In this forward-looking episode of Leaning In, Terry Montesi is joined by Bart Higgins and Katie Hillier of Future Perfect X, to explore how artificial intelligence is transforming the future of human behavior, retail, and placemaking. Drawing on their deep backgrounds in design, anthropology, and innovation, Bart and Katie unpack how AI will shift the foundational drivers of consumer experience and commercial real estate. From programmable biology and co-intelligent AI agents to personalized retail journeys and ambient environments, they illustrate what it means to future-proof a business in the age of the “limitless self.” This conversation challenges leaders to rethink how places are designed and how brands will maintain emotional relevance in an AI-mediated world.
They discuss:
- Why understanding the future human is more important than understanding the technology itself
- How AI will alter core human traits like identity, emotion, and decision-making
- Why the commercial construct of retail must evolve beyond the needs-based and self-growth economies
- What the rise of avatars and AI companions means for brand loyalty and physical retail
- How retail developers can position themselves as tastemakers in a world of infinite content
This episode is a must-listen for anyone shaping the future of consumer spaces, brands, or experiences.
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Transcript
Terry Montesi: I’m joined today by two forward-thinking voices from Future Perfect X, Bart Higgins and Katie Hillier. Their work sits at the intersection of brand, business, and what’s next, helping companies reimagine the future and how they connect with consumers in a world being rapidly reshaped by artificial intelligence. In this conversation, we unpack the concept of the limitless self and explore what AI means to the future of human behavior, retail, real estate, and placemaking. Bart and Katie bring a very sharp perspective on what’s next, grounded in real-world experience and big-picture thinking. Let’s lean in.
Hey, good morning, Bart and Katie. And why don’t you guys start by telling my audience about your background and how you ended up as futurists and innovation consultants.
Bart Higgins: Well, hey, thanks. Thanks for having us, Terry. It’s always a pleasure to chat with you. So Katie and I have a company called Future Perfect X, and we’re in the business of helping our clients understand how the world is changing, predict what’s coming, and then design solutions that enable them to adjust their businesses and their offerings and enable them to grow as businesses within this kind of ever transforming world that were in, which seems to be transforming faster and faster in real time.
Just a quick background on me, and then I’ll let Katie introduce herself as well. I kind of came to this world of innovation from the design side of things. Years and years ago, I worked at Wired Magazine, and I was given the job of opening up, designing and opening up offices around the world for Wired, and that got me into the commercial real estate and office business. Then I jumped into helping run a retail design agency called Pompeii AD, which was pretty famous for things like Anthropologie and Urban Outfitters. I kind of cut my teeth on understanding how retail works there. And then from there, I jumped to an innovation company, which is where I met Katie, like 15 years ago. We’ve been like best buddies ever since. And there, I kind of ran the global retail and experience innovation group.
Terry Montesi: What was the name of that firm for our audience?
Bart Higgins: That’s called What If Innovation, which is no longer What If Innovation, now they were purchased by Accenture. Accenture bought that entity and has kind of folded their perspective on innovation into their business model.
Terry Montesi: Doesn’t sound very innovative, but maybe it is.
Bart Higgins: Well, big companies have to figure out how to stay innovative too, and buying a small innovation group is a good way to do it.
Terry Montesi: Yeah. Got it.
Katie Hillier: Great, and yeah, Terry, thanks for having us on board as well. I’m so excited to be here. To give your listeners a little bit of my background, so I’m this random blend between digital anthropologist and strategic innovation leader. I’ve spent over 15 years running digital anthropology labs, which is qualitative and quantitative consumer research inside of large global innovation companies like What If Innovation and then later Accenture, as Bart mentioned. But a lot of my background is how do we understand deep human needs to drive innovations that actually matter for people and make impact. So that’s taken me from LA to New York to London. I’m back in Los Angeles now.
Terry Montesi: Fort Worth.
Katie Hillier: To Fort Worth of course.
Terry Montesi: Prior innovation recession.
Katie Hillier: Exactly. And yeah, Bart and I now are partnering and bringing our smarts together to help companies grow in this world of accelerating change and uncertainty.
Terry Montesi: Great. Thanks, Bart and Katie. And I’d like for you guys to help my audience understand not just what you do, but how you do it. How does one go about being an innovation consultant?
Bart Higgins: It’s a great question. Well, it’s interesting. Katie and I, we worked for the big dog kind of industry before, the big agency world. And when we were part of that world, the big innovation and creative consultancy world, one of the things we realized is that those big agencies, they’re monsters. They’re hard to turn, they’re not very nimble, and it’s rough for them to adjust to the way businesses are trying to adjust.
So we stepped out to create Future Perfect to be a nimble, bespoke kind of small, strategic partnership with companies like yours or with big companies like Chanel or Four Seasons, whoever it might be, to help solve these big business challenges. And the way we think about things is first to understand that there’s a bit of a gap in the world between a business and the business challenges they have and the solutions that are available to them, which are typically tactical agencies, like an architecture firm or a real estate planning and master planning group or a product design team.
What we want to do with our business is live in between the business need to grow and sustain themself and the executional piece to help the businesses figure out what’s going on and what they need to do to survive in the world. The way we look at it is through this lens of why, what, and how.
