mucinex and Nicorette, as well as generic brand options

such as Perrigo’s GoodSense...

Armed with our banking data, our home data, our car data and our health data, Apple

and the other giants now have the means and certainly the will to centralise all this

data about our daily lives. While healthcare is facing problems due to austerity within

public care, the field is ripe for picking for these new entrants! Healthcare will without

doubt become the wooden horse of Troy, soon activating our ‘personal life assistant’

made by digital giants. Long-term, it is possible to imagine that Apple will offer us

‘life packages’ (insurance, bank accounts. etc.).

In this new Code is Law world, there is a risk that rules are no longer set by the public

but by digital platforms. How will public health law fare against the algorithms of

Deepmind-Google, Alibaba’s Alihealth, et al?

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By bringing together these recent patents (see below), the appetite of these giants is

becoming insatiable and irrevocable. It requires swift positioning on the part of the

European authorities, based on this model of civilization that is looming.

The law will have to reinvent itself to cover AI and our lives will be blown sideways at

the same time! Governance, the regulation of emerging platforms boosted by AI will

occupy the lion’s share of parliamentary work and open up a real public debate! As a

little reminder; a compilation of the slogans proffered by large technological groups

at CES 2019!

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3Smart City & Mobility The private sector, which occupies a little more urban space day by day, is reinventing the logistics of neighbourhoods and the lifestyles of their inhabitants.

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According to ABI Research, by 2040, more than 65% of the global population will be

living in cities. This will mean a further 2.5 billion people involved in searching for

lodging, services and employment in our already crowded urban centres.

Currently, more than 20 cities across the world have a population of more than 15

million inhabitants! This is not without risk for civic authorities, who will be obliged to

face issues concerning flow, energy control, space optimisation... This will surely

mean a rethink of existing models whose investment and ideas are becoming scarce

under the shade of this immense challenge!

Beyond the integration of new technologies, the real challenge lies in reinventing the

city depending on new social imponderables, an aging population, and a new

generation borne along by immediacy...

A major and obvious problem is city congestion!

Bogota, capital of Colombia, is one of the worst cities in the world for congestion.

According to statistachart, drivers spend on average 272 hours per year in their

vehicle.

Europe is not dissimilar. As an example, drivers in Rome spend 254 hours of their

time in traffic jams.

Smart cities, or the preliminary sketch of a new world: ‘AUTOMATION THEATRE’

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Digital giants are engaged in every aspect of life, from health to education, viatransportation. They are reimagining and finding new solutions for these areas, withtheir wildly precise algorithms.

In the name of urban design and exaggerated philanthropy, Silicon Valley and theChinese digital giants are beginning to redesign neighbourhoods, streets andtransport. Ultimately, this involves reinventing civic life, to favour a hyper connectedand controlled future.

To return to the problem of road congestion, China has addressed the problem in thetown of Hangzhou, where an algorithmic system of traffic management is changingthings for the better. This is in fact the City Brain’ project developed by Alibaba. Itutilises data taken from urban camera and social network platforms to monitor thetraffic flow. Before the project was launched, Hangzhou was one of the five worstcities in China for traffic congestion. At the last count, it had dropped to 57th place inthat sector. Code is the city!

This new ambition will not be exclusive to this type of giants. Other operators areinvolved, the automobile sector of course, but also retailers. The world of retail alsowants to contribute to the evolution of this important new space which is bringingforth the humanity of tomorrow. Who will be, ultimately, the new architects creatingthe city of tomorrow?

VERTICALITY OR HORIZONTALITY, OR THE EMERGENCE OF ‘BUILDINGMOMENTUM’

The time of vertical lifts and their cortège of associated anxieties may soon be over.At Websummit 2018, the German company Thyssenkrupp showcased a life systemcalled MULTI. Cable free, this piece of apparatus can move both vertically andhorizontally!

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Exponential urbanisation is every day forcing a one-upmanship in the size ofbuildings in order to house the growing population. The current lifts in use need moreenergy to supply their engines, larger cables, and also more space, to allow theinstallation of several lift shafts.

The MULTI concept resolves space and energy inefficiencies. It consolidates severallift cages into just a few. It eliminates the need for cables with cable-free cabinsmoving horizontally on a continuous loop.

According to the manufacturer, MULTI can increase the useable space of a buildingby at least 25%, while also reducing the peak energy requirements by 60% comparedto classic lift systems. The technology also has the capacity to recover energy and tostore it in batteries, and then to send it back to the internal network.

It is not surprising that Multi has just been recognised as one of the 25 bestinventions of the year by TIME magazine.

If this technology developed we would be able to optimise space and make flow morefluid, like in Fritz Lang’s film Metropolis, where the people move from building tobuilding horizontally!

This horizontality versus verticality could also be quite specific to logistics! And it isin China, where the cities are hugely enlarged, that a major Chinese retail operator isaiming at a new form of logistics!

On 18th October 2018, JD.com, via its JD Logistics branch announced theestablishment of the Urban Smart Logistics Institute. It will concentrate on theplanning of new urban logistical platforms!

According to JD.com, freight transport vehicles contribute disproportionately to thecongestion of urban traffic. This means mobilising up to a third of the road capacity.

According to Zhenhui Wang, CEO of JD Logistics “As China’s cities are developingfaster and becoming more sophisticated, sustainable urban development is critical.Smart logistics ensures that space in cities is being used in the most efficient andleast disruptive way possible”

The accelerated urbanisation in China is causing intense changes in the environment,increasing pollution. It is producing many disruptions in the lives of citizens. Themain objective of this institute is to re-conceive the framework of logistics in urbanspaces in order to be more efficient and ecological.

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This promise should be kept thanks to the implementation of underground logistics

systems. Indeed, the institute sees in the utilisation of underground routes and

integrated municipal corridors (see image below) as a means of preserving space

above ground. This promises a fluid and efficient urban logistic with a minimum of

disturbances to daily life.

"The use of underground space to build three-dimensional smart logistics system is

an industry game-changer. It will alleviate traffic problems, environmental problems,

and save urban space." according to Chen Xiangsheng, director of the Chinese

Academy of Engineering.

Amazon is not dissimilar. In 2016, this giant of American retail registered a patent

detailing an underground delivery network. The main aim is to deliver directly to

buildings and residences like JD.com.

The initiatives proposed by Thyssenkrupp and JD.com aim to redesign our cities,

favouring a horizontal flow of people and goods, a place of increased space and

energy savings!

While the ambition is commendable and achievable, time is flying, and the first large-

scale initiatives are already within the grasp of 2 digital giants, namely Alibaba and

Alphabet.

ALIBABA AND ALPHABET: OR THE FUTURE OF THE CITY OF TOMORROW

From Alibaba’s City Brain Alphabet’s Sidewalk Labs, techtitians are dashing to show

us how technology could make cities less congested, more citizen-friendly and safer.

