It is always difficult crystal ball gazing when viewing future technology for the retail industry. This is because retailers – although always wishing to be at the forefront – are wary of the investment and payback. Looking at the pace at which technology is advancing, this investment approach needs to change. We’re expecting to see some exciting changes this next year, although it may take 18 months before it’s noticeable in the physical stores.
It’s worth noting though that data and analytics is the continuing technology need for retailers, more as a hygiene factor than a trend. The key to success will be how data is used to influence immediate purchasing or enhance an experience. Data analytics can be applied at all stages of retail: determining which are the popular products by predicting trends, optimising prices to gain the edge and demand forecasting for those products. It can also determine which customers are likely to be interested and can then target them for that current situation and what to offer next. This must be the greatest area of focus in 2017 to leverage the rich customer data that is available. It’s no longer acceptable to simply talk about it and do little or nothing.
In-store retail theatre will be at the forefront of customer experiences. Adoption of visual technologies from the extreme use of augmented reality devices, to the simple Google Cardboard, will allow consumers to experience virtual reality at an affordable price. This lends itself well to large investments such as vacations and major home projects; I’ll be surprised if the travel and DIY sector miss these opportunities. The recent success of Pokémon Go has demonstrated that it’s feasible to blur the boundaries of physical and digital and we should expect to see this in destination locations and where customers are more likely to invest heavily. Other unusual technologies that could drive some excitement in selected retail or shopping malls are the “clean-tech” innovation of the kind recently demonstrated at ‘Tech Expo Future of Retail.’ Pavegen has created a unique flooring technology that generates electricity from the kinetic energy of customer’s footsteps. This is not one of those musical magic floors, but does add an edge of excitement to walking across a shopping centre floor.
The challenge of gaining accurate visibility of in-store inventory is not impossible but will need retailers to rely less on the heavy back-end legacy systems and more on using RFID enabled solutions. As this cost has reduced and many retailers are already leveraging the capability, it will allow ease of replenishment, access to correct inventory and the offer to the consumer of touch, pay and go without the need of a typical retail solution. Technologies like Detego are already available, as are new start-ups with technology security tags that release on the tap of a phone.
But it’s the Internet of Things (IOT) that will have the greatest influence on retailers. The recent introduction into our homes of Amazon’s Echo hardware (“Alexa”) – a voice activated command device from Amazon.com with functions including question answering, playing music and controlling smart devices – allows the technology to serve us. Now that Google has entered the home automation race, we can be sure that the two platforms will compete. Early indicators are that Google’s new artificial intelligence software, known as Google Assistant, is smarter than Alexa. Not only does the Google Assistant make it easier for you to issue commands by voice, it also boasts the capability of being able to understand and follow up on complicated commands. Retailers can align more closely to Google and it’s only a matter of time before the customer will be able to demand “find me the cheapest x” and the device will select the best offer from multiple retailers.
We can also expect to see greater use of messaging, linked scanning of daily products for ordering and adding to the shopping list, as well as the growth of subscription and automated replenishment fulfilment. In addition, the growth of wearables and how they influence our lifestyle will see opportunities for retailers. Consumers are now using these technologies and retailers need to leverage data and capabilities to enhance the offerings.
It was as early as 2009 that Kiva robots were noticed operating in warehouses, having been purchased by Amazon. These robots are partly behind the success of the massive distribution warehouses that they operate efficiently. There is a growing adoption of robotics in the warehouse automation market, meeting the goods to person automation through the form of shuttle systems that offer high levels of performance and flexibility. These new robots called Autonomous Mobile Robotics (AMR) are emerging from highly complex solution providers, Knapp and Swisslog and many start-ups and are being recognised for their efficiency and productivity gains they offer in the small multi pick environments. With the current pressure on minimum wage and the lack of warehousing space reported in the last two years it makes sense to consider this as a technology that retailers will need to invest in.
Ocado investing heavily in logistics automation and the use of more than a thousand robots that move around the warehouse receiving instructions and data ten times a second surely proves that this technology is not to be overlooked.
Social media integration across all channels will be an opportunity missed if marketing and data teams cannot utilise the richness of the relationships with their consumers. At the recent Tech Expo, we saw a unique profiling tool – TopicDNA – that can help retail brands with profiling their social audience to a much deeper level than any current analytics tool and assist them with a low cost for targeting existing but also new potential customers. These are the types of tools that retailers need to adopt quickly to gain a deeper understanding of their customers.
Increasing the immersive experience is the shoppable video, WireWax, which has seen a great take up this year with the likes of Ted Baker using them in their campaigns online and in-store. As the capabilities increase internally within retailers, we expect to see more of this rolled out in stores through interactive digital signage.
Surely now is the time for retailers to take stock of costs, re-align budgets and invest in some very savvy technology which will both appeal to their customers and operate smartly behind the scenes.
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