In order to innovate, the first thing you need to understand is why there’s a need out in the world. Why does a consumer somewhere need something that they don’t have? Or why does your business need to do something that it’s not doing? The second thing is to solve for that need, to create the answer, what is needed to grow. And that’s kind of the creative part of it. The first part is insights and learning. The second part is creation, figuring out what’s going to solve for that need that exists in the world. The third part of it is how. Once you figure out what you need, you need to figure out how you can create something that helps a company make money and survive while also solving for consumer needs.
So that’s kind of the three parts of the equation here. And the way we do it, we think uniquely, is that we bring multiple perspectives to it. As I mentioned before, I come from the design side. Katie comes from the world of insight and information. And then we also have people on our team that come from the business side, the money side.
So, we look at our company as being this kind of creative engine and problem solver for companies like yours that has these three unique perspectives always intersecting. What’s going on in the world? What’s the insight that we tie an opportunity to? What’s the design or creative solution for it? And always, how’s it going to make money? Where’s the business justification for anything that we’re doing? Those three engines are constantly working in tandem in our business to make sure that we’re creating solutions and opportunities for companies that are relevant in the market and are always going to be supportive of business.
Terry Montesi: Great, that helps. And I’ve heard several good examples of what you do, Four Seasons, Chanel, Pfizer. I’d love for you to share a couple of examples of what that looked like and what was the solution, what was the need, et cetera.
Bart Higgins: Cool. Well, I love setting up our stories of the work that we do with this context of saying that Katie and I are in the business of disruption. We get work from people when one of two things is happening. One, they’re being disrupted. Something’s happening in the market that’s disrupting the business foundation that they built their business on and they need help figuring out what’s going on, how do we solve it? The other is to be the disruptor, to get out ahead of everybody else and do something that nobody’s ever done before to leap forward.
And a great kind of like, hey, we’ve been called because we’re being disrupted story is a hospitality company like Four Seasons. They’ll call, and they’ll say, we’ve got a problem. We’re this tried-and-true luxury hotel brand that every wealthy businessperson and family traveler is very excited to stay in and has been for many, many years, but all of a sudden, guess what, all of the younger luxury business travelers don’t think we’re cool anymore. They’re doing other things. They’re going to other smaller boutique brands. They’re getting entranced by this idea of going to places and staying with the world of Airbnb. How do we solve our problem? What do we do?
And so, Katie and I and our team, we would come in and we would first of all go study the market and that consumer and understand what is it that’s driving you towards something and away from this brand. We’d also study the brand to understand what’s going on inside of you that’s keeping you from adjusting to these needs. Then we marry that up and create a collection of what we call opportunity territories and say, wow, you’ve got an opportunity here to fulfill a need that’s not being fulfilled, which is to be hyper relevant locally. Because these younger travelers with money, they’re going to places and they want every moment of that business trip to be providing them something new and exciting to see and dive into. They want to learn about the local community from the local community.
We look at Four Seasons, they’re all the same everywhere they go. They’re the Four Seasons ivory tower. What can we do for Four Seasons to help them come up with new ideas for how they integrate local culture, local design, local storytelling into every aspect of their experience? And then we help them bring that to life by working with their designers and their teams.
Another cool story with them was the fact that a lot of business travelers are moving very quickly, and Four Seasons move pretty slow. It’s kind of an older approach. Come in, if you order room service, you’ll get it. It’ll be a luxury experience, but it’s going to take 45 minutes. Business travelers, they come in, they’ve got 15 minutes before their next meeting. So, we learned that, and we said, hey, let’s create some stuff on the menu for the modern business traveler. It’s the 15 minute menu. Anything on this menu you can get will be in your room, you can eat it in 15 minutes before you go to your next meeting, which has been another example of the kind of thing we’ll help them create. But all of that is in service of helping them capture this consumer that was drifting away from them, while also keeping their existing consumer.
Terry Montesi: Does one of you all want to tell a Pfizer story?
Bart Higgins: A quick story about Pfizer is they bought a company called Seattle Genetics that we work with a lot. Seattle Genetics came to us, they’re an oncology-based company, they’re creating breast cancer drugs. They said, science is changing and we’re not keeping up. And we know that technologies, AI, data, automation is changing the way science works. And we need to figure out what’s going on, help our scientists utilize that so it can be more competitive, and then completely redesign how our labs and our facilities work to support all of this new type of science.
So we ended up in a multi-year project with Pfizer to study scientists, to understand what the scientific process is like, what’s important, to help them find ways to insert new types of technologies that can advance the work they’re doing without disregarding them the scientists, and then created the lab of the future design for them and helped them apply that, and then have also done… have helped them master plan new campuses that support these new types of labs and workspaces.
Terry Montesi: So, you guys often talk about understanding what’s coming in the future to help brands and businesses future-proof themselves. And there’s so much happening in the world that people in the retail real estate business should be concerned about, some good, some challenging. What do you think’s the most important future influence for us in that business to understand and to adjust for or to exploit in our business?
Katie Hillier: Yeah, that’s a great opening question, Terry. And I think one of the things that all of us are probably constantly hearing about everywhere we look is the idea of AI. We recognize that AI is coming fast, the topic on everybody’s mind. What’s interesting to us is that AI and a lot of the conversations around AI are on the tech side around AI, how to integrate that from a tech perspective, how to understand it. But for us, as you can probably tell at Future Perfect, we’re really interested in how profoundly AI will be changing us as humans and reshaping the larger human experience, how we actually change as people. And we really believe that if you’re focused only on the technology side, you’re actually going to miss that big transformation of the way human beings experience and shape the world in the future, how AI actually changes us.
