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SXSW 2017: Tech takeaways from AI to blockchain for the fashion and retail industries

It was one very simple sentence that won SXSW this year: “We explore, or we expire,” said astronaut Buzz Aldrin, but it was technologies including artificial intelligence, virtual reality and blockchain that really stood out.

SXSW 2017
SXSW 2017

It was one very simple sentence that won SXSW this year: “We explore, or we expire,” said astronaut Buzz Aldrin, who is of course known for the Apollo 11 mission and being one of the first two humans to land on the moon.

He was talking about further space travel and the push for us to become a two planet species by also inhabiting Mars. But in its simplest form, that same sentiment could be turned to business today and the need for new ways of thinking in order to survive.

The interesting thing is historically that’s exactly what SXSW has always been about – innovation and the next big thing. Yet for 2017, there weren’t any launches like the Twitter, Foursquare or Meerkat debuts of the past to write home about, nor a big headline tech to particularly speak of. Instead and perhaps unsurprisingly, the focus was very heavily political with a particular zoom in on the fake news agenda and what that means for today’s society.

On top of that, there was more of a practical view than ever, especially for those in the fashion industry. Over recent years, the SXSW audience has become much more brand-led than before, and the content has shifted accordingly. There were numerous talks on measuring and valuing different social platforms, exploring how to do real-time video and thinking about influencer marketing, as a result.

The worry with that is attendees spend the majority of their time thinking about the now in order to deliver something seemingly measurable to the office once home, rather than taking the opportunity to really explore the next. What’s important about a week at SXSW is that ideas are exchanged and a real feel for where we’re moving is uncovered.

So here’s a view on exactly that; a look under the hood if you will at what really stood out at this year’s SXSW based on relevancy for the fashion and retail industries, but focused heavily on the future and not just application for the present.

Artificial intelligence

If there was one technology to know about while in Austin, it was artificial intelligence (AI). That sentence has to be taken with a pinch of salt, because it’s almost impossible to think of AI as a single idea, or indeed even a “trend” these days, for the very fact it is so fundamentally beginning to underpin everything we do.

Christian Ward, senior editor of media and marketing at trends service Stylus referenced Microsoft CEO Satya Nadella, who said: “We are on the cusp of a paradigm shift in computing that is like nothing we’ve seen in decades.” We’ve been living in a world that has slowly become mobile-first, he explained, but we’re moving to one that is ultimately AI-first.

Amy and Ray Kurzweil, SXSW 2017
Amy and Ray Kurzweil, SXSW 2017

The view at SXSW was broken down into really what this means, both at a top line societal level and at the more applicable brand one.

Ray Kurzweil, author, computer scientist, inventor and futurist, for instance, stood by his prediction that we’ll achieve Singularity – the idea that machines reach human consciousness – by 2029. “I agree it will take 40 years at today’s rate of progress to reach Singularity. But we’ll make 40 years of progress in 13 years because the rate keeps accelerating,” he explained.

It’s that idea that raised the most concerns of the week. While Kurzweil sees it as an extension of ourselves and of benefit to society, rather than a dystopian view of robots taking over our culture once they can make their own decisions, others see a more practical yet negative version of this where robots do indeed become a dominant force and it’s human jobs they’re ruling.

Bill Ford, executive chairman of Ford Motor Company, for instance argued that autonomous vehicles are not only coming but will be incredibly advantageous to urban populations. The issue we have to get ready for is what that looks like for the estimated 3.5 million truck drivers in the US alone it will render unemployed.

“As a society, the benefits will be awesome, but we have to think about the impact on individuals… We have to start training people now for redeployment. We need to think about what transitions we can do as a society to get ready for these things,” he said.

Science fiction author Bruce Sterling, meanwhile, took that one step further in his annual closing keynote of the festival, by arguing that our ancestors wouldn’t congratulate us for giving humanity to robots. He outlined a myriad of potential circumstances that might follow a universal basic income setup, each of them no better than the last. “We’re using the turbulence of technology to ignore the needs of future generations,” he said, pushing back on the very idea this is a smart move. “When we say our machines are rendering us useless we are buying into a suicidal mentality. Lethal moral despair is one of our vices.”