Sidewalk Lab

Sidewalk Lab, subsidiary of Alphabet, Google’s parent company is building ‘from

scratch’ a new neighbourhood in the south-east of Toronto.

Toronto has given Alphabet free rein. The hope is to create the first and biggest

technology fusion experience, in an urban planning process in North America.

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Sidewalk Lab’s promise is the optimisation of the transversality of the vital functions

in a connected city! The project’s ambition is to create innovative solutions in order

to reduce energy waste, fight pollution, eradicate city congestion and through this

last point, ease parking problems. With this type of approach, the smart city spawns

intelligent subsets (vehicles, shops, hospitals, buildings, homes...). Everything here is

planned to facilitate the life of a citizen, which itself is enhanced through its ambient

connectivity!

Energy-wise, the project is highlighting a lot of cycle paths, pedestrian routes, and

affordable mixed-use buildings. A thermal network will make it possible to heat and

cool the buildings without using fossil fuels, thanks to the spin-off Dandelion!

Thereafter, network will then provide electrical energy thanks to its subsidiary

Makani. Makani was launched several years ago with a wind-energy production

project with giant kites!

Alphabet’s strength, above all, is data. This new ground of a city thus becomes a real

open-air laboratory for the American giant!

A network of sensors will continuously collect data in real time on the physical

environment in perpetual development. The variety of sensors available (camera,

5G...) will make it possible to measure everything instantaneously. The physical

space will be rewritten in digital data, making it possible to drive the urban

environment to second base via AI!

This algorithmic alchemy will offer citizens a fusion of the new services. Interactive

curbs will detect the presence of pedestrians and vehicles in an effort to avoid

accidents on a daily basis.

For example, a pedestrian crossing will be able to adjust in real time. It will only

appear when it is possible to cross the road completely safely. The technology will be

made of LEDs, cameras, and an algorithm capable of identifying different users on

the road such as pedestrians, cyclists, cars and lorries... It will be in a position to

calculate their exact placement and will be able to forecast their movements.

Adaptable in real time, (see photo), the crossing will grow if a larger number of

pedestrians wish to cross. In risky situations, if a pedestrian runs across the road in a

car’s blind-spot, the equipment will draw the attention of the driver to the running

passenger by using light signals on the ground.

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But will there still be drivers in this city? There is every reason to ask this question,knowing that Alphabet is one of the major global players in creating autonomous carsthanks to its subsidiary Waymo!

Among the 48 suppliers of autonomous cars (Uber, Apple, Baidu) tested onCalifornian roads in 2018, Waymo is the one which has driven the furthest inkilometres. It has the lowest disengagement time (when the driver has to take backcontrol of the vehicle).

Between December 2017 and November 2018, Waymo’s driverless cars havetherefore driven nearly 2 million kilometres on Californian roads. On average, humanintervention was only necessary every 17,732 km, compared to 9,005km the previousyear.

Buoyed by these results, Waymo’s autonomous taxis are being tested in Phoenix. It isprobable that this type of vehicle will be in service in test zones like Sidewalk.

Under the guise of a city built to this model, Alphabet is therefore slowly, over time,implanting its technological advances into all parts of our lives (health, retail, smarthome, autonomous cars). The following scheme covers again certain changesmentioned previously.

It appears that under the Alphabet or Google Assistant flag, citizens will be seethemselves offered a personalised account. This platform will make it possible forresidents to access public services just as easily as private ones. In this respect,Sidewalk has a desire to build a real matrix. It will supply the intelligent city with dataand will bring multiple service apps accessible via the various devices owned by thecitizens (smartphone, smartwatch, voice assistant...). A broad, rich and complexecosystem will be grafted onto this digital frame. It will encompass the coordinationand the connection of various Alphabet services.


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Sidewalk is aiming to make East Toronto's Waterfront the global hub for a newindustry focused on urban innovation. The proposed ambition is to improve thequality of life in the city, exploiting the technological sector which is alreadyflourishing in Toronto, developing innovations which could benefit communities andneighbourhoods throughout the city. Last but not least, in the name of well-being,Alphabet plans to move Google’s Canadian’s headquarters into this area to assist inthe development of the project.

"Waterfront Toronto will be an example to the rest of the world on how to build citieswhich will have a huge impact on our future”, declares in all modesty Meg Davis,Development Director for the project.

Despite these great promises, the idea of a city full of sensors and cameras canhowever be alarming. Every citizen has the right to wonder about the compensationrequested by Alphabet!

This seems utopian for some, but dystopian for others. In other words, hell may bepaved with good intentions, and the comfort and safety in our lives could turn into anightmare.

Those who defend having a personal life are sounding the alarm on the topic ofpotential abuse of continual surveillance. In October 2018, Ann Cavoukian, an expertin private life protection, left her role as a consultant for the project in Toronto. “Iimagined us creating a Smart City of Privacy, as opposed to a Smart City ofSurveillance”, according to Ann Cavoukian.

The evolution of Google’s urban think tank, becoming the operator of a testneighbourhood of all the ‘made by Alphabet’ urban innovations, is to be closelyobserved. Toronto’s Smart City could be ready in 5 to 6 years.

ALIBABA CITY BRAIN

In November 2018, Alibaba Cloud, Alibaba’s cloud computing device, rolled out the2.0 version of its urban traffic management system. It is called City Brain and will bedeveloped in Alibaba’s home city, Hangzhou.

Launched initially in September 2016, City Brain is mainly used to improve circulationflow, forecast live traffic and detect traffic flow incidents. The data comes from videocameras. After two years, as mentioned at the beginning of this section, Hangzhou,the first city to adopt this system, moved from 5th to 57th position on the list of mostcongested cities in China.

The latest version of this tool should make it possible to monitor and control citytraffic on a larger scale and with greater precision. Hangzhou City Brain 2.0 nowcovers a central zone of 42m2 of the city centre!

To date, traffic offences have been reported with an accuracy of 95%. According toJing Zhi, Assistant Head of Public Security in the Zhejiang province, the system usesmore than 110 autonomous alert capabilities and 1,300 AI-controlled traffic lights.

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Alibaba has introduced City Brain in other cities: Suzhou and Guangzhou in China, as

well as cities in Malaysia. The Chinese giant is taking yet another step. It is working

to move from the urban flow management of existing cities, to manufacturing the

cities of the future.

Alibaba has set up an urbanisation laboratory with the XiongAn municipality, to help

its transformation into a digital town. As a reminder, the government charged Alibaba

with creating the smart city of tomorrow! According to Yang Baojun, president of the

Chinese Academy of Urban Planning and Design, “all the levels of change in the city

will be operated by AI”

City Brain’s slogan is flawlessly clear: "Utilizing comprehensive real-time city data,

ET City Brain holistically optimises urban public resources by instantly correcting

defects in urban operations. This has led to numerous breakthroughs in urban

government models, service models, and industrial development."