And actually, Bart and I always talk about this, but a big fear that we have is that everybody’s overly focused on this tech side of AI and not enough people are actually thinking about its effect on human culture and human experience and actually miss this massive transformation. And what’s interesting about this, this is super important I think because we know that people are the basis of every business that exists in the world. People are who we sell to, they’re who you’re talking to, if you own a shopping mall, that’s who you want to come into the door, and all of that is about to dramatically change. On every level, AI is going to disrupt that. And we think this change is going to be profound and rapid, really, really quick.
And so, I guess for us, when we think about this future and this age of AI, we’re really interested in this idea of like investing and understanding the future human and the needs of these future humans and those cultures will be a key differentiator for any leader when they’re thinking about where they go next. And I think something interesting to think about is like we hear a lot about this, this is something that a lot of people are talking about, but there’s a lot of data to support this idea that culture is about to shift from AI. This is actually going to change our human experience.
A lot of people right now are talking about jobs, and I think the latest stat that I read is that almost half of the US workforce is at risk of losing their job in the next decade. That’s a massive shift in how we live and where we find meaning in our lives. And you can see that when 90% of Fortune 500 companies are already using ChatGPT. 90%. You can think about our relationships and how we build relationships with each other, but you think about Gen Z, maybe some of you in the audience have kids that are in the Gen Z range. Well, one in four of young adults today believe that AI boyfriends or girlfriends could replace human relationships. And one of six that are single have already tried it. Think about how that changes who we are. It’s wild.
And it goes all the way from relationships to jobs to just how we operate in our lifestyle. I think ChatGPT is the fifth most visited website in the entire world. And that happened in only a couple years. It means that we’re integrating it in everything that we do. And our health is also a big deal. Gen Zers are using ChatGPT to help them diagnose health issues. Or we’re now walking around with these continuous glucose monitors in our arm and that business will triple in the next decade because we want to know what’s going on inside of our bodies and AI can help us do that. But that kind of understanding shifts culture, and we’re really obsessed with that shift.
Terry Montesi: So, guys, retail as a business format has been the driver of commercial exchange since the dawn of society. It’s had its ups and downs but has been consistently operating around some very basic principles. How will AI disrupt or reshape retail as a business model?
Bart Higgins: I think if you look at the stuff that Katie was just talking about and you start shifting away from AI as a technology and you shift your perspective to humans that are impacted by this technology, that’s where we’re going to start to see the fundamentals of kind of what you’d call the commercial construct of real estate and retail real estate really transform, we think, because people are going to see the world differently. They’re going to be living differently. They’re going to want different things. Retail infrastructure was based on a concept of desire. We’re going to build tools to fulfill the desires of people.
And from kind of the beginning of modern society, desire was very needs-based. I desire milk for my kids. I desire tools for my farm. The early constructs, and up until not all that long ago, the construct of retail was quite basic. People have a need. We create a resource to fulfill that need. People pay us. We make money. They get what they want. That was kind of the basic construct of retail up until, as society evolved and grew, we started to have extra time and extra money.
And at that point, we would argue that society shifted into something we call the self-growth economy. You could look at this kind of coming about post-World War II. You’ve got a lot of people, there’s extra money, there’s extra time. And people start using retail environments, not just for I need milk, but ooh, I’ve got some extra time and some money. I wouldn’t mind bettering myself a little bit. I’m driven beyond basic needs to kind of like grow in myself a little bit. I might want to learn something new. I might want to enhance my identity. This is kind of like Maslow’s hierarchy of needs. We’re moving into this world where, hey, I’ve got extra time. I’m going to spend my money and my time on bettering myself. And that’s where you see retail begin to expand into stuff that’s not just needs-based resources, but experience-based stuff.
What Katie and I see happening now, and this is why we think it’s so important to talk about retail real estate and AI, is that AI is moving us into what we think is the next giant leap forward in the construct of retail infrastructure and commercial infrastructure. We’re moving into what we’re referring to as the era of the limitless self. This is a world where human beings will be able to invest in redesigning themselves through the use of technology and data. We can actually start to re-engineer the full human experience. We will be able to improve our life, our physicality, our emotions through acquiring intelligence, perspective, goods and services that AI ultimately can provide for us.
This is like a real fundamental like, whoa, there was pre-AI and post-AI commercial construct. And we really, truly believe that this is here and it’s upon us and that businesses need to wake up, see what’s happening and start kind of investing in and preparing for and providing for this shift in how humans think. And it sounds a little crazy, I know.
Like if anybody’s ever seen like an apocalyptic movie, like Independence Day or one of those movies, like the polar ice caps are melting or aliens are invading. In every movie, there’s like a crazy scientist with long hair in the background kind of telling all the generals and the government, look out, the world’s about to end, you should really listen to me. And they never listen to him, and then the world ends. I kind of feel like that’s who Katie and I are at this point. We’re like, look out everybody, this is going to be a really big deal. We said it before when we had that kind of crazy shift in the way retail worked 15 years ago. We’ve been saying things recently about the change in commercial office. And now we’re here saying, look, AI is really fundamentally going to change the way humans engage in commerce. And it’s going to be dramatic. And it’s not going to destroy retail, but you sure as heck better get ready for it.
And you can start to see it happening already. Katie mentioned some stuff. But if you look at the way humans are already acting, AI companions are already in people’s lives changing the way relationships work. 1.2 million people interact daily with AI friends like Replica. Katie mentioned some Gen Z statistics before, but 25% of Gen Z are open to having a romantic relationship with AI. This is real. This is happening already. And it’s just going to get bigger.
