Autonomous retail is coming—and the IoT (Internet of Things) is going to impact connected retail in the future. All of this is coming from some research I saw recently that caught my eye and details how the IoT is impacting this dynamic space.
Last week, you may remember this column focused on electric vehicles and I referenced a really great report from the EIU (Economist Intelligence Unit), a global resource for economic and business research, forecasting, and analysis. Well, that “Industries in 2018” report goes far beyond transportation and also delves into industries like retail. So, I’ll start there.
The EIU presents some compelling research suggesting that while retail looks to be stable on the surface, there are some seismic shifts occurring beneath the surface.
I agree wholeheartedly with this, considering traditional brick-and-mortar retailers are facing threats from the continued rise of stores with strong Omnichannel strategies and e-commerce-driven retailers.
There is also a surge in small, craft sellers on platforms like Etsy that, when lumped together, take a chunk from some of the traditional retailers. And then, of course, there’s the IoT, which is changing the very nature of what it means to buy and sell things.
The EIU says retail volumes rose about 2.8% in 2017, and there’s a similar projected growth trajectory of 2.5% in 2018. Steady, continued growth, however, doesn’t mean that things are staying the same.
E-commerce continues to wear down certain brick-and-mortar retailers that have failed to recognize and adjust to shifts in the retail space. The EIU points out that household names like Kmart, Sears, Macy’s, and J.C. Penney all have significant closure plans in 2018.
Here’s my take: 2018 won’t bring about the end of brick-and-mortar retail, but it will certainly be kinder to those retailers that grab the bull by the horns and embrace the connected world.
How can they do this?
One, they can adopt in-store technologies that make the shopping experience better and more personalized for customers.
Two, they can adopt technologies in the warehouse and behind the scenes to keep inventory up to speed and to boost efficiency and productivity.
Three, they can leverage RFID (radio frequency identification) and other technologies throughout the supply chain to keep costs down and minimize risk to inventory.
And four, they can leverage systems across their channels to keep the shopping experience pleasant and consistent in stores and online, including mobile.
Amazon is the obvious leader and top disrupter in the retail space, so we should keep a very close eye on what it is doing.
One of the strategic moves Amazon has made recently that will play out in 2018 is the company’s acquisition of Whole Foods Market. If you have some thoughts on what this acquisition will mean for the space, please send me a tweet on Twitter and perhaps we can dive into this another time.
But what I’m most excited to address in this column is what autonomy could mean for retail. Now, normally when we talk about autonomy, we’re talking about autonomous vehicles.
But autonomous retail is on the horizon, too, if you ask me. Here’s a great example of what I’m talking about. Launching this year at CES is the poly autonomous store.
The concept is this: no lines and no checkout. That means easier, faster store trips. And, especially since it’s the holiday shopping season, I think we can all agree that easier, faster store trips with no lines is an amazing idea.
Here’s how it works. The poly platform’s camera system offers realtime data about the movement of products, giving store managers instant notifications about not only stock levels but also rich analytics.
Analytics can help store owners and managers make decisions about product placement, future sales, and marketing efforts, etc. Artificial intelligence also plays an important role here. Poly’s AI (artificial intelligence) can track items on shelves at intervals of a few milliseconds, and it can even make suggestions about ideal store layouts.
This technology can also help automate replenishment. In poly’s case, each autonomous market performs an inventory scan every 50 milliseconds. The system takes stock of what’s in the store and where everything is, and it can even estimate how long products will stay on shelves. And, if you’ve ever picked up a gallon of milk in the store and realized it’s expired, you’ll be glad to know that this will be a problem of the past when we all shop at autonomous stores.
When an item passes its expiration date, the system will know it and send an alert to the appropriate person. And then, the icing on the cake when it comes to autonomous stores is the checkout process—or lack thereof.
The autonomous store platform allows customers to pick up their desired items and then leave. They’re charged upon exiting the store. No cash, no credit cards needed. The solution requires customers to have a smartphone with the poly app downloaded.
After leaving the store, the customer receives a receipt for items purchased, and that’s it, they’re done. The app even integrates augmented reality to help customers with their in-store experience. For instance, a customer can learn more about a product on the shelf by directing her device’s camera at the item. It’s all very exciting to think about.
But even as we get all pumped up about autonomous stores, it’s worth discussing whether physical stores will need to exist at all in the future.
With services like AmazonFresh gaining ground, will there come a time when everything we buy is delivered to our doorsteps, either by humans or drones? It’s fascinating to consider what path the future will take in this industry.
Perhaps our children’s grandchildren will think it’s hilarious that we ever shopped in stores to begin with.
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