The computing cloud and artificial intelligence (seen in the diagrams below) will bring

a double revolution: interconnection between populations and the spread of sensors

of all kinds within cities in order to deliver services in real time!

Alibaba will be the guarantor of numerous civic services in its test cities, such as

health, with its health division Alihealth, security with its range of facial recognition

tools, retail with its many entities (taobao...) and finance with Ant Financial.

The hegemony field appears endless, thanks to technological ubiquity but also

thanks to the unfailing support of the government.

AUTONOMOUS CARS

According to an analysis by the UBS bank, the autonomous car market will be worth

between $1,300 and $2,800 billion by 2030!

We know that autonomous cars will arrive... but when? Numerous automobile

manufacturers confirm that they will be able to make autonomous cars from level 4

available (see table below explaining the different levels). It is even conceivable that

we may see level 5 vehicles at the beginning of the 2020s.© photo credit: Alibaba

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The Renault-Nissan partnership for example, confirms that it will launch 10 types ofautonomous car by 2020: Volvo’s ambition is to have level 5 vehicles on the road by2021.

In 2017, the American government launched a Public-Private Intelligent TransportSystems (ITS) Initiative/Roadmaps. This is a programme aiming explicitly atattaining level 3 or more autonomous driving on all major roads from 2020.

In February 2018, the California Department of Motor Vehicles passed regulations sothat commercial vehicles with remote drivers would be able to operate before the endof the year.

In the United Kingdom, autonomous shuttle buses, supermarket delivery vehicles andeven cars are already being tested on private roads. From 2019, France will haveimplemented the necessary legal framework to authorise level 5 autonomousvehicles on the road. In China, it is predicted that there will be 10,000 in service by2020, 90% of which will be dedicated to public transport.

If commercialisation for the general public still seems somewhat in the early stages,it was indeed possible to observe the advances at the different CES and Websummittrade fairs. The operators in this sector are increasing their road tests with ever-moreinnovative technologies. Furthermore, there is no shortage of ideas for the city oftomorrow.

THE AUTONOMOUS CAR: A HISTORY OF TECHNOLOGY

To ensure the correct functionality of an autonomous car, 2 ingredients are essential:an optimum network (5G) and excellent LIDAR (Laser Imaging Detection AndRanging). LIDAR is a remote measurement technology based on the analysis of theproperties of a beam of light sent back to its transmitter. It directly calculates a pointcloud, allowing the 3D mapping of the surface of a site with a precision range of a fewcentimetres.

During Websummit 2018, Luminar, a LIDAR sensors manufacturer based in SiliconValley, announced that it had been collaborating with Audi's Autonomous IntelligentDriving since 2017. This cooperative is contributing to launching on the autonomouscar market from 2021.

AID test vehicles operating in Munich, where the car group is based, are eachequipped with two Luminar sensors. These sensors face forwards. They use laserbeams to create somewhat ghostly three-dimensional images of point clouds ofstreets, pedestrians, cyclists and other city cars.

Still at Websummit, Luminar also announced that it would be supplying its LIDARsensors to the Toyota Research Institut and to Volvo, as well as to a dozen other carmanufacturers.

Asked at the trade fair about the value of these various partnerships and sales of theLuminar sensors, CEO Austin Russell admitted with a wry smile to having generatedan 8 figure turnover!

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It isn’t surprising that the value of the LIDAR market is already estimated at $800million in 2018. In view of these various announcements, many experts are waitinguntil it increases significantly to $1.8 billion between now and 2023.

This is why many companies in this sector who had a presence at CES received largeinvestments! AEye, from San Francisco, recently received $40 million for a sensorwhich meshes camera and LIDAR data. The deals have certainly been just as fruitfulfor Innoviz Technologies, a similar Israeli company.

LIDAR technology seems to be the essential element for the launch of theautonomous car for the general public!

WAYRAY OR RISK AUTOMATION

One of the biggest attractions at CES 2019, in particular in the car sector, was theSwiss augmented reality (AR) start-up WayRay. Its main investors are Hyundai,Porsche and Alibaba!

At CES 2019, Hyundai showed how it was able to utilise WayRay’s technology in itsvehicles of the future. Installed in luxury Hyundai brand’s Genesis G80 saloon, thesystem offered augmented reality holographic display solutions on the windscreen, toguide the way for drivers.

WayRay’s success can be explained by its technology, similar to that used inaugmented reality headsets such as Microsoft’s HoloLens. This technology isdifferent to the so-called Head-Up Displays. They typically show images in a smallbox, projected close to the bottom of the windscreen. Whereas with Wayray, thistechnology offers a small system which make a large field of vision possible, so thedriver can see the whole windscreen.

For Yunseong Hwang, Director of the Hyundai Motor Open Innovation BusinessGroup, the windscreen of tomorrow “will not longer be merely a piece of glass”.Underlying this statement, is his confirmation that augmented reality will make itpossible to establish new environmental services related to the externalenvironment.

The field of possibilities is large, more so with the emergence of smart cities, wherethe requirement will be that everything is connected, it will be possible to integrate allforms of information in real time (commercial, weather, traffic-related or alerts fromthe smart home...) Innovations presented at CES Vegas perfectly illustrate these newpossibilities.

Samsung highlighted the real-time association of data issued from our smart homeand from our vehicle. The South-Korean giant displayed the value of Bixby, theequivalent of Alexa or Google Assistant, in an autonomous car. In the scenariopresented at CES, it was possible to imagine your connected fridge via a digitaldashboard. Depending on the lack of food analysed by image recognition, the launchof ordering in local mode could be operated via Bixby. Of course, these orders wouldbe placed with Samsung’s retail partners.

Wayfair’s AR windscreen slots perfectly into this interconnected service dimension!

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The multiplication of the information display real time will only make sense if the car

is autonomous.

As mentioned in the preamble, Alibaba represents one WayRay’s first investors. This

is hardly surprising, given the investments made by the Chinese giant in all facets of

life (health, finance, smart home, smart city). This connected windscreen could then

become a real interface for the personal life assistant made by Alibaba.

A reminder of the Alibaba ecosystem below.

Last but not least WayRay was chosen as a finalist in the SXSW Interactive

Innovation Awards 2019. This really does prove that we will not hear the end of talk

about this company in years to come; the autonomous car and the Smart City will

oblige!

SMART CITY AND AUTONOMOUS LOGISTIC

According to McKinsey, the delivery of the ‘last mile’ costs companies more than $86

billion and represents 28% of the total cost of goods transport on a global scale in

2018.

The high costs linked to the logistics of the last mile are particularly present in urban

areas, and have a disproportionate impact on margins. To remain efficient, operators

absolutely must automatise this last stretch!

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Urban logistics are becoming ever more important in the city centres, and currentlytake up between 10 and 20% of public space, solely for the distribution of goods.

