Predictive technology is enhancing the physical retail experience.

March 16, 2017

According to Gartner, artificial intelligence powered by predictive technology is poised to make a major impact on retail. They predict that by 2020, 85 percent of customer interactions will be managed by AI. And predictive technology won’t just impact e-commerce, but physical retail stores as well.

Predictive technology forecasts future behaviors by analyzing past data patterns. It’s particularly beneficial in business and marketing settings because it detects supply and demand patterns, which allows for better planning. Here’s what you need to know about how predictive technology will affect brick-and-mortar retail, the customer experience and your work in CRE.

Customer Service

Soon, using cameras and sensors, kiosks, robots and apps will be able to make product recommendations in stores. They’ll analyze shopping patterns, tastes, sizes, and other preferences to direct shoppers to the items that are most relevant for them.

Once predictive technology is perfected, consumers will feel as though their retail experiences are tailored just for them. They’ll be able to easily find exactly what they’re looking for with the help of tools that understand inventory and preferences in a mathematical manner that’s far more exact than even the most talented customer service representative.

Merchandising and inventory

In-store visual merchandising and inventory management will also be impacted by predictive technology.

The same cameras and sensors that help shoppers select items will also be able to predict the best placement for items on shelves. With detailed data on how shoppers move through a store, visual merchandisers will be able to position items in the most effective way possible to turn over the most stock.

Predictive technology will also help stores more accurately estimate how much inventory they need to have on hand at any given time. This, combined with self-driving delivery vehicles that will accurately deliver the right stock at the right time, means stockrooms will become easier to manage. As a result, retail tenants will be able to operate out of smaller spaces and use more of their square footage to enhance the shopper’s experience. And when it comes to grocery stores, waste from unpurchased, expired product will decrease significantly.


Site selection will become more advanced as consumer behavior and spending pattern data will help investors choose the perfect location for every store, bar, restaurant, and recreation space. Physical experiences will continue to grow in importance among investors and tenants and predictive site analysis will help get the most out of a store’s physical presence.

Our phones act as tracking devices that detect our patterns every time we leave home, and investors and tenants will soon be able to see this information in aggregate. They’ll be able to assess what people are doing and how much they’re spending in specific neighborhoods, or even on specific blocks of specific streets. As a broker, you’ll be able to help them use this information to determine the best possible spot to invest in a new opportunity and to compare different locations they’re considering.

Predictive technology’s impact on CRE

Predictive technology is going to impact the way you promote and sell retail spaces sooner than you think. With physical stores like Amazon Go (which uses camera and sensor technology to streamline the checkout process) leading the charge, it’s only a matter of time before predictive technology becomes a mainstream facet of brick-and-mortar retail.

Your investors and buyers are going to start asking questions and making decisions with these technologies in mind. Retail investors and tenants will increasingly begin to prefer spaces with layouts suited for automated elements like robots and kiosks that make product recommendations. And as they gradually begin to deprioritize stockroom space, they’ll be looking for properties that are optimized for flexible visual merchandising. They’re also likely to start asking you for more data about consumer shopping and spending patterns in locations they’re considering, or tapping you to help them analyze data they already have on hand.

As a CRE professional, work to show prospective investors, buyers and tenants how any retail location they’re considering today can evolve as the outcomes of predictive technology begin to emerge. And of course, if a space you’re selling is already equipped with some kind of predictive technology, highlight it in your marketing. For many buyers and investors, the fact that your brokerage is forward thinking and up on what’s coming next in predictive technology will be enough to set you apart. With that in mind, make sure you communicate about your knowledge in this space both in conversations with investors and through marketing vehicles like your brokerage blog.

Are you curious about how other emerging technologies might impact the way you do your job? Read our blog on virtual reality and the future of the office.

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