You mentioned biohacking. People are already changing their physicality with technology and tools. Longevity is a $610 billion market. People are already investing in these technology and tools to enhance their physicality. You’ve got this thing called avatar culture. 45% of Gen Z millennials say that they have multiple avatar-based digital identities that are basically different versions of themselves. It’s 45% already. 30% of those people say that they feel more themselves when they’re in that avatar than they are in real life. I mean, this is pretty crazy stuff. It sounds sci-fi, but it’s all here, man. It is happening. I truly think that in a couple of years, we’re going to look back at what’s happening now and be like, oh my God, that was nothing. Look at how dramatically different our lives are.
Terry Montesi: So, Katie and Bart, what are some examples of behaviors in the future that you think will be different or ways that retail places or the retail experience will be different based on all this?
Katie Hillier: Yeah, great question, Terry. I think taking a step back in terms of human behaviors and we think about like, what does it mean to be human? This human story sort of hinges around five different abilities that really set us apart and fuel our progress in the world and the industries and markets around us. We have the ability to breathe and remarkable bodies that have evolved and optimized over time naturally. We have the ability to think, and we have abstract creative ideas and intelligence. We have the ability to act and turn those ideas into coordinated collective action. That’s something very unique to humans. We also feel. And we have emotions that give our experiences meaning. We have belonging and relationships that have shaped our culture and define us.
And every product or service out there or system monetizes one of these traits. And AI is going to rewire every single one of them. And that’s huge. And that in and of itself will shift our behavior. And yeah, let’s dig into some examples to really bring some of these to life.
Terry Montesi: Yeah, what might that look like?
Katie Hillier: Yeah, let’s talk about what that could actually look like. So I’ll start with, again, that idea of our bodies and breathing, and we’re moving from this world of one size fits all health, where you can read the back of the Tylenol package and take two and it works for everyone, to programmable biology, where we’ll be able to actually use peptides and wearables and different kinds of tech to upgrade our energy, our focus, our longevity real-time and in the moment, and our bodies actually become programmable. Well, what does this…? How does this shift our behavior when something like this happens? And what does that look like in retail? Bart, do you want to share a little bit about some examples around that?
Bart Higgins: Yeah, in this case, AI is kind of like your doctor. And this may sound sci-fi as well, but this is stuff that’s already kind of starting to exist in the world and it’s going to be existing more. But imagine a world, Terry, where you wake up in the morning, you’re brushing your teeth in the mirror. And the mirror in real time is analyzing your body. It’s looking at you. It’s taking a digital picture of you. It’s monitoring your temperature, your heart rate, and in real time, it does an oxygen scan, and it tells you, hey, based on the stuff I see in your calendar day, you’ve got a focus day coming up, you’ve got a lot of work going on. Your body is going to need X, Y, and Z to do the best it can do today. So I’m recommending right now, based on your physicality, that you do a microdose of this particular medicine. I want you to do a 16-hour amino fast. And I’m actually in real time, as your mirror, going to print out a peptide that I want you to take to prepare for your busy day today.
That’s all going to happen at home in real time. It’s programmable biology, and essentially, it’s in the moment health tweaks that are happening in all aspects of your life. And if you start to take that and think about the impact that that has on retail real estate, so right now we go way out of our way to do one size fits all health regimes like SoulCycle or we go to Juiceland to have a particular type of juice, same stuff that everybody else gets. We’re actually going to be shifting away from wanting to go take the same old, same old group health class with everyone else.
So, either brands like SoulCycle are going to go away, and you’re going to get hurt as a retailer that actually leases to them as a retail developer, or they’re going to have to adjust and start finding ways to be dialed in to every one of their customers’ in the moment daily needs. So, you’ll show up to a SoulCycle. SoulCycle will understand where you are and what your mirror has told you you need to do today and will design an in the moment class that’s specific to your need for the day.
Terry Montesi: Wow.
Bart Higgins: Crazy, right?
Terry Montesi: Yeah. So, all businesses really base their success on predicting and responding to the needs or the future needs of their customers. The products, the places, the services, they’re all designed to meet that unmet need. What are some of the needs that you see consumers expecting us all to fill in the future in retail places, retailers, etc.?
Bart Higgins: Let’s go through those five things that Katie talked about, those fundamentals that we have, the intellect, the body, etc. I think we should tell you the story of those expectations and needs through the lens of each of those, just like we did with biology. Because if you look at each of them, you start to realize how differently retail is going to have to work to attract people.
Katie Hillier: Yeah, so if we think about, so we talked about our bodies and breathing, and the other disruption is really around our ability, how we think. So, you’re moving from a world of solo decision-making where we make our decisions to AI being co-intelligent thinkers alongside us. We will have AI agents that advise us, reflect and act alongside us in real time. And we actually become the training data for our own AI agents that can act on our behalf and evolve our perspectives together over time. And that will have a huge impact on how we behave with you and brands.
Bart Higgins: So, in a world like this, you’re going to wake up and you’re going to get in your car and you’re going to get a notice from your AI which will come to you on your phone or some other device. And all you’re going to have to do to manage your day is click approve, because AI will have already done all of the logistical work for you. It will have planned your meetings. It knows that your kid is sick and needs to have a telehealth meeting with the doctor. It knows that your kid’s going to need to get picked up at school. And it’s already called school and let school know that grandma’s coming to pick up the kid. It’s organized everything. It’s shifted your meetings around.