Amazon is the ultimate example of this! Amazon Prime Now is opening warehousesin the heart of the world's largest cities. This initiative will make it possible to keep apromise of efficiency to its Prime membership community. In an era when time isbecoming digitalised and accelerating, it is essential to optimise citizens’ time; "Givepeople the time they need to live their life, rather than drive around town for theirgrocery shop" (see table below showing Prime membership in the USA)!

Cities are reinventing themselves due to the impulsion of a great wave of‘logistification’. The principle is to respond as quickly as possible to a more and moreexacting client!

Smart cities and logistics have common goals and can cooperate! On the digitalfront, deliveries are perfectly optimised. The result: it’s better to bring the goods tothe consumer than the consumer to the goods!

Amazon is even preparing black flies for the urban hive of the future, which will carryan integrated logistics system. These drones will be the home delivery operators.(see patent below)!

The high costs linked to the logistics of the last mile are particularly present in urbanareas, and have a disproportionate impact on margins. This budgetary inflation isforcing different operators to turn to automation for the last mile!

Retailers such as Kroger or Tesco are beginning to test the strategy in view of thetable below. Autonomous delivery has garnered increased attention from otheroperators over the last few months.

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AMAZON AND JD.COM

Until now, Amazon’s autonomous robots have been limited to moving products roundAmazon’s warehouses. But today, these robots move around with delivery to Primecustomers as their aim.

One of them is called Scout (a particularly well-chosen name). It is a smallautonomous delivery vehicle the size of a picnic cooler, which moves at walkingspeed.

Amazon is testing it in a neighbourhood in Snohomish, Washington state. Currently, afleet of six scouts are testing parcel delivery for Amazon from Monday to Fridayduring the day. For security reasons, these robots are for the moment accompaniedby an Amazon employee.

In response, in February 2019.,FedEx Corp. announced a partnership with Walmartand Target to test robots who were responsible for same-day delivery to customers.Similarly, Baidu at CES 2019, with its Apollo platform, will also sign a partnershipwith Walmart on this same area.

Amazon is looking even further; it has recently invested 700 million in Rivian, acompetitor of Tesla, and $530 million in Aurora, an autonomous driving start-up.According to an Amazon spokesperson, “Autonomous driving can help make ouremployees and partners work more safely and more productively, whether in alogistics centre or on the road.”

A giant of electronic retail, JD.com was at CES for the first time ever. JD.compresented itself as ‘Delivering the Future of Shopping’; this slogan was proclaimed byits flag.

As a reminder, JD.com is the only large electronic retail company in the world to usea internal logistical network on a national scale. This could potentially deliver tocustomers at their homes.

JD.com is therefore managing the A to Z of delivery of its products to its finalcustomers!

As mentioned previously, JD.com has launched a new research centre in Xiongan inChina. This laboratory is dedicated to the development of automation technologies ofthe future, in touch with urban logistics in China’s intelligent cities.

At the beginning of 2018, JD.com launched two intelligent delivery stations in thecities of Changsha and Hohhot, thus strengthening the autonomous logisticalcapacities of this giant of electrical commerce. A reminder; JD.com began dronedeliveries in the Chinese countryside.

The JD.com delivery robots can carry up to 30 parcels, delivering them autonomouslyin a 5 kilometre range. The vehicles are able to plan itineraries, avoid obstacles, andrecognise traffic lights.

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Made easily accessible in China, facial recognition technology makes it possible for

users to receive their parcels easily and completely safely. According to JD.com,

were these flying drones to function at full capacity, they could deliver up to 2,000

parcels per day.

CONTINENTAL AND ITS ROBOT CONTINGENT

The supplier Continental made a splash at CES 2019 with its parcel delivery project

involving delivery robots and autonomous vehicles!

According to Jeremy McClain, Director of Systems & Technology for Continental in

North America, “The challenges posed by a delivery robot are similar to those that we

have already resolved for automated vehicles.” He continues: “An autonomous

vehicle can be utilised nearly 24 hours day, 7 days a week. There will be demand

peaks for autonomous vehicles during the day. And when it comes to using these

vehicles outside peak periods, that's where robot delivery comes into play.”

The company known mainly for its Continental tyres wants to play a key role in the

city of the future!

NURO AND KROGER

In just a year and a half Nuro has raised $1 billion!

This young start-up was founded by two former executives from Waymo, the

Alphabet subsidiary. Their vocation is to ensure delivery of goods via autonomous

transport.

At the end of December 2018, the start-up announced that its delivery robot R1 wold

make its initial deliveries in Arizona, in the town of Scottsdale. According to the press

release, R1 will begin by making home deliveries for customers of a Kroger’s Fry’s

Food Store. A reminder; Kroger has 2,800 stores!

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ROBOMART, STOP AND SHOP “THE WORLD’S FIRST DRIVERLESSGROCERY STORE.”

We discovered Robomart last year during CES 2018. Robomart was developed by

NVIDIA, equipped with a refrigeration and heating system. Robomart is a level 5

autonomous vehicle (on this level the on-board computer takes control over all the

car’s functions). Robomart uses an onboard computer developed by Nvidia (Nvidia

Drive PX).

According to their website, the service is offered in a white label format, under a 2-

year license agreement that covers the use of the vehicle and the fleet and inventory

management platform.

For users, like Uber, all they have to do is press a button in an app to ask the nearest

Robomart to come to them. According to their manager "Just as Uber did for taxis,

we’re doing the same for retail"

This project is taking shape in 2019 thanks to an agreement between the Stop and

Shop brand and Robomart!

Stop & Shop plans to start delivering fresh products in the Boston area with the help

of Robomart autonomous refrigerated vehicles in spring 2019.

Stop & Shop says that customers will be able to open a smartphone app and call a

Robomart vehicle to their door, as mentioned previously.

When the vehicle arrives, the customer will be able to choose from a selection of

fresh products and prepared meals. A system of sensors and cameras records the

articles chosen and automatically bills the customer through the Stop & Shop app.

BAIDU OR THE BRAND CHOSEN TO MAKE THE AUTONOMOUS CARACCESSIBLE TO ALL!

Baidu, selected by the Chinese government to develop the autonomous automotive

sector, showcased the Apollo alliance, an open platform for autonomous car

technologies, since joined by Microsoft.

The Apollo ecosystem now has more than 95 partners. By way of comparison, Lyft,

who last year announced its own initiative for an open platform for autonomous

driving, has less than 10 partners.

To give an idea of the magnitude of Baidu’s ambitions, here are a few facts which

stood out in 2018.

Baidu USA partnered with the Californian company Access Services. Access Services

uses transport services adapted for people with reduced mobility and people with

disabilities. The aim of this collaboration was to deploy autonomous vehicles on

certain routes by the end of 2018.

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Another example; Baidu and the car manufacturer Chery together intend to deploy

level 3 cars in China between now and 2020.

