Toyota’s “Smart City” Heralds a New Era for the Retail Experience

Toyota’s “Smart City” Heralds a New Era for the Retail Experience

Jul 21, 2020 • 5 min

Updated: Jul 21, 2020

Note: For more information on how COVID-19 has forever changed the game for brands, check out our eBook Return to Market: Trends and Tactics for the New Normal


Utopian or dystopian? You decide.

At the foot of Mt. Fuji, Toyota is developing a fully-connected “smart” city; an interactive ecosystem powered by hydrogen fuel cells. Called the “Woven City”, it will be designed by famed Danish architect Bjarke Ingels and house up to 2,000 people, including Toyota employees and their families. The company expects to break ground at the end of 2021.

What does this have to do with retail brands? Everything.

The pandemic has forever changed the way people shop. The digital transformation of the in-store experience — predicted to take years — has already happened. Behaviors like online shopping and delivery have become normalized to an extent like never before. Contactless in-store experiences aren’t just some fancy idea on the roadmap, they’re table stakes.

Toyota’s connected-city concept now paints a picture of the next evolution in how digital will transform brick & mortar. For retailers that want to stay alive, there are some key lessons to be learned about what this city means for the future of data collection, shopper interactivity, and privacy.

Clearly not selling cars at Woven CIty, the man-made city will be a physical space that is driven by data. Envisioned as a “living laboratory,” the Woven City will serve as a home to full- time residents and researchers who will be able to test and develop technologies such as autonomy, robotics, personal mobility, smart homes and artificial intelligence in a real-world environment.

With this prototype future city, Toyota is practicing the data-capture mindset. Data and user experience are not treated as separate entities that work independently of each other, instead each one informs the other. In Woven City, Toyota will be able to gather their own first-hand data, then use it to optimize their design choices and smart technology.

What are they doing? What are brands can learn in the retail experience?

Photo courtesy of Toyota

What Will Woven CIty Look Like?

Toyota is calling the site “Woven City,” a reference to weaving together three different types of streets or pathways, each for a specific type of user. One street would be for faster vehicles only. The second would be a mix of lower-speed personal mobility vehicles, like bikes and scooters, as well as pedestrians. And the third would be a park-like promenade for pedestrians only. “These three street types weave together to form an organic grid pattern to help accelerate the testing of autonomy,” the company says.

The city is planned to be fully sustainable, with buildings made mostly of wood to minimize the carbon footprint, using traditional Japanese wood joinery, combined with robotic production methods. The rooftops will be covered in photo-voltaic panels to generate solar power in addition to power generated by hydrogen fuel cells. Toyota plans to weave in the outdoors throughout the city, with native vegetation and hydroponics.

A lot of these new technologies are already in the works in various Toyota labs across the globe. The idea of Woven City, as Toyota president Akio Toyoda described it during a press conference at CES, is to test all the ideas in one place.

Photo courtesy of Toyota

What This Means for Shopping

As the company envisions it, buildings, vehicles, and humans will talk to each other through all kinds of sensors, and homes will be equipped with AI assistants that monitor everything from people’s trash to their health. Meanwhile, autonomous vehicles like Toyota’s own E-Palettes—a self-driving shuttle that doubles as a mobile retail store—will move people around as robots underground take care of deliveries. To mitigate the city’s climate impact, buildings will be made of wood, which has a smaller carbon impact than concrete, and the entire ecosystem will be powered through hydrogen fuel.

Robotic and contactless shopping will be the future, coming sooner than anyone expected due to the coronavirus pandemic, and this city will test the integration of technology and robots into the retail space. Just think of Amazon’s Smart shopping carts which uses cameras, sensors and a scale to automatically detect what shoppers drop in and charge their Amazon accounts- effectively removing the need for cashiers. This city will test how implementation of these technologies can be integrated city-wide, and not just on a store-by-store basis.

Photo courtesy of Toyota

What this Means for User Data Privacy

Residences will be equipped with the latest in human support technologies, such as in-home robotics to assist with daily living. The homes will use sensor-based AI to check occupants’ health, take care of basic needs and enhance daily life, creating an opportunity to deploy connected technology.

This city will test how willing, and to what degree, people will be willing to share their user data for personalized and tailored experiences at a mass level. Toyota is currently accepting applicants for future residents when the city opens and time will tell how helpful, or invasive, the smart technology is.

Photo courtesy of Toyota

What We Can Expect in the Future

COVID-19 has been a transformative push for the world in the shift to digital. Out of necessity during the pandemic, a shift has started where Americans have been more willing to give up personal information for personalized and contactless shopping experiences. Although at first hesitant to adopt these technologies, experts expect these changes to be long-lasting and a pivotal change to the post-covid consumer.

The US has seen strong adoptions in technology during shelter-in-place for ease of service that, in any other circumstances, would have seemed uncalled for or as an invasion of privacy. In fact, only 24% of consumers see personalization as the result of sharing data, and just 15% feel they’re getting good value from granting access to their data.Overall, when it comes to data collection, Americans see more risks than benefits for their personal data.

However, brands are saying that one of their top priorities post-covid is going to be 1:1 personalization with 85% of marketers saying personalization should be a bigger priority in their organization. With the amount of time being spent online, and many people shifting their world to online via work, school, banking, etc., there is a higher risk of those who are not strongly digitally literate to be victims of hacking and scams.

As Google phases out first and third-party cookies, expecting to have a completely cookie-free landscape by 2023, consumers aren’t as worried about personalized ads as they are with the government and brands looking at their data. If brands emphasize the value-added of personalization and practice transparency in data usage, consumers are more likely to opt-in to personalization programs.

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