So, we’re kind of moving into this world where all decision-making and planning is done in tandem with AI. That’s like full co-intelligence. It’s almost a world, Terry, where you will never in the future make a decision about what to wear to work alone again. You’ll look in your closet and AI will be helping you figure out which shirt to pick that day.
Terry Montesi: I don’t need any help.
Bart Higgins: You’ve only got one shirt?
Terry Montesi: No, I got that. I got that.
Bart Higgins: But then think about Zara. Like Zara is a retail tenant of yours. They’re going to start playing this game as well. Their AI agents are going to be working with your AI agents and fitting bespoke visits at Zara into your day. Retail and visits to retail places will become hyper planned and organized. It won’t be, oh, I’ve got some extra time, I’m going to drop by maybe, or I’m going to do a bunch of shopping. It’ll be, hey, we’ve scheduled this today. Zara is waiting for you. This is what time you’re coming. And people will come in to have very hyper-specific experiences at one brand. So, the idea of people milling around in retail because they came to Zara potentially could shift away to I popped into see Zara and I’m out and back on my journey. So I think you’re going to have potential footfall and dwell time challenges inside of the business. So, Katie, we just talked about co-intelligence. How do you think that this idea of identity is going to be transformed?
Katie Hillier: So going back to those traits we talked about, another one of them is our ability to act and present ourselves in the world. And this has a lot to do with our identity and how we show up. And we’re moving from a world of this singular identity where I show up as myself in a store, in a platform, to a space of multiple identities, as we talked about, where I can create multiple versions of myself depending on my interest, on my situation, what I’m doing in my life.
And people are able to express different facets of themselves via AI and have these curated avatars and proxies that represent that and that can post and act on your behalf, which completely changes the idea of the singular self to the multiple self. And what does that mean for places that are trying to engage a person? So, Bart, do you want to share an example?
Bart Higgins: Yeah. Like, in this one, Terry, you kind of imagine a world in which your golf self has a relationship with PGA as a brand. Your business self might have a relationship with Microsoft or Apple. Your sophisticated self might have a relationship with a school or a governmental organization that you have. But literally we’re moving into this world where we’ll show up on calls like this, and AI will adjust the world that we’re presenting ourselves in and the context in which we’re presenting ourselves. So it can literally have Terry in a suit one minute and in a golf shirt the next. And what we see here is that brands that exist are going to have to begin to recognize that.
Terry Montesi: I’m actually wearing a tank top right now. But AI has this shirt on.
Bart Higgins: That’s what I see. Your AI might just be playing a joke on you. I don’t know. But you’re in a tank top and a pair of sunglasses for me. But yeah, so brands like Nike are going to have these very specific relationships with just a part of a person, not the person. And that’s going to be limiting for those brands. And it’s going to be challenging because Nike wants the whole person, but the person is only going to give Nike their sports avatar to work with.
The other thing, and this is where I think we’re going to have a problem in retail real estate here, is as Nike gets better at understanding your athletic interests, it’s going to start having a secondary conversation with your sports AI outside of you physically and will start making decisions for you, and you won’t necessarily ever need to go to the store again because your AI and Nike’s AI have decided that you should see a particular pair of shoes and they’ll show up at your door. So this idea of Amazon like where it’s having a real impact on retail because I can buy things here, we’re going to end up in a world where these avatar AIs are making decisions for us and we never really need to go to this store. They’ve preempted the need. And I think this is going to be a really big challenge for retail and this is going to be one of the places where retail has to really reinvent itself to drive interest in going to a place.
Katie Hillier: Yeah… that also relates to just like our emotions and how we feel as people, and historically through all of history, we sort of manage our emotions on our own, inside of our bodies, and the environments are static around us. Maybe we choose to go to a place that makes us feel better, but it doesn’t shift. But we’re moving to this space where environments can start to see our emotions and there’s this ambient co-emotional regulation as our emotions become visible and environments can sense that.
So, AI is going to create these co-intelligent systems that are able to detect our mood from our faces, from our heart rates, from our voice and tone, and actually it would be adjusting, Terry, the lighting for you automatically right now as you want it because it senses that that’s what you would like. It’s going to shift the sound in your environment, and maybe you wouldn’t even notice it, but what it does is it calms you down a little bit more than you would normally feel. And I think what’s interesting about this, it’s not dramatic. It’s not…
Terry Montesi: It would know that I don’t like white light.
Katie Hillier: Yeah, it knows. It’s really, your AI is not working for you right now, but it would know that. And what would be interesting is you might not even notice that it’s doing that for you because the ambient aspect about this is what’s so incredible. It’s natural. It feels intuitive and an extension of you. And I don’t know, Bart, do you want to share a little bit more?
Bart Higgins: Absolutely. I think that you already kind of showed the example. But think about checking into a hotel in the future. AI knows you’re there, the hotel’s AI knows you’re there. It knows what mood you might be in. It pre-orders cocktails based on what mood you’re in. As you move through the hotel, if you don’t like white light, it’s going to be shifting the ambience of the light for you as you move through. When you get to your room, it’s already preset the temperatures. It has preset the lighting setting. Like everything in real time will be able to adjust to what AI knows you need. You don’t even have to request it anymore because AI is with you and making that program. So, we’re moving into this world of absolute adaptable environments that are going to respond in real time to people.