The flip of that existential debate at SXSW was around how AI is infiltrating at the brand level. In this space, it’s really about making sense of complex data through machine learning, therefore enhancing and augmenting capabilities rather than merely removing human roles.

Harley Davidson for instance uses an AI tool from Adgorithm called Albert to match similar audiences to its current database – finding lookalike customers who might be interested in purchasing a motorbike through machine learning. It now attributes 40% of its sales in New York to this, Ward at Stylus explained.

He also highlighted that lingerie brand Cosabella has worked with AI company Sentient Technologies to test the design of its website in real-time. In doing so it condensed six months of testing into 30 days and saw a 38.4% lift in conversions. Cosabella has also worked with Albert.

Both examples present relevance to the wider fashion industry to think about around data analysis and web integration. But Disney also took to the stage to talk about how it is using AI as a tool for storytelling. Jon Snoddy, who leads the R&D studio for Walt Disney Imagineering, said: “The exciting thing for us about AI is the way it’s going to allow us to get closer to our characters. In the old days there was the stage and the audience and they were kept separate. Now we can do things that allow the characters to be among the audience.”

For retail, this particularly links to the rise of chatbots; the idea that customer service is handed out to an artificial intelligence. This was a big emerging focus of 2016, with the debate this year swinging to whether they’re working or not.

Burberry's Facebook Messenger chatbot
Burberry’s Facebook Messenger chatbot

“Even the most basic [chatbots] are helping to make the concept of efficient interaction with brand marketers much more mainstream,” Ward explained. There are now 34,000 available via Facebook Messenger.

With the technology still so early, several panels discussions at SXSW focused on the idea of keeping the conversations simple so as not to overpromise to the consumer. “There’s absolutely a purpose for a bot in our lives. A good bot does one thing really well, and that’s it. If it can crush it, that’s key,” Sam Olstein, global director of innovation for GE Corporation, said.

Empathy and the human experience

A key further discussion around chatbots lay in the need for personality. As it stands, most interactions feel as though you’re dealing with a machine at the other end, with a focus on utility and practicality (whether on Facebook or via the wave of voice based interfaces in the likes of Alexa and Google Home), and not on the human side of emotion, speakers said. That’s where the opportunity lies.

A keyword that kept coming up time and time again, therefore, was empathy. As Ben Hourahin, strategy partner at AnalogFolk wrote for AdNews: “The central question has frequently been the same. How do we bring human nature into the machine paradigm? VR & human behaviour, AI & human cognition, BOTS & human emotion – while the sessions go on and on – the integration of ‘HI’ (human intelligence) has been the central question in pretty much all of them. We absolutely have to develop more human like interactions in this space if we are to make them truly consumer friendly.”

“Let’s put emotional intelligence and emotional tolerance back in the centre of the way that we design these AI experiences,” said Nilesh Ashra, director of creative technology at Wieden+Kennedy Portland, ahead of the festival.

Melanie Cook, strategy and consultancy lead at SapientRazorfish, took this one step further by focusing on the idea of a combination of humans and machines as the magic. “It is estimated we have a 30 year grace period before AI completely takes over the workplace. We therefore have a once in lifetime opportunity to design it to augment not replace us… if we don’t, we will lose the opportunity to embrace it at all,” she explained.

In doing so she outlined the difference between AI and IA, or intelligent augmentation. Where AI is about reproducing human cognition and functioning autonomously, IA is about supplementing and supporting it, leaving the intentionality of the human at the heart of it. Something like IBM Watson, for instance, is really an IA business, she explained – it helps people with the massive amount of unstructured data out there.

By shining a light on things that a human alone can’t do, and focusing on this idea of augmentation primarily, we can design empathy and relevancy into it, she noted.

Life of Us, a VR experience from Within at SXSW 2017
Life of Us, a VR experience from Within at SXSW 2017

The other side of empathy that played a big role at SXSW this year was in virtual reality (VR). While not a new trend for the festival in any sense, VR got a big play for 2017, with an entire exhibition dedicated to it, showcasing experiences from NASA through to milliner Philip Treacy.

The most talked about however was Chris Milk and Aaron Koblin’s Life of Us. A story about evolution, participants start as a single-cell organism and end up as a post-human robot, but it’s the fact it’s a shared experience that stood out – two players could take part at the same time in Austin, which once again presented the idea of empathy for other people.

