The next wave of algorithms will have a hugely disruptive effect on retail by not only hunting down appropriate purchases for consumers, but then scouring online for the best deals.

The first stage of curating search engines, such as TripAdvisor, Expedia and Google Flights, has virtually replaced the high street travel agent, Bobby Gibbs and Nick Harrison of Oliver Wyman’s Retail and Consumer Goods Practice write in the Harvard Business Review.

The new generation will be even more customer-centric, offering greater transparency, neutrality, and an unlimited choice – and, if anything, be even more disruptive.

“Just as flight intermediaries such as Google Flights, Hopper and Skyscanner find the lowest possible prices, agnostic digital retail curators could direct consumers to the retailer offering the best deals — or advise them to delay a purchase when a promotion is likely,” they say.

“In the same way that Expedia makes bookings directly with hotel chains, these digital curators could negotiate terms directly with manufacturers.”

By this time, retail curation will become an industry on its own, changing the structure of the retail sector, and capturing a “significant share of retail sales,” say Gibbs and Harrison.

Their research shows the three biggest online travel intermediaries — Expedia, Booking Holdings, and C-Trip — made up almost 20% of the global travel market’s $1.3 trillion in sales in 2017. And they calculate these companies took over $25 billion in fees, with annual growth rates of between 20% and 45% forecast.

“We believe that retail curation could follow a similar trajectory,” they say.

Market mappers like Google Shopping, for example, might currently search for the best dishwasher for a certain price and show options to buy related things like detergent. It then sends the consumer to the appropriate online store.

“But in the future, we expect these agnostic curating engines will scour the planet to create baskets with optimal combinations of low-cost household goods – much as Skyscanner and Kayak now find the best options for trips that require multiple flights. These engines will consider not just products’ price but delivery and other potential costs to suggest the best deals.”

Algorithms will also tailor offers to individual shoppers, while the increasingly sophisticated filtering of review aggregators will mean consumers see only those reviews most relevant to them and, crucially, those that are most trustworthy.

Sourced from Harvard Business review; additional content by WARC staff