The partnership between Baidu and Microsoft will make it possible for Apollo’s

partners outside China to use Microsoft’s Azure Cloud’s solutions. Thanks to the vast

AI capacitates of the AI Cloud, Baidu will be able to process enormous quantities of

car data.

Announced in January 2018, the Apollo Southeast Asia Fund is a $200 million joint

venture between Baidu and Asia Mobility Industries. Its ambition is to invest in

autonomous driving technology in Singapore. It will be Baidu’s first overseas

expansion. It will indeed be the commercial launch of driverless cars outside China.

At the Las Vegas trade fair, this company showcased its large scale production with

level 4 autonomous buses. They will at first be sold in Japan.

According to the road map below, the Chinese Google intends to move incredibly fast

in order to become the major world operator of the autonomous car, and this as soon

as 2021!

THE OLDER BRANDS ARE STIL AUTONOMOUS! FORD AND WALMART

At the end of 2018, Ford and Walmart entered into an exclusive partnership based on

an investment plan of €4 billion. Applied to the autonomous car, this agreement is

built around an autonomous delivery service.

Ford launched its GoRide service. This initiative offers a non-urgent transport service

to patients who need to get to their medical appointments. To start with, the service

was launched in partnership with the Beaumont Health network in Michigan, an also

with the Detroit Medical Center (DMC) which comprises eight hospitals.

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“Assisting patients with mobility problems, or those who don’t have access to

transport to get themselves to their medical appointments on time, safely and

comfortably, is a key element of the implementation of our mission with DMC”, said

Joel Keiper, Director of Strategy at DMC. “This collaboration with Ford GoRide is an

example of how we can work to respond to the needs of members of our community,

and collaborate in order to provide beneficial solutions which will improve the

patient’s experience.”

According to Ford, its GoRide has an average of 95% process reliability (transport and

being on time for appointments)

In the short term, Miami will also will also serve as a test bed for the future under the

name Ford's Transportation Mobility Cloud. It is an open-source platform for cities

and other urban mobility partners announced during CES 2019. The first partner

names for the platform were Lyft and Postmates. They will soon be able to confirm

journeys and deliveries with Ford’s autonomous cars!

AUTONOMOUS TRANSPORT OR THE PROMISE OF NEW SPACIO-TEMPORAL LIVING SPACES!

As mentioned in the section’s introduction, in 2040, 65% of the global population will

be urban, compared to 55% currently. This ceaseless urbanisation, particularly in

India and China, poses the question of lost time during transport. A driver can lose 40

minutes in Paris during rush hour. Autonomous mobility that is being improved on a

daily basis is becoming a tangible answer to this, with its cortège of personalised and

flexible services.

At the Artificial Intelligence future development summit on the 18th January 2019 in

Shanghai, DeepBlue Technology, the AI industry flagship in China, unveiled, with

great pomp and ceremony, its autonomous bus. The bus is called Smart Panda. It

incorporates 8 AI technologies.

The 8 integrated technologies are as follows:

§ automatic driving,

§ recognition of veins in the hand,

§ voice recognition,

§ personalised advertising,

§ an autonomous shop,

§ a vehicle surveillance robot,

§ automatic management of abnormal behaviour,

§ intelligent emergency handling system.

This bus’ objective is to optimise the users’ experience by offering them AI-based

solution and services. This will make it possible for them to save time by multi-

tasking (shopping, working...) all the while travelling comfortably.



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For example, the passengers can take the bus and at the same time do theirshopping. All it takes is for them to slide their hand over the biometric identificationsystem, obtain customised information, just like in Minority Report, and once theyhave reached their final destination, have their purchases debited. This post-journeypayment is like Uber’s.

The objective is simple: optimise, secure and support moments in citizens’ lives in aworld which is becoming more and more mobile, where time remains fixed in theinseparable interactions of the urban world.

IKEA OR THE INCREASE OF MOBILE LIFE EVENTS?

Far from the chaos of CES, Ikea is preempting, day after day, the smart home.

It most recent product, a pair of intelligent roller shutters worth $99 will be marketedin Germany for the first time on the 2nd February. This initiative confirms day afterday Ikea’s desire to take over the connected home. To further this, its entire existingrange of intelligent bulb and sockets work with the three main ecosystems: AmazonAlexa, Google Assistant and Apple HomeKit.

Certainly, this digital shift seems obvious, even logical! The surprise of therepositioning of the Swedish giant comes from Space10, its famous innovationlaboratory!

Following the template of the Toyota E-Palette project, a multi-service platform(Automated Mobility as a Service) between consumers and businesses within thesmart city, Ikea intends to launch in the same way. A reminder; just like Robomart, itwill be possible to order an autonomous vehicle which represents numerous servicespertaining to civic life (retail, health, co-working space...) from wherever we are. Cityand services come to You!

In this era when connected driving and autonomous driving are taking huge steps.“The automobile industry is clearly in the middle of its most radically changingphase” says the CEO of Toyota. Constant vehicle improvement remains a priority forthe Japanese manufacturer. “We are also seeking to develop mobility solutions thatwill help everyone to enjoy life, and we’re participating, at our own level, in theimprovement of society for the next hundred years. This announcement marks agreat step forward for sustainable mobility, proving that we’re continuing to diversifybeyond conventional cars and vans, by adding value, notably in customer service".


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In the latest news, E-palette intends to begin its first tests to offer alternatives to themost isolated municipalities and older populations in Japan. A total of circa villagesshould be chosen for this experience.

Under the project name Spaces on Wheels, Ikea is going to develop a platformcomprising autonomous vehicles providing spaces on wheels for healthcare, a mobilehotel, a co-working office, an entertainment area, a café, an organic farm deliverypoint, a pop-up store, a mobile hospital or walk-in clinic. This approach of coming tothe assistance of citizens where they live is similar to that of Ford and Toyota.

“

The day when entirely autonomous vehicles are circulating in our streets will be theday when cars are no longer cars. They will able to be anything.” says SimonCaspersen, co-founder of Space10

Also according to Simon, “the primary function of transport is disappearing to giveway to other functions. It could be an extension of our houses, our offices or our localcafé (...) We are on the eve of what could be the most important period of change inthe automobile industry (...) One day, in the not-too-distant future, fully autonomousvehicles could be commonplace in our daily lives. This would redefine not only themanner in which people and goods move around our cities, but also the very fabric ofour daily lives.”

Between smart homes, finance and mobility, Ikea could well gradually cover a hugepart of our daily lives! (see: diagram below).

CONCLUSION

The fabric and management of cities, traditionally dependent on public governance,appears to be sliding day after day towards the private sector. Technologicalinnovation is algorithmic and capital is abundant.

-With this in mind, many technology companies specialising in AI will seek toautomate detection, forecasting and decision-making to optimise urban flows anddeliver contextual services.

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What to make of Alphabet, who has free rein in Toronto, or Alibaba, who has beenmandated by the Chinese government to design the city of tomorrow?

