Technology news website Recode hosted last week’s Code Conference to explore key trends in the tech industry. The conference featured talks and interviews from major players from Silicon Valley. Topics ranged from artificial intelligence to the colonization of Mars.

Retailers will benefit from venture capitalist Mary Meeker’s 2016 Internet Trends Report. In her 213-page slide deck, she offers insights into the latest trends in digital technology, ecommerce, online marketing and consumer behavior. Industry leaders such as Amazon’s Jeff Bezos and eBay’s Devin Wenig also spoke about artificial intelligence and offered their vision for their respective platforms.

Why Video Ads Don’t Work and How You Can Improve Them

Digital platforms and social media have opened many doors for brands to market their products, but recent trends in online advertising suggest that these avenues are not always profitable. Meeker’s Internet trends report included dismal numbers from Unruly, a video ad tech company in social video advertising.

In a survey of 3,200 Internet users, Unruly found that majority of consumers today dislike the profusion of video ads and are actively avoiding them.

The survey found that most online video ads are ineffective because:

• 81% of people mute video ads.
• 62% of people are annoyed or put off by brands forcing “pre-roll” viewing.
• 93% of people have considered using ad blocking software.

These numbers align with Meeker’s findings that the Internet is slowing down at the macro level. Consumers are becoming harder to target as they discover products outside of traditional web browsing and paid search. Consumers can tell when they are being advertised to, and it’s too easy for them to ignore those advertisements.

Brands no longer have the power to influence purchases; consumers do. This is why retailers need to have a social commerce strategy and strive for relevance and authenticity.

Meeker offers some advice on how video ads can be improved. In today’s advertising landscape, video ads need to be:

• Authentic
• Entertaining
• Evoke Emotion
• Personal and Relatable
• Useful
• In-context
• Brief

In addition, the viewers need to have control of the content, meaning that the videos can be muted or viewed at a later time. Videos need to be in a non-interruptive ad format and work with the sound off. This way, the viewer will feel respected and empowered to make decisions about the brand.

Amazon Echo Offers Faster Shopping with its Alexa Technology

Amazon currently has three main pillars to their business: the marketplace, Amazon Prime, and Amazon Web Services. Amazon’s breakout product, Amazon Echo, could be the fourth pillar to this tech giant’s business.

Powered by the Alexa software, Amazon Echo offers faster and easier shopping on its marketplace, bypassing the need to search and buy products through a browser. It is three times quicker to shop using a microphone than it is to navigate through menus on a desktop computer or mobile app. And by eliminating a shopping cart, you also eliminate shopping cart abandonment.

Jeff Bezos, founder and CEO of Amazon, spoke at great length about the role of artificial intelligence in developing the Alexa voice assistant. For the past four years, Amazon has been working behind the scenes to develop Alexa’s intelligent voice command and machine learning technologies. The team currently working on the Alexa AI and Echo hardware is now more than 1,000 employees, Bezos said during an interview at CodeCon.

Bezos outlined how Alexa is both a customizable platform and an embeddable technology. Developers can build new “skills” for Alexa and continue to its learning, giving it new capabilities. Makers can even embed Alexa’s AI technology in their own devices, such as an alarm clock.

eBay’s Relevance in an Amazon-Saturated World

eBay is not just a platform to buy used items, says eBay’s CEO Devin Wenig. Neither is it just an auction site anymore. In fact, used item sales are making up a small and declining part of the business, Wenig said.

During the Code Conference, Wenig spoke about differentiating his company from Amazon. "That's why we sell $90 billion worth of stuff a year," Wenig said. "I think there's an idea that I need to be like Amazon. I don't. The world doesn't need an almost-as-good Amazon. They need a better eBay."

He spoke about improving the shopping experience and using artificial intelligence to eliminate fraud and deliver a highly personalized eBay, one that is relevant and curated.

"I'd rather have a billion unique items that arrive in three days than a billion commodity items that arrive in an hour," Wenig said. "That's our business and that's why we're unique."

Retail Continues to Evolve with Consumer Demand

Customer demand is the catalyst that impacts the evolution of retail and distribution channels. Meeker’s report highlights the spending power of millennials, which will rise significantly in the next 10 to 20 years. For retailers to survive, they will need to cater to millennials’ requirements.

This revolution can be a boon and a scourge for many retailers. It forces traditional retailers with physical stores to move their business online. While traditional retailers are increasing their digital and ecommerce presence, more and more digital-only brands are planting physical locations and showrooms, ultimately becoming data-optimized physical retailers.

For example, Warby Parker is an eyewear brand that started out as an online-only company. Today, Warby Parker is among the top grossing physical retailers per square foot in the US, with 30 physical locations in the U.S. Providing a consistent omni-channel experience is key to satisfying consumer demand.

In the same way, the Internet is empowering products to evolve into brands. Casper, for instance, changed their business model from only selling Casper mattresses online to launching showrooms in Los Angeles and New York. They have also expanded their product offering to include pillows and sheets.

Gerald Storch, CEO of Hudson’s Bay Company, put right when he said that the future doesn’t belong to Internet-only companies. During his keynote at the Shoptalk conference, he said that the future belongs to customer-facing brands that meet the needs of customers, however they want it, whenever they want it. In the same way, all companies will be Internet companies, or they won’t be companies at all.

Companies are Leveraging Data to Attract Consumers

When it comes to retail, it helps to know your customers. But collecting data at a large scale takes this to a whole other level. According to Meeker’s report, Internet-enabled retailers and brands are on the rise, bolstered by always-on connectivity, hyper-targeted marketing, images and personalization.

Technology, media and distribution are becoming increasingly intertwined when it comes to attracting customers and driving sales. Meeker gives a threefold summary of the current business model applied by today’s innovative ecommerce companies:

• Drive transaction volume
• Collect and use data
• Launch new products or private labels

In today’s competitive market, the smart retailers are the ones tracking sales performance and studying consumer behavior each time they sell products. By using this data, they can develop personalized marketing strategies and sell better products that cater to their target’s specific needs.

Hyper-targeted marketing creates relevant ads that are in-context and based on the customer’s browsing history and preferences. It inspires an intent to purchase, fueled by personalized promotions and retargeting strategies. This type of marketing drives growth for retailers, products and brands. Social media is also a major driving force for new product introductions.

Meeker ends the presentation with slides on security and privacy concerns. With so much data being collected by these ecommerce companies, there’s a question of how these businesses are using customer data. In a report by Gigya, 45% of people are more concerned about their online privacy than they were last year. Similarly, 74% of respondents said that they limited their online activity in the last year due to privacy concerns.

Despite these concerns, it doesn’t look like the data-driven business model is slowing down any time soon. In fact, more and more companies are fusing data collection strategies with artificial intelligence. With our daily lives becoming more and more intertwined with technology, companies like Google, Amazon and Facebook will continue to learn about our habits and preferences. Will consumers react positively to increased relevance and personalization, or will they be creeped out by data-driven promotions?

Many other leaders in the tech industry spoke on artificial intelligence. IBM CEO Ginni Rometty said that AI will impact everything in our lives in the next five years, and automation will definitely impact the job market.

Retail is likely to be affected by this technological shift. Artificial intelligence is becoming a powerful tool to improve commerce, while data collection is now a necessity for brands. By leveraging new technology and harnessing data, retailers can provide a customer experience that's relevant and personalized.