By Mike Troy and Abby Kleckler – 01/14/2020
Originally posted on Progressive Grocer
Toshiba is adding computer vision that was on display in its frictionless store and a small processor in its self-checkouts that can identify the items on the scale without a customer entering a code, helping with loss prevention.
The National Retail Federation’s (NRF) Big Show wound down on Tuesday the same way it started Sunday. Thousands of retailers jammed onto the show floor of New York’s Javits Center looking to discover a competitive advantage.
That is the promise of technology as evidenced by the type of conversations solutions providers have around the business challenges they claim to solve in new and often inventive ways.
However, after three days on the show floor and hundreds of conversations, the claims made can begin to sound familiar.
For example, there is lots of talk of disrupting, enhancing, leveraging, optimizing, harmonizing and streamlining. It seems no conversation at NRF is complete without one or more of these words being used in a sentence, and the claims are often difficult to validate.
Aside from this general observation about how solution providers convey the features and benefits of technology, parting thoughts from Day 3 of NRF include:
- The smart store: The pace of change continues to accelerate, as seen at Intel. Its partnership with Retail Business Services, the service arm of Ahold Delhaize USA, has created a store using computer vision, motion control and weight sensors for a checkout-free shopping experience. Two stores are live at businesses now, with plans for 20 more in train stations, airports and where stores don’t necessarily fit. At Toshiba, the frictionless store experience led to conversations about the different technologies that can be implemented at scale in stages with minimal disruption to the store, according to Fredrik Carlegren, executive director. “Inventory control and loss prevention are the two big things immediately,” he said, “And you don’t have to change consumer shopper behavior.” Toshiba is also adding computer vision to its self-checkouts to minimize theft.
- Long-term thinking: Sustainability and transparency are topics retailers speak of often and many of the solutions presented at NRF enable companies to achieve initiatives in both areas. “We have to make the 2020’s the decade of transparency,” said Niels Stenfeldt, CEO of Stibo Systems, a Denmark-based master data management company. “Transparency leads us to truth and allows companies to do the right thing as opposed to the least wrong thing.” The right thing often means reducing waste, a key area of emphasis at Digimarc. The company continues to find new use cases for its digital watermark technology with the latest being fresh product labels that improve product dating, waste reduction and recall execution. VP of Marketing Heidi Dethloff also described a use case that involves the sorting of plastics for more efficient recycling.
- Better, cheaper, faster, Part 3: This is a recurring theme at NRF and some variation of better, cheaper and faster underpins the value proposition of the technology solutions presented by virtually every exhibitor. Scott Block, VP of product marketing with Revel Systems, a cloud-based point of sales software provider focused on specialty grocers, notes that systems that are easier to use require less training and reduce costs for labor, management and inventory. Meanwhile, Stan Zylowski, CEO of retail execution software provider Movista, contends that retailers are retaking the store floor. Retailers are looking to standardize tasks and manage them in an automated way. “We deliver a software infrastructure that allows companies to execute, communicate and validate,” Zylowski said.
- Don’t forget humans: In the same breath of touting artificial intelligence (AI), computer vision and robotics, technology companies and retailers were emphasizing the importance of human interaction. Starbucks’ new Deep Brew AI initiative can do inventory ordering, predict staffing needs and more, but CEO Kevin Johnson said it’s all about freeing up that partner (employee) for human connection. “Eye contact and conversation are the most important,” he said, describing a direct link between human connection and frequency of customers. Erik Bergman, business development executive with IBM, emphasized their human-centric design process to solve a very specific problem for grocers. “If the problem is out of stocks, start with who are the humans involved in out of stocks and how to improve what they do,” he said.
- Data accuracy: A current, correct and complete data set is the starting point for the development of retailers’ insights-driven sales strategies. Accordingly, data harmonization and integration are challenges many a tech provider purports to solve. Pricing and promotion solutions provider Eversight’s co-founder David Moran notes that only with clean data and machine learning is it possible to quickly analyze millions of permutations that lead to optimal decision-making. “We have to understand what is meaningful to the customer and work back from there,” said Keith Knopf, president and CEO of Raley’s. “Eversight has allowed us to drive share gains through unit growth and optimize margin dollars.
- The irony of Amazon: Amazon built its business on homegrown technology, which it began selling to other companies when it launched its cloud-computing business branded as Amazon Web Services (AWS). This year AWS had a major presence at NRF, with a large exhibit in the lobby of the Javits Center and on the show floor. AWS is peddling the technology it used to disrupt virtually every retailer in the U.S. to those same retailers who if they use AWS services are supporting a high-margin business that helps subsidize the company’s retailer operations leading to further disruption of the industry. The CEO of one major technology provider likened a retailer running AWS as sleeping with the devil.
- Anti-porch piracy: The story of “my package got stolen” has become all too common, and many lockers were on display in hopes of solving that problem and more. Swyft Open Delivery API, in partnership with Intel, allows companies to send their packages to a locker in a retail space. Stephen Hoopes, VP at Swyft, who spent 10 years working at Amazon, said that retailers housing these lockers see 10 visitors per day or more in incremental foot traffic. The retailers can also keep part of the locker for itself to execute buy online and pickup in store services while leasing out the rest for package deliveries. Refrigeration, frozen and heated lockers are the next products in the pipeline. Kimberly Carroll, VP at Apex Supply Chain Technologies described the possibilities of its lockers as click and collect solutions for heated, cool or ambient food in a grocer’s prepared foods department.
- Delivered to your door: The last-mile delivery logistics question is a large one, and in many ways, it’s being solved overseas before it is here. JD.com, the massive retailer in China, started drone delivery in 2016 in areas with rough terrain and has three test centers for robot delivery on the ground. Now they’re even thinking what’s next. “How about subterranean delivery?” said Hui Cheng, head of JDX Silicon Valley Research Center for JD.com. “You’ll turn on the faucet and sometimes water will come out and sometimes it’ll be packages.” Grocery has been the slowest industry to embrace online sales, but according to IDC Retail Insights’ analytics, it’s growing the fastest with 37% revenue growth year-over-year.
All segments of retail are facing many of the same challenges from a global supply chain to sustainability and ecommerce order fulfillment to digital experiences, with thousands of technologies promising to be a “must-have” solution. Staying true to your brand vision, however, is key to sifting through the options.
“Retailers have clearer visions of what they want to do,” said Michael Jaszczyk, CEO of GK Software, “and where they want to invest.”