Like Deepblue Technology, Baidu, Robomart, Walmart or Ikea, the operators who aredesigning the cities of tomorrow are mostly not former car manufacturers!

These remarks are confirmed by Rémi Cornubert of AT Kearney "In the past, theautomobile world was simple, very pyramidal: the manufacturer was the client whoworked with suppliers. Today, with the connectivity revolution, the autonomous carrevolution and the mobility services revolution, walls are going up. It is impossible fora manufacturer to control everything”.

Even Real Estate suddenly seems to have woken up. A property industry committedto optimisation of flow, like Thyssenkrupp, plans to participate in this large scaleinception!

Roles are being shaken by this tectonic chaos. Developers and public institutions donot seem to take into account the on-going underlying revolution! What will be theuse of them once private groups are able to do the same thing as them? In addition,these new operators are better-armed to adapt to the generation of this world whichlives in a digital era!

When a company like Ikea is aiming to transform our transport into a living space, wereally are seeing the sign of a radical change!

The previous section displays the new ambitions of the digital giants who are veryclose to our privacy. Their ambition is to transform our residences into real medicalmonitoring space, and to support every generation in real time thanks to the SmartHome. Transforming our transport into living areas is the next step. Our cities will bemoveable, automated and fluid!

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4Gen Z & Parallel Worlds Bypassing the Millennials, next generation communities and gamers are offering new playing fields.

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CONSUMERS WHO ARE STILL HIGHLY TRADITIONAL IN THEIR USE OFTECHNOLOGY

When it comes to American shoppers’ habits, using a mobile is the preferred methodfor researching product information, whether that be the price, the content or thecustomer reviews... 37% of people in 2018 compared retail outlet prices on theirmobile, compared to 24% in 2017. (source Forrester). The same is true elsewhere, aswell as retail outlets, with 33% of consumers checking product prices on theirphones. In fact, American shoppers are in the midst of a ‘data paradox’. 52% of themare concerned about the data collected by providers whilst at the same time,expecting even more personalisation. Furthermore, only 17% do not wish to sharedata in order to receive specifically targeted offers... They are connected consumersbut 45% are unaware of augmented reality, with 14% unaware of virtual reality.Because of this, only 1% of American consumers have used or regularly useaugmented reality to get to know and to try out beauty products...

The augmented reality revolution in retail remains a long way off, despite the hopeplaced in ARkit and AR Core, snapped up by Ikea in 2018. This is also the case for theend use of virtual reality. Aside from video games, there is almost no impact onconsumers, because the Facebook and Google of augmented reality do not yet exist.However, the younger generations are receptive to virtual retail, with the averagevalue of a Fortnite shopping basket being $58, used to buy dances and costumes fortheir character!

WHEN GEN Z BYPASSES THE MILLENIALS

We tentatively addressed GenZ’s arrival into consumption in our 2018 report. Thisfollowed a study carried out by the NRF in 2017. This year, the retail federation onceagain wanted to know more about the children of the 2000s, born with a Smartphone

in their hand. There are more than 2.5 billion GenZ in the world, 60 million of whomare in the USA.

For Lauren Aponte from Ypulse Inc, this generation cannot even begin to imagine apre-internet world. On average, a GenZ in the United States gets their firstsmartphone at the age of 10 (after 9 years and 3 months of using their parents’...).

They are the future of retail and represent a buying power of more than $44 billion tothe United States. As mentioned last year, more than 98% want to go shopping in aphysical store but also want to have experiences there. And according to PwC, 60%like doing their shopping in malls. But beware, because GenZ has expectationstargeted on experience and socialisation when they visit physical stores: 50% of themgo there and finish by buying on the brand’s e-commerce site (!source NRF)!

A new generation of consumer for ‘augmented’retail

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A concrete example which brings together all these points isthe Jordan Brand during the NBA All-Star Game in Los Angelesin February 2018. Jordan Brand brought together a socialaspect, experience, immersion and reactivity in its trainerssales experience via Snapchat. To do this, consumers had tofind QRCodes in various basketball courts across the city,which then produced, via Snapchat, an augmented realityavatar of the legend that is Michael Jordan. From this avatar,users could access a store on Shopify and purchase a pair oflimited edition trainers.

Delivery then took less than 2 hours, to the address of yourchoice in Los Angeles. This event unfortunately lasted a mere20 minutes, as this short timeframe was all it took for all stockto be depleted. This successful experience formed part of themost simple brief possible from the marketing director: a textsent to the creative director reading: ‘Augment the fuck out ofLA’. To continue from this first experience, Nike is now offeringthe opportunity to try on its shoes thanks to augmented realityvia the mobile app SNKRS.

However, on the e-commerce level, they are very demanding with their mobile

experience. Furthermore, 60% of them will abandon their shopping if the web page or

mobile app takes too long to load (3s maximum) or if the navigation is not intuitive

enough. GenZ perfectly embodies the ‘on-demand’ attitude instilled into this

generation by Netflix. Indeed, while millennials can be satisfied by a 24 hour delivery,

GenZ require a same-day delivery. 60% of them are prepared to pay an extra $5 for

delivery within the hour.

Numerous retailers form partnerships with Amazon or Google (Carrefour, Best buy...)

so that they can sell their products via the vocal interfaces Google Assistant and

Amazon Alexa. Many ask why these partnerships and data sharing between retailers

and GAFA [Google, Apple, Facebook and Amazon] exist. It is perhaps GenZ which

holds the answer. According to Accenture, 73% of them would make a purchase via a

voice assistant. Automated consumptions such as those which Amazon offer with its

Replenishment service suits them perfectly; according to Accenture again, 71% are

interested in these subscription packages.

However, they do not research products as former generations or the Millennials did.

They find their inspiration on Youtube, Snapchat, Instagram and TikTok.

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55% of GenZ places its trust in influencers, compared to 36% of Millennials. Moreprecisely, 44% of them use Snapchat in store (compared to 16% of Millenials). 45% ofthem head to Instagram to find new trending products, says Euclid. Marketing teamsare well aware then of where and how to target this young generation of consumers!They must be offered virtual, vocal, seamless and engaged experiences!

SEEKING TOMORROW’S AUDIENCE!

Facebook has provoked outcry around its treatment of users’ private lives with theCambridge Analytica scandal The finger is also pointed at the brand due to the publicdistribution of a non-certified app on the Apple store. This app allowed the collectionof an enormous quantity of apparently inaccessible data regarding the publication ofmobile apps in the stores. When installed on teenagers’ smartphones, it made anaverage monthly profit of $20. Facebook thereby had setbacks in terms of respect forusers’ personal lives. This began to have an impact on the trust placed in the socialnetwork, most of all with the younger generations.

