Technology to the rescue for embattled retailers
There were record breaking attendances again this year at Retail’s Big Show, organised by the NRF in New York City, as retailers increasingly recognise the absolute necessity to turn to technology in order to future-proof their businesses in these times of great change.
As many as 37,000 visitors attended NRF over its three days this year, which included 16,000 retailers representing 3,500 retail companies who made the journey from 99 different countries. They came to see the 792 exhibitors covering 265,000 sq ft of floor space and to listen to the over 500 speakers.
How the mighty are tackling digital transformation
Heading up the speaker roster was Jeremy King, CTO of Walmart, who gave some powerful insights into how the mighty US-based retailer is undergoing its digital transformation that involved it spending $11.7 billion on technology in 2018 alone. To put this in context – only two companies spent more than this and they are arguably pure technology firms – Amazon and Google parent company Alphabet.
This money is being spread around a wide variety of technology areas including robotics, machine learning, virtual reality, artificial intelligence, and blockchain. This highlights just how broad are the skill sets and disciplines now needed to successfully run a retail business today.
To some extent Walmart has bought in expertise in these areas by spending heavily on a variety of acquisitions – most notably Jet whose founder Marc Lore now heads up Walmart’s online operations.
Finding the right tech partner is crucial
Most retailers do not have the luxury of making such purchases, which makes it all the more important that they partner with the right technology providers – both in terms of their IT capabilities and the perspective of cultural fit.
This year certainly involved plenty of robotics and automation – but we have moved on from the days of Pepper the robot operating as in-store assistants. Instead we have seen more ROI-driven examples such as the roll-out to Giant food stores of a robot whose initial function is to monitor the floor for spillages. The idea is to then gradually add extra functionality. Such strategies reflect the move towards implementing technology on the basis of quick wins and cast-iron use cases.
The driver of these sorts of solutions is the advance of artificial intelligence (AI). The technology was again all over many of the solutions at NRF this year but there was a move away from overtly highlighting AI to it almost being an expected behind-the-scenes aspect of many solutions.
AI is also very much behind the capabilities of visual computing. The use of cameras was a standout feature this year. On the Intel booth for instance an array of applications were highlighted and every one of them was based around cameras and AI.
Giving computers the sense of sight
Alec Gefrides, general manager for transactional business at Intel, put it succinctly with his suggestion that we are now giving computers sight. We’ve been equipping them with voice through the likes of Alexa and now through the widespread deployment of cameras we are giving them another sense.
However, the use of voice seemed to be rather thin on the ground. There is no doubt that it is an evolving interface that is replacing text as a way to communicate with technology but it was surprising not to find it playing a bigger role among the solutions at NRF this year.
In contrast, what was again apparent this year was the ongoing renaissance of the store. Walmart’s King highlighted this situation with his comment that they had gone from viewing physical estate as a hindrance when compared to the light infrastructure of Amazon but that this has suddenly changed and now retailers are viewing their stores as the key differentiator to Amazon and other pure-play competitors.
But what is needed is an overhaul of stores. This is in terms of their operational aspects, whereby retailers are now looking at introducing robots to check in-store inventory, using electronic shelf edge labels to dynamically change prices more efficiently, and deploying mobile devices for in-store employees to deliver a more personalised experience to customers.
The changing role of stores
Also there is the functionality of stores – whereby they are not just about selling more stuff. The changing face of stores is leading to the evolving nature of metrics. It is no longer a case of rigidly basing success on sales per square foot but instead adopting more holistic type measurements. This was certainly a point of discussion at NRF this year and it will no doubt continue to be a feature in the future.
This year’s event certainly gave plenty of pointers as to the way retail will likely evolve in the future but there is no escaping the fact that retailers must very much continue to focus on their digital transformations and not be sidelined by more exciting technology developments. The plumbing still needs to be put in place.