Insight: themes and trends from NRF 2019
Robotics and artificial intelligence (AI) were among the many interesting technologies on display at Retail’s Big Show, organised by the NRF, in New York City recently but there was also recognition from retailers that they first need to put in place a digital-forward infrastructure.
This was very much the message delivered in a keynote from Jeremy King, CTO of Walmart, who highlighted how the company had originally been re-platforming its e-commerce business and then extended this out to a digital transformation of the whole business.
Undertaking digital transformation
“We’ve done it across all the business and it has dramatically changed the way the company works. Success is when you deliver for customers. When a person returns an item into the store that was bought online then this would have previously had to go back to the online business but now that it’s all integrated it’s so much simpler,” he says.
This integrated infrastructure has enabled a big $11.7 billion investment in the likes of robots for checking inventory in-store, AI, virtual reality and machine learning. Walmart is also investing in click & collect lockers for both its US stores and Asda outlets in the UK.
Indrek Oolup, co-founder of Cleveron, says the company is rolling out its click & collect locker towers - the 401 and 402 models - that utilise cameras and sensors to maximise the number of parcels that can be held in the five metre high units. There was certainly no escaping cameras and visual computing at NRF this year. This was apparent on the Intel booth where it was showcasing its Open Retail Initiative that connects a number of Internet of Things (IoT) solutions that were all using camera technology.
Ubiquity of visual computing
Alec Gefrides, general manager for transactional business at Intel, suggests that computers now have sight and that this input is enabling a wide variety of opportunities. These included an AI camera-based vending machine that JD.com has rolled out in China and incorporates cameras to detect when goods have been removed and these are then charged to a customer’s account via WeChat.
Whole Foods is using a solution from Mood Media that identifies the reactions of customers when viewing food items on the shelf and uses this to determine the visuals that are then displayed on digital screens built into the shelving unit. Cameras were also utilised within a solution from CloudPick that has been developed for use in convenience stores to determine what products have been picked up from the shelves and placed in the customer’s shopping basket.
Cameras and drones came together within the solution from Pensa, which is being tested by brewer AB InBev in the IGA Extra Beck store in Montreal. It enables video to be taken of the store’s shelves by a drone to check on inventory and to build planograms. The autonomously controlled drones work to plans of the store.
Managing inventory is crucial
There is no doubt that such inventory management was a prevalent theme this year. Greg Schumacher, VP of AI and computer vision at AWM Smart Shelf - whose customers include Walmart, have implemented its electronic shelf edge labels to enable the swift changing of prices. There is also the capability to link to cameras that detect people’s proximity to the shelf, which can then lead to the promotion of products on digital displays to attract their attention.
Managing inventory through being able to easily change prices is also fundamental to the solution from DisplayData. Paul Milner, marketing director of DisplayData, says Home Depot has just rolled out the company’s electronic shelf edge labels to 1,000 outlets as it recognises the need to “digitise the store” and benefit from better control over pricing and the protection of margin. Another driver of such implementations is the growing issue of labour shortages. To remove the labour-intensive task of manually changing prices on labels certainly helps alleviate this growing problem.
This digitising of the store and the better control it gives over inventory is fundamental to the RFID solution of SML. Dean Frew, CTO of SML Group, admits that RFID is nothing new but the increasing desire to better manage stock across channels is driving retailers to implementing RFID that can dramatically improve visibility of goods in-store.
He says retailers typically have an accuracy level of between 65-75% whereas with RFID this can be boosted to 98%. The SML solution is cloud-based - using Microsoft’s Azure product - that provides the scaleability to process significant amounts of data.
Ongoing rise of the cloud
“We use Azure for everything. The cloud talks to thousands of handheld scanners and some retailers do stock checks on 500 stores at a time. You need the scalability to cope with this large processing. Over a three-hour period on Mondays is peak activity and this then goes down to zero on Tuesday. We’ve built our application to support this,” he explains.
Greg Jones, director of industry solutions for retail and consumer goods at Microsoft, recognises the challenge of scaling within retailers’ businesses and how the cloud is playing a major role. He cites US supermarket chain Kroger as now implementing an increasingly broad array of technologies in-store that require incredible processing power and the ability to much more easily link data sets together.
“Kroger has its shelf edge labels, its ad platform, a camera network, and scan-and-go in its stores that are all hosted in the cloud. It makes it easier to join this all together and to integrate it across the whole business. Sensors and cameras are now used all around and the expectation from retailers and customers is to have faster access to data. It’s about empowering employees [with this data] and possibly also using robots to help with stock-outs in-store,” he suggests.
Robots and the ROI question
Robots are very much in focus at supermarket chain Giant Food Stores that is in the midst of the largest deployment of customer-facing robots. Nick Bertram, president of Giant, says the initial focus for ‘Marty’ the robot is to ensure the safety of the stores - by scanning the outlets for spillages on the floor.
“You have to be strategic with the ROI. Some practical things will get initial payback before we move onto other elements. We can gradually build modules on top of this. The costs go down as the adoption [of applications] increases,” he says, adding that the use of robots will also help counter labour shortages.
However, there is some wariness about going too far down the route of removing the personal connection in-store. Brian Cornell, CEO of Target, says: “We’ve realised that our number one business weapon is the stores and we know that consumers want to shop in great stores. We’re doing some artificial intelligence and virtual reality experimentation but there is still no substitute for the human connection.”
He acknowledges that technology is an area that retailers must continue to invest in - and constantly disrupt their businesses by doing so - but that this is only one aspect of retail and that all elements must be taken into consideration. The future requires good old stores and people aligned with digital capabilities.
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