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The Shrinking Gap between Real-World and Digital Shopping

The Shrinking Gap between Real-World and Digital Shopping

How Technology is Reshaping the Retail Landscape

“The store of the future combines the best of online thinking into the physical world.” This was the sentiment expressed by Zivelo CEO Healey Cypher and Albert Vita, Home Depot’s director of in-store experience and visual merchandising, when they presented on the NRF 2019: Retail’s Big Show Innovation Stage in January.[1] It’s a good summation of where technology is taking retail over the next year and beyond.


Technological innovation, implementation, and challenges were among the hottest topics at this year’s annual conference held by the National Retail Federation, both as keynote subjects and when they seeped into presentations and panels nominally devoted to other themes. Some were expansions of current trends like data science; others were advances in new technologies once branded science fiction: artificial intelligence, intelligent automation, robotics, virtual reality, and more.


Below, see some of the advances in technology we will be seeing over the next year and into the 2020s.


Bridging the Virtual with Reality


As we know, retailers are continuously trying to streamline the shopping experience between online and brick-and-mortar stores, and for good reason. Consumers know that options are available to them, and they want to shop in whatever way is best for them at any given time. This might mean a woman purchasing the items on her grocery list from her phone, then going to pick them up in the store where they’re waiting, bagged and ready to go. The next day, this same woman might be perusing cold medicines at the drug store, simultaneously checking her phone to find price comparisons or coupons that can be redeemed immediately; while she’s standing there, she gets a text from the drug store with additional coupons for tissues and cough drops.


Platforms like this not only give customers the ability to shop when, where, and how they want, but also customize the experience and offer value add-ons. The key to enabling these platforms, however, is sophisticated data collection and analysis.


“Data is at the forefront of everything, and the customer is the center of everything,” Janet Sherlock, CIO of Ralph Lauren, said in a session at The Girls’ Lounge at the NRF Big Show, where the panel discussed data in the fashion industry. The examples listed above are the tip of the iceberg. Facial analysis and foot traffic-monitoring technologies can pinpoint which displays draw the most attention and allow managers to optimize store layouts so customers can find what they want more easily. A customer entering a store might find a fitting room already stocked with items he had earlier placed in an online shopping cart, since beacons and tracking tech alerted a sales associate to his location and preferences.[2] The AWM Smart Shelf utilizes facial recognition to customize displays for shoppers and provide pertinent discounts, while offering cashier-less purchasing through its frictionless app.[3]


Over at Target, three out of four digital purchases made in 2018 were fulfilled by a store, either through delivery or pickup. Meanwhile, Walmart has revamped its technology organization and is investing in the speed and ease of its grocery ordering, delivery, and pickup services, with plans to establish more than 3,000 grocery pickup sites and 1,600 delivery locations by the end of 2020. Besides customer-facing programs like these, the retailer is pursuing new technologies like blockchain, which can boost the ability to track fresh produce from a supplier to the store, ensuring greater oversight of food safety.[4]


Intelligent Automation Takes AI to the Next Level


Companies have already been investing in tools to track and analyze customer data, predict shopping behaviors, offer recommendations, and the like. Now, intelligent automation—or automation driven by AI—further utilizes these huge rich data sets to improve efficiencies and decision making at every stage of the retail process, from supply chains to customer experience.


In a joint study between IBM and RTF, unveiled at the Big Show, 40% of executives surveyed said their organizations were already using intelligent automation, and 80% expected it to be an integrated part of their businesses by 2021, helping to reduce operating costs while increasing revenue growth. These respondents see supply chain planning and in-store operations as areas where intelligent automation can have tremendous impact, since it can quickly digest data from multiple channels like materials, manufacturing, and distribution, and streamline planning processes, many of which have traditionally been done manually.[5]


Chris Wong, vice president of strategy and alliances at IBM Global Consumer Industry, believes intelligent automation will revolutionize retail, and is less about the efficiency and cost savings than the traditional 20th century concept of automation (though that still plays a part). Rather, companies will see benefits in better operational agility, more well-informed decisions, faster execution, and, perhaps most significantly, higher revenue drivers as opposed to cost savings.[6]


As with any new technology, many challenges accompany intelligent automation. In addition to building new infrastructures, companies must acquire or retrain people with the skills necessary to work in these systems, and establish a culture that encourages the adoption of these technologies. Data bias is a real issue, and organizations need to ensure the data they use is properly curated so machines can more accurately learn and execute upon it. But the excitement around intelligent automation is palpable, and retailers agree it will be key to success in the coming years.


People Still Matter


Encouragingly, amid all the talk about how machine learning is changing the landscape of retail, the human element has not been lost. Wong and the IBM report stressed that intelligent automation is not meant to replace human workers, nor are managers looking at it that way. Rather, the best, most efficient use of these new technologies will enhance human output, helping people do their jobs better and allowing employees to connect more directly with consumers, thereby improving the customer experience. Machines may take over repetitive planning and analysis tasks, freeing up workers to focus on the customer, and providing them with better tools with which to make more informed decisions and react more quickly to changing conditions.


“Every retailer needs to be maniacally focused on their customer journey,” Macy’s CEO Jeff Gennette said at the NRF Big Show,[7] and technology trends are backing that up. Data science and artificial intelligence are only getting more sophisticated, and whether it’s a behind-the-scenes automated supply chain or a client-facing Smart Shelf, the technologies that retailers are wise to invest in are those that create a seamless, personalized shopping experience for an increasingly savvy and picky customer.



[1] “Building the store of the future takes more than cool tech,” National Retail Federation

[2] Frank, Karlie, “3 ways data leads the way for retail disruption,” National Retail Federation

[3] Fernandez, Henry, “Retail technology: Facial recognition when grocery shopping,” Yahoo Finance

[4] Redman, Russell, and Browne, Michael, “NRF: Big Show: Retailers embark on transformation,” Supermarket News

[5] “The coming AI revolution in retail and consumer products,” IBM

[6