This notion is central to Chris Milk’s work – the artist and founder of VR company Within, which is also particularly known for its projects with The New York Times. “What is meaningful is the reaction ‘What I just experienced really touched me’, that is how I know I have done my job,” he said at SXSW.

His earlier talks have also focused on the idea of building an empathy machine. Entering into the VR world is enabling the viewer to feel, he said. This is because for the first time, it’s enabling us to go beyond the frame. If you think about everything we watch at the moment, it’s about a window – a box on Youtube, a box in our front rooms, a box that we hold in our hands – now we’re stepping inside that box, that frame, and we’re entering into that world, he explained.

Now by building social VR, he hopes to remove the isolation that is a major criticism of usual experiences. “The shared experience is the social connected tissue of life and that binds us together as people… [we can use] art and media for that,” he said at SXSW. To bring it full circle, in the long term we will also have to have some form of AI alongside to drive the shared experience, he added.

Transparency and trust

A third big focus of SXSW surrounded the lack of trust we currently feel as a society – the result of today’s political landscape, the fake news debacle and more. The annual Edelman Trust Survey, shows we’re at a historical low for trust in institutions from governments to banks, the media, retailers and more at present. Only 15% of the global population feel the system they live in is working around the world, and in two thirds of countries only 50% of the population have trust in institutions.

The ramifications for consumer spend off the back of such distrust is real, making retailers just as susceptible as any other form of institutions to this effect.

The big focus at SXSW therefore was about how to use technology to start reintegrating trust into systems, with blockchain another key topic of panel discussions.

This is referred to by Gartner as a “type of distributed ledger in which value exchange transactions are sequentially grouped into blocks”. It’s essentially another layer of the internet, but importantly a secure and recorded one.

As described at SXSW: “It’s a record of assets, or any other kind of content, that is shared, replicated and encrypted so it becomes a verified and immutable source of truth.” That’s because the blocks can’t be modified, but can be viewed, meaning a huge benefit lies in the added trust and transparency that provides. It was once about cryptocurrencies alone (like Bitcoin), but can now be applied to a multitude of verticals, including fashion, where there are interesting impacts to be had from a supply chain perspective particularly.

Dr Tomicah Tillemann, senior fellow and director of New America’s Bretton Woods II program, said: “The reason this matters for all of us, is that institutions right now provide the facts at the foundation of our reality. I know there’s a land registry somewhere that says I own my house. I swipe my card because I know the bank will transfer the right money for me… As soon as people lose confidence, those systems start to break down really quickly. The exciting thing about blockchain is that it has the potential to create a layer of authentication and validation that can’t be tampered with. Beyond malevolent bureaucrats, it’s a layer of reality locked in mathematically, and it’s locked in permanently, which is something we’ve never had before.”

This team are applying it to governments and areas like land registry particularly, but IBM was also pushing blockchain in a big way at SXSW, and its application was much wider. It refers to an underlying shift happening to the internet – “transforming from a medium for information to a medium for trading and tracking value”. It’s about everything from the exchange of money between two parties, to documenting how goods move through a supply chain, and the making of contractual agreements, as explained in the video below.

It’s just announced a new blockchain solution with Maersk that will manage and track the paper trail of shipping containers across the world by digitising the supply chain process, for instance. 90% of goods in global trade are carried by the ocean shipping industry each year – the aim of this is to enhance transparency and secure sharing of information among the trading partners.

There are also applications for tracking the legality of diamonds, for instance, or for securing sustainability in a fashion business. Speaking to the IBM team at their SXSW house, the key to recognise is that blockchain isn’t an application that retailers can just buy, but a network for trading that the world is slowly going to move towards.

The overall benefits lie in the fact it is ultimately time saving, removes costs, reduces risk and increases trust. Look out for a deeper dive on what blockchain means for retail and the fashion industry over the next few weeks.

By Rachel Arthur

Rachel Arthur is Editor-in-Chief of Current Daily, the leading news source for fashion, retail and innovation, and the co-host of its weekly Innovators podcast. She otherwise serves as Co-Founder and Chief Innovation Officer of Current Global, a transformation consultancy driving growth within fashion luxury and retail. By background she is an award-winning business journalist and consultant, contributing to titles including Wired, Forbes and Business of Fashion.

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