And this is another one where like if I was in the real estate business, I would think that there’s a real challenge here. Because I remember once we did a project for Old Navy, and it was like, hey, what’s the future of retail? And the CFO of Old Navy said to me, if you just come back and tell me to change the light bulbs, it’s going to cost me $40 million. So this is not cheap stuff that we’re going to be messing with. And I think there are going to be early adopters, and there are going to be some brands that kind of play with this. But the expectation from the consumer side is that I shouldn’t have to have an experience that isn’t right for the moment that I need it to be.
One of the things that I think is really interesting, we’ve already seen this start to show up in travel, there are certain airports that if you stand in front of a kiosk, rather than seeing like all of the different flights that are going and you have to look through and say like, oh my, where’s the flight to Denver? What time, what gate? It knows that it’s you based on your phone signal and all you see is your flight and where to go. So that’s a very simple but good example of how automated and kind of co-regulated environments are already starting to change the world of experience for people.
Katie Hillier: Yeah. And the last one here, just to like round these out, is we talked about belonging as being a core part of the human experience and the idea of being in relationship with other people and the world. And of course, through all of history, we’ve been with humans in our relationships. We’ve had relationships with humans. We’ll exclude dogs and cats for now, but in general, these are human-to-human relationships.
But we’re moving into this world with hybrid human-AI relationships. I don’t know if your listeners read the New York Times article about a woman being in a relationship with her AI boyfriend, but this is coming quick. And AI is going to basically start to just mediate and be a partner with you as you navigate your relationships, just actually start being a friend and being one of your friends, potentially even being one of your emotional companions, and your relationship with your partner could be you, your partner, and your AIs together.
And what does that mean when, all of a sudden, an individual has relationships that are AI based and physical based and everybody has representatives around them that you can’t exactly see but are influencing the individual and sharing that emotional support in different ways that they need, helping them make decisions, which is huge.
Bart Higgins: And this is a place, from an example standpoint, where brands have amazing opportunities. Because all of a sudden, they’re going to have access to this friend that you have that knows a lot about you. So, brands can become very front-footed in this scenario.
So imagine a world where you’ve got a couple, and they actually have a friend called Amari, and it’s a friend of both of theirs. Amari is an AI agent that’s helping them in real-time manage their relationship. They don’t have to go to couples therapy anymore. They have somebody that’s living with both of them in real time saying, hey, Terry, before you send that text, let’s adjust it a little bit because you guys have a lot going on, and let’s just calm it down a little bit. Or to your wife, hey, you know what, this is a great day, Terry’s had a really rough day at the office. This is a great day to remind him of what a great husband he is. And those types of things are going to start to happen.
And that Amari is going to start to have relationships with all these brands that support you as a family. And Amari is going to reach out to Good & Co, which is your favorite restaurant, and say, hey, date night’s coming up. You should reach out and invite them to come to your place for date night.
So, all of this stuff that we take time to make the decisions to do is going to start to be kind of moderated. Our friendships and our relationships are going to have moderation. So again, this is all kind of quite esoteric. But if you start to think about how transformative each of these things are to the way we live as humans, it’s kind of impossible not to see how the places that we create are going to have to adjust and change because we’re going to need them for different reasons, we’re going to use them for different reasons, and the tenants that you have within those places are going to start having very different relationships with people. I think it’s going to transformatively change the expectations that each of these people have of you and of the brands.
Terry Montesi: Well, you just teed up my next question, which is sort of two-part. So how do you see AI impacting how we need to evolve retail places and our abilities to serve our customers well and what practical things can retail real estate developers and owners be doing to make sure that we don’t get left behind?
Bart Higgins: Well, I mean, I think that’s a big one. So first of all, the weird…
Terry Montesi: You’re a big guy. You’re a big thinker, man.
Bart Higgins: Well, look, I think the caveat here, Terry, is that we are at a very nascent state of this transformation of moving into what we’re calling the limitless self. It’s almost impossible to tell you, here’s what you need to do. Because we don’t really know what’s going to happen and exactly how people are going to change. All we know is it’s coming and it’s coming really, really, really fast.
Terry Montesi: So, you’re just here to scare us.
Bart Higgins: Yeah. I’m actually glad you say that because I’ve always felt that the idea of letting people, really scaring them into realizing how important a change is, is the first task in getting them to start doing something about it. So years and years ago, we had the retail apocalypse. Remember that?
Terry Montesi: Well, we didn’t really have the retail apocalypse. We had the retail apocalypse fear and talk.
Bart Higgins: Yeah. But if you owned a C mall in Des Moines, you might have had it. That’s the point I’d make is that there were people that were aware of what was going on, and they were keeping their eye on the ball in this transformation of how humans live, and adjusted to it. Your company has done a very good job of continuing to realize that the places that we create are for people. And as long as we continue to understand people and create those places, we can get great tenants and help them have the right footfall. We’re not just there to do business with tenants and sign leases. We’re here to create places for people that are supported by retail and services, etc. And knowing those people and adjusting for them keeps you viable.
There are a lot of malls and retailers out there that didn’t do that. And during the, air quote, retail apocalypse, those people really did suffer. So, if I was going to make suggestions for the retail real estate world, I would say first things first, you have to recognize that regardless of what technology does, humans are always going to want to be around other people and have physical experiences. So none of this stuff that Katie and I talked about means places are going away. Actually, they probably will become more important.