According to a study carried out by Piper Jaffray in the United States, only 8% ofGenZ states that Facebook is their preferred social network. There are two networkswhich stand out among American teenagers as favoured networks: Snapchat at 45%and Instagram at 26% (study carried out in the first semester of 2018). But as thingshave shifted hugely, Tik Tok has since upset the rankings of mobile app downloadsamong American, European and Asian teenagers! In October 2018, there were 4million downloads just on American soil via the Apple Store.

In France, Tik Tok boasted 2.5 million users by the end of 2018. Tik Tok is becomingthe 5th social network among French students, behind Snapchat, Instagram,Whatsapp et Facebook.

Tik Tok to target the consumers of tomorrow

Tik Tok, formerly known as Musical.ly, is a Chinese app launched in 2014. Butcontrary to many others such as Wechat and Kuaishou (a competitor of Tik Tokbought out by Tencent), this video sharing app has been successful beyond Asianborders. It is therefore potentially a real ‘Trojan Horse’ which is being installed in ourchildren's smartphones. The company behind Tik Tok is not Alibaba, Baidu orTencent but Bytedance. This startup currently has a higher worth than Uber, with a

value of $75 billion! In China, the app is known as Douyin and is used by more than400 million people each month. There have been 800 million downloads of Tik Tok,500 million of which are active monthly users!

Tik Tok allows its users to create 15-second-long themed videos (music, dance,cooking, fashion...) to which effects are added. It is a sort of video version ofInstagram and a direct competitor of the latter’s ‘stories’. Musical.ly became knownas a musical app, but has since diversified and brands such as Sephora, and Adidaswith the shoe change challenge are beginning to get involved.

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Tik Tok’s success lies in both its loyalty strategy, based on the idea of videochallenges, and an AI which tunes into and pinpoints the interests of its users. Thesechallenges are the very DNA of Tik Tok’s success, for example the Hide and Seekchallenge or the Halloween challenge. Nevertheless, the challenge for Tik Tok will beto gain a user population of an older age group, in order to best monetise its audienceand to avoid any drift in the content, in view of the relatively young user population. Ayoung population which does however influence household purchasing.

With 42% of income generated by the app coming from the United States... beyondAI, the war between the US and China is beginning on a social network level thanks toexplosion of Tik Tok. To compete with Tik Tok, in November 2018 Facebook launchedan equivalent which goes under the name of Lasso. A new approach; an attempt tobring more youngsters into the Facebook ecosystem.

Discord: the social network for gamers, but not just gamers

GenZ is hugely invested in the world of video gaming and eSport; 20% of themregularly watch Twitch (15 million active users per day and 150 million per month).Twitch is the platform for streaming video games and eSport competitions withYoutube and Facebook. But when it comes to organising a remote party with friends,it’s the app/social network Discord which leads the way. Discord is a hybrid app part-way between Slack and Skype which allows chatter or video chatter. This app hasmore than 150 million monthly users (19 million of whom are active every day) and isvalued at $1.65 billion.

Using Discord, players can join public or private groups to discuss their favouriteplayer or game but also to organise tournaments in the neighbourhood, or withfriends. On Discord, topics for discussion go beyond gaming. You can find serversdedicated to manga, to cryptocurrency and even to meet-ups. Neither is it rare thatsome students will use Discord rather than Slack to work on group projects. AtUbisoft, video game editor, Discord is also used in this way to work collaboratively oninternal projects. You could say that Slack was reserved for those over the age of 30and Discord for those under the age of 30.©

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Discord also turns into a video game shop with its store for computers, and alsoserves as a notice board. There is only one step left to take so that Discord becomesthe gamers’ marketplace by expanding into other products as well as games such asbooks, music, board games... With the uprising of GenZ, what if Discord were tobecome a threat to Amazon?

E-SPORT: WELCOME TO THE 90s GAMING ARCADE

Genz are video gamers, 91% of them playing regularly, compared to 67% of theFrench population (source Dell). Also according to Dell, 30% of those in France areprepared to play in virtual or augmented reality and 35% find that playing allows themto create or strengthen social links. On a global level, there are more than 2.2 billionvideo gamers and the fan base will be 167 million (7.5% of the gaming population).According to Goldman Sachs, between now and 2022, the number of eSport fans willequate to that of American football fans in the world: 276 million. Also from GoldmanSachs, there exists a real opportunity for growth for the eSport audience; only 7.5% ofvideo game players in the world are fans. The American bank forecasts an averagegrowth of 14% per year over the next 5 years. The American basketball league, theNBA, launched an eSport competition with the NBA 2K game in order to collect andanalyse the behaviour and preferences of GenZ with the long-term objective of beingable to encourage them towards real basketball, in the hope that they may becomeAmerican league fans. This is a league which is hoping to decrease the average ageof its spectators which is around 40, and not to find itself in the same circumstanceas baseball, which has an average fan age of 60.

Brands must launch in this ecosystem, whether it be for communicating, recruiting,retaining customers... However, they must carefully select the competitions andgames in which they want to invest because there are several types:

Strategy, arena or sporting simulation games are preferable, even though Fortnite(Battle Royale) has had global success with its tactic of eliminating adversaries withweapons.

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THE FORTNITE PHENOMENON

Fortnite is a game played in battle royale mode, which means that winnerof the of the game is the last person left surviving. Fortnite is accessiblefree of charge via numerous gaming platforms/consoles, which has meantit has seen great success and generated a turnover of $3.6 billion in 2018.Fortnite is truly the game which eSport needed to change its standing inthe eyes of the general public. First of all, Epic, the company behindFortnite, created online competitions offering total prize money of $100million and most recently (2 February), it somewhat redefined the idea ofthe concert for the young generations.

Indeed, Epic organised a DJ Marshmello concert at the heart of its gamecard in Pleasant Park. This virtual, yet very real event brought togethermore than 10 million people, bringing down Epic’s servers.

A Fortnite phenomenon which has faced the full force of Apex Legendssince the beginning of February 2019. Apex Legends is a battle royalegame which is becoming a world-wide success, but at a far swifter pace;Swift with a capital S in comparison with Fortnite.

eSport is also an excellent way for brands to promote themselves in China, where57% of internet users play video games and 80 million are fans of eSport (sourceNewzoo). Today, the monetisation of the eSport audience is done mainly viastreaming with the help of Twitch or Youtube. It is also beneficial for brands tobecome involved with the streaming environment.

From Mercedes to Mastercard via Coca-Cola, sponsors of eSport competitions aregrowing increasingly democratic and are no longer necessarily linked to the world ofgaming. Carrefour, in France, has also taken to sponsoring this type of event.

Furthermore, in 2019 Paris will host the world final of the League of Legends game, ahistoric global benchmark for eSport, at the AccorHotels Arena. This will be themoment when company directors understand the buzz and excitement around thisactivity, and why brands need to invest before it becomes too expensive to do so.

