The Future of Retail Begins and Ends With Technology
In the midst of recent announcements, what caught my eye was the opening of Amazon.com's first Fresh grocery store in Los Angeles.
Retail is undergoing a massive upheaval, and I think it will come out the other side offering a significantly better customer experience. What do I think people are looking for?
- Availability of what they want
- Reassurance of the quality of what they're purchasing
- Getting in and getting out with minimal time and stress
- And given the COVID situation, a desire to avoid waiting near people (e.g., checkout lines)
From a technology perspective, I think of these situations as icebergs. There's the technology that people can see (in this case, the availability of Alexa-powered information points and autopayment facilities), and then there's the technology that really cannot be seen. I thought I would break it down using three of the most overused (often incorrectly) industry terms to see how they will be deployed in the store of the future:
- Artificial Intelligence (AI): This will be the key ingredient to more informed decisions that make stores operate effectively. It will ensure store shelves are always stocked with inventory, which means accurate readings of existing inventory and predictive ordering to avoid out-of-stock situations. Maybe more radically, I expect to see systems adjust pricing more dynamically
- Blockchain: It's more formally in these circles referred to as distributed ledgers, and there are techy differences that aren't worthy of diving into here. We will see this technology deployed to help customers know that they are indeed selecting authentic organic goods and providing significantly more information about the goods they're purchasing than the simple label they see today
- Internet of Things (IoT): For me, the milestone of a technology truly establishing itself is that we no longer mention the buzzword. We simply note that these connected systems are markedly better than prior generations. While robots have come a long way, stacking shelves remains a challenging task. Therefore, again, I expect them to be assisting in the back room. The accuracy of humans checking inventory remains remarkably poor. Walmart is experimenting with autonomous floor cleaners, and it wouldn’t be inconceivable to add cameras to these platforms and enable them to identify out-of-stock items. That said, I personally think that robots (or indeed drones) will really only be usable at times when there's no one present in the store. For slower-moving inventory, a drone flying around the store or a robot “walking” the aisles might be a feasible use case. In higher turn stores, I think the quality of cameras are reaching the point where those mounted on walls and ceilings is the way to go.
How far is this from being a reality? Much of this has been explored individually. My excitement about the Amazon announcement was to read about the joining up of a series of technologies to improve the customer experience. Given it's Amazon, you can imagine some pretty sophisticated behind-the-scenes efforts, including deliveries, optimized logistics in centralized warehouses, and strong usage of cloud computing. And yes, within a short time frame, we will be enjoying deliveries by drones to our homes. This integrated story is the definition of digital transformation. While story lines like several driving vehicles are sexy and capture the imagination, this industry is undergoing immense change. That is something we will all benefit from.
Ian Ferguson is vice president of marketing and strategic alliance at Lynx Software Technologies.
Related story: 2020 Retail Technology Report
Ian Ferguson is VP of Marketing and Strategic Alliance at Lynx Software Technologies.
Ian Ferguson joined Lynx Software Technologies as Vice President Marketing and Strategic Alliances in December 2019. Previously, Ferguson spent over ten years at Arm, where his positions included VP, Ecosystem Development, IoT Services Group; VP of Worldwide Marketing and Strategic Alliances and VP of Segment Marketing. After Arm, Ferguson spent time consulting for companies focused on Machine Learning for Speech Recognition, Retail/warehouse logistics using robots and drones and IIoT software for smart cities.