The difference, and I’ve been saying this for a long time, is that no longer are they just going to come to you because they need to buy a loaf of bread or because they’re looking for a new shirt. They’re going to be coming to you because they might have a planned engagement with one of your tenants, or they might be looking to have a deeply, deeply personal human experience in a beautiful place. Katie sent around a really interesting article the other day from Rick Rubin, and it was about taste and the importance of taste in the AI era. Can you talk about that, Katie?
Katie Hillier: Yeah, I think when technology creates infinite amounts of information, the idea of curation and our ability to have taste and curate and have a point of view becomes the most important resource and it’s finite. And that’s what people will be looking for in this world of AI slop. And that human connection with a brand’s point of view and taste is really important.
I actually was just reading this, someone was like pontificating about this idea of like, well, what do we do? How do we get people to actually care about going to places if AI can replicate everything? And there was this idea that AI can replicate every Michelin starred dish in the world, but no one would fly across the ocean to taste it. We travel and we get out of our houses for that sacred forearm that stirred the pot, that made the sauce, the apple that was built on a- that grew on a childhood orchard, or the chef cameo that came at the table.
We care about those emotional things, even if AI can do it. And that is part of that curation of perspective, of taste, of meaning, of story, that is still super important. And it’s a human story. And I think that, in this world when we think about what matters, taste and that perspective on taste and intuition around what’s good versus everything in the world, because there will be more options than ever before, and so we really need to think about what we choose to put in front of people. And our taste is our subtraction, what we don’t show them. And that will be more and more important when we think about retail.
Bart Higgins: So, there you go, Terry, you got your big answer. The future of great retail design and development is to be taste makers.
Terry Montesi: Yeah. That’s something that I feel like we can do.
Bart Higgins: Yeah, absolutely. But you probably have to do it at a higher level than you ever have before.
Terry Montesi: Yeah, well, I feel like every year we have to do that anyway. So, this isn’t really… that’s not scary to me. So how about outside of AI? Let’s throw AI, and you’re probably going to say, well, you can’t, but outside of AI, when you think of the future of retail places and retail real estate, what are some of the things or trends you see coming our way?
Bart Higgins: Well, look, I have to say I have a fundamental challenge pontificating a world without AI having an influence on it. I truly believe that. I don’t think that five years from now we will be able to understand what life was like without AI’s influence. But I will say outside of the context of AI right now, I still think that we’re living in a world where we aren’t driven by transaction, we’re driven by personal transformation. And I think that, when I talked before about the evolution of desire and how it was like needs-based, self-growth-based, and then into limitless self, we’re at the tail end of kind of self-growth. The great motivator for leaving the house is not acquire the good. The great motivator is to transform the self, to better the human experience or the life experience that you have.
I would continue to say to everyone that’s in retail real estate or commercial office real estate or any kind of real estate, help make people’s lives better, more consequential, more meaningful, and more enjoyable. And then transactional sales will follow. If you lead with transaction, which you can do, you become the dollar store today, which is a great business model. It’s convenient, it’s low priced, it’s goods on demand very, very quick near your house. And I think there’s always going to be a place for that type of retail. But I think when it comes to the type of retail that is synonymous with the word place, we need to be always thinking about enhancing human life first and then supporting it with goods and services. That’s the supporting act in retail.
Terry Montesi: Got it. Well, again, based on what we do, the whole dollar store mindset, it’s not where Trademark is, and so very copacetic with your thoughts there. As we close out today, can you share an example of a brand or a business or a place or a couple of those doing a great job futureproofing themselves?
Bart Higgins: Yeah, that’s a really interesting question because we’re at the beginning of it, and the danger in all of this is brands over-investing in technology, saying like, oh, well, the future is AI, and I need to spend all my energy developing one for people out there in the world. And that’s going to just make it… I actually think the brands that are futureproofing themselves are working from the inside out. They’re investing in their people and how AI helps their people do better things for the world.
And I’ll give you an example. One of our clients, a big global monster, global retail company, said to us, like, hey, we have a big global creative team, and we want to make sure that as humans change, our creative team is ahead of the game and is always helping them with these transformations. What do we do? We went in and we studied how they approach creativity and we realized that, hey, in this age of AI, you can’t keep up with the changes in people if you’re not using AI as part of your creativity. This team has invested in reimagining the creative process internally and is supercharging their creative process, their ability to collaborate with each other and get inspiration from the outside world by utilizing AI. And we’d help them kind of shepherd that and showed them how to do it and even helped them build tools. And now they’re creating and innovating at the highest level that they have in the last 50 years. So that’s AI internally changing humans who are externally changing the lives of consumers. I think that’s where you are going to end up seeing people future-proof themselves.
As a nod to what do you do, what does a company like Trademark or a company like Nike or any business in the world, what do you do to rethink your approach right now, and there’re like a couple of core fundamentals that I think are really important in this, and the first is, we would recommend this for everybody listening to this, is everybody in your company needs to understand AI and be using it in real time. You need to be playing with it, experimenting it, and understanding it. Because in a couple of years, the companies that didn’t do that are going to be lost. They’re going to be gone. So, you have absolutely got to make sure that inside of your company, everybody’s studying this stuff, thinking about it, playing with it and experimenting.
Katie Hillier: It’s almost like experimentation and resilience to failing becomes a core competency in your business and that always on experience is required.
Terry Montesi: Well, my last question, is there anything you guys want to ask me?