The integration of eSport into the lives of businesses is essential today, because theworld of video gaming is redefining digital ecosystems. Digital ecosystems adaptedto GenZ which will naturally have an impact on consumption and technologies usedto consume, whether they be 5G or AR.

In terms of usage and aspiration, GenZ is the generation to follow for teamsresponsible for innovation marketing. Our young seedlings who pushed their way intothe 2000s are moving the core of social ecosystems and virtual spaces a long wayaway from the traditional Facebook or Twitter. For this generation, social linkingmeans Fortnite, Discord or Tik Tok. The experience will no longer be O2O (Off line toOn line and On line to Off line), but augmented and virtual.

Make no mistake. The Millenials no longer represent the future; they are the present.The future is GenZ! Welcome to the trade of 2020!

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ConclusionIn addressing all facets of our lives, an infinite, multiversal economy is being created, with the trade of tomorrow carried by its wake.

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MULTIVERSE TRADE AT THE SERVICE OF THE GREATER GOOD

A new cycle is beginning for industry via AI and the emergence of acceleratedtechnologies (5G, quantum computing...) Beyond a simple technologicalbreakthrough, a complete shake-up of modes of value creation is emerging. Itinvolves a complete overhaul of the raison d’être of businesses, in favour of a muchmore global ambition and a positive change. It is by becoming multiversal that tradewill in fact stamp a positive imprint on the earth. Because, faced with thecomplexities of our world and its expectations, only a global approach will make itpossible to provide viable solutions tailored to general interest. We should askourselves therefore whether general interest chimes well with total freedom...

LIFE WILL BE MAPPED AND PLANNED OUT DOWN TO THE SMALLESTDETAIL

To simplify our existence and to go above and beyond our desires, retail seeks toscrutinise and process our data. The impulse will not stop growing. Our physiologicalmovements and our emotions will be captured and processed more and more byalgorithms. Thus, a simple heartbeat, where such complex emotion can be found, willbe able to trigger personalised accompaniments. In this way, empathy from amachine is already promising us a better life; longer, more serene and of higherquality. As life continues to evolve as a continuous flow, these interactions willbecome inexhaustible sources of wealth for those who know how to offer the best-adapted services to the smallest moments of our lives.

THE ARCHITECTURE OF OUR EVERYDAY LIVES REINVENTS ITSELF

Rural and urban lifestyles are intertwining in this era of smart cities, with urban farmsand the artificial intelligence of large agricultural holdings. Urban life willnevertheless represent the future of overpopulation, with cities due to be home to65% of the global population in 2040. In touch with these new industries in our lives,smart cities are destined to redesign our everyday environment in view of flowoptimisation, mobility, spaces, and overall, health. The smart home, as close as canpossibly be to our private space, will be the cities’ flagships. Connected objectsaggregate to our bodily, domestic and urban surfaces in order to better serve us.Integrated into our daily lives with a seamless logic, this new method of conductingour business will have no trouble in becoming habitual for us.

WE ARE NEARLY READY TO ASSIMILATE OUR FUTURE

Every generation will be concerned when the increase of life expectancy and qualityof life begins to depend on environmental monitoring. Born with a mobile in one handand a games controller in the other, the children of the 2000s are on the frontline. They are used to integrating an exponential amount of information, and to theirsensory fields being completely saturated, but they expect in return an empathictechnology. Indeed, in this era of automation, of the increase in power of artificialintelligence and therefore of a type of dehumanisation, the younger generations willbe more and more in search of meaning. There is just one more step to take to get allof society on board. It will attract many followers on the promise of being anaugmented world, while others will refer to it as an altered world.

NEW GEOGRAPHIES AND GOVERNANCES WILL EMERGE

Yesterday, GAFAM* and BATXJ* were producing ecosystems of services capable ofsupporting us, whatever our time of life, wherever we may have been, throughwhichever method. Today, on the threshold of the new wave of creative destructionthat will sweep past former economic models, the plan is far more ambitious. Facedwith new challenges present on our planet (climate, bio diversity, inequality,population increase...), and with the expectations of insatiable progress (lifeexpectancy, quality of life, meaning of life), new governances will be able to imposetheir models and their laws onto unprecedented territories. It will be enough for themto surf on the overflow of public authorities and the obsolescence of legislation.

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THE ISSUE OF PRIVACY AS A KEY CHALLENGE

To be both winning in terms of quality of life and also responding to the new

expectations of our civilisation, we naturally ask ourselves the question about

individual freedom and the use of our data. Anticipating the abuse of the systems

and the acceleration of uncontrolled practices, one of the senatorial candidates for

the US presidency wants to revive the antitrust law. Elizabeth Warren registered this

law in the tradition of the Sherman act project, which historically contributed to the

dismantling of former American giants. Today, first in the firing line are Amazon,

Facebook and Google.

NEW ARCHITECTS DESIGNING OUR LIVES ARE ALREADY COMINGTOGETHER

Paradoxically to this mistrust, China is involving its champions in its national

ambition. The government has selected five open innovation platforms, each one

organised by a national champion: Baidu for autonomous driving, Alibaba for the

Smart City, Tencent for medical diagnostics, iFlytek for voice recognition and

SenseTime for intelligent vision. Directly partnered with the State, these digital giants

are making their R&D even more readily available for the benefit of their citizens.

When attention is focused on American trusts and the new Chinese empires, groups

such as Samsung, Ikea, Ford, Wal-Mart and Panasonic...etc. are also pre-empting our

life moments. They are already reinventing their models, by weaving a multitude of

partnerships and by overhauling their brands’ raisons d’être.

At the heart of this new cartography of commerce, theforthcoming economic battle will be based on a fiercecompetition which aims to conquer and hold this environmentalinfluence.

When the primary concern is close to becoming a mereshowcase for the Chinese or American technological giants,only the hope of an impossible idea can change the situation inthis already well-scripted scenario.

The businesses of yesterday and today would be well advised toenter into the paradigm of the impossible, to define the world oftomorrow and to serve the common good.

* GAFAM: Google Apple Facebook Amazon Microsoft – BATXJ: Baidu Alibaba TencentXiaomi JD.com

©photo credit : business wek

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BEST OF TECHNOS 2019

A summary of the most innovative startups identified at the four flagship shows.A true companion to the 2019 Trend Report.

PRIVATE COMMERCE RELOADED 2019 DEBRIEFING

Like to share the added value of the Commerce Reloaded 2019 conference with yourteam?

Our experts offer you a private debriefing at your home or at l’Échangeur.

More information from:

Nicolas RousseauSales [email protected] : +33 6 30 92 94 95

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- Premium access to monitoring and analysis content on Echangeur.fr for up to 20accounts.

- 2 free tickets for each of the two Échangeur conferences

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- Invitations to demonstrations of new technologies

- Preferential rates on Echangeur support services (store tours, showroom visitsand innovations workshops)

More information from:

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Trend Report 2019 - Echangeur BNP Paribas Personal Finance

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