Bart Higgins: Yeah… I’ve got a question for you. How are you, Terry, running this business that actually impacts the lives of millions of people? You literally have the ability to impact the lives of millions of people. What are you going to do after hearing us talk about how dramatically the world is going to change, to make sure that your company and the people that work there can continue to contribute to the lives of the people you support?
Terry Montesi: Well, I’m glad you threw me a softball.
Bart Higgins: You didn’t throw me any.
Terry Montesi: Yeah. Well, I’ll tell you, every week at our Monday morning huddle, we’ve added to the agenda how the presenter used AI the prior week. We haven’t- for the last year or two, I’ve been thinking, do we need to bring in an AI consultant to show us how, and what has happened organically is our people are just experimenting.
A guy showed us the other day, he was at a Woodlands project. There’s a building that has a certain type of brick and it just doesn’t work for the tenant that we’re looking to put there. It needs to be a little slicker and cleaner. And he just asked AI, he said, here’s the two tenants. We’re going to break that building into, put their sign, one on one half and one on the other, and paint that brick a light cream. Three minutes later, there it was, and it looked like you hired an architect to do it. And so, I was just thinking the other day, I had a meeting with an institutional client, and we’re looking at acquiring some land next to a project we operate. And there’s these two very simple site planning methods you could go about. You can either back the buildings up to the building, or you can put the buildings on the street with parking. And I was just thinking, all we have to do is load the site plan in and ask AI to do that. Try the buildings are 70 feet deep. We want them to be 14,000 feet each. Try one plan backing up and one plan… and we’ve have had it already.
So, I think, for us, we are not going to change our commitment to placemaking, our commitment to appealing to people’s emotions when they’re at our places, because that emotional connection, that isn’t going away, like you said. It may become more and more important because people have this, they have this virtual life, but they still, what their heart yearns for is it yearns for real emotional connection with real people.
And not to discount the possibilities of AI friends and relationships, but I think we’re not going to deviate a lick from our commitment, probably enhance our commitment to being place makers and connecting with people emotionally, but making sure that we are a leader. Because as a boutique firm that’s committed to quality, we get to decide what our priorities are. And I think as a leader in our industry, if we want to be a premium boutique company, not just a boutique company, but I think using AI and being aware of how others, how the consumer is using it and hosting them as best we can.
I’m going to amp my commitment up, amp our commitment up and continue to encourage our people to try it and report what worked and what didn’t work, and to ask their friends, how are you using it? And to report how they’re using it, not just at work, how are you using it at home? So, I think, because we have a laboratory of a couple of hundred people here at Trademark, and just getting them to report how they as consumers are using it, as people in relationships with spouses and partners are using it. So, it opened my mind.
And it’s interesting because one of my questions I was going to ask was, should we be scared? And you really are, should I be fearful of the future? And I’d say what I’ve learned is you should be scared if you don’t embrace and stay apprised with what’s going on, but you should be curious about the future. And hanging out with you the last seven or eight years has helped me just be more open-minded and curious. And knowing that I’m an old guy compared to a lot of people around here, but I don’t have to be old of mind. And I’m not planning to do that until I’m in a box.
Bart Higgins: Well, I think you’re onto it, Terry. And I think you all always have been. You’re curious as a business, you have curious team members, and you guys are out there experimenting with new ideas and new thinking all the time. And again, I think that’s the answer here, is looking ahead of it. I think if there’s one thing to truly be afraid of in the next five to ten years, it’s the economic impact of unemployment. That would be the one thing that we’re studying this constantly.
But when you look at economic forecasts in relationship to what AI is going to do to simple little jobs, you just mentioned one. Like, I can have AI repaint something for me or show me ten different plans. When AI does it, that means some young professional is not doing it. And that means that young professional is no longer working. And what we have to begin to think about is like, what happens to that person? And how does that group of people not having jobs impact these places that we’re creating?
Terry Montesi: Yeah, and the flip side is that we need to pay such attention to, and nobody has the answer, is what’s it going to do to productivity? Because productivity is really how, that’s how an economy roars, is by increasing productivity. And is there a chance that it creates just as many jobs, or these are jobs we didn’t even know they existed five years ago, or are we just going to need less workers, period? I tend to think that’s not the case, that you’re going to create, there’s going to be some destruction, but there’s going to be kind of an equal and opposite creation. And I guess maybe the hopeless optimist in me feels that way.
Katie Hillier: Yeah, a great innovation challenge to think about. Well, what are the new jobs that your places need to have? What kind of new people do you need to hire? What kind of new roles need to exist? And that’s a really exciting curiosity challenge as well, to be curious about that.
Terry Montesi: Well, I want to thank you guys, my friends, for joining today. Katie, we didn’t mention that, has joined us from Croatia and sounded great, at least on my end. And Bart, my friend, are you in New York?
Bart Higgins: I’m in upstate New York.
Terry Montesi: Upstate New York where he moved during COVID and I got to hang out with him virtually. I’m super grateful for y’all’s time, and I know my listeners will appreciate it. Wishing you all the best.
Bart Higgins: Thanks for having us, Terry.
Terry Montesi: Thank you.
Bart and Katie, thanks so much for joining me today and sharing your take on what AI means to the future of human behavior and retail. From shifting consumer behaviors to emerging expectations for products, places, and brands, you’ve given us a lot to think about and some practical ways to prepare for what’s coming. Thanks for listening today. Be sure to subscribe and follow us on LinkedIn to stay up to date on future episodes of Leaning In. Until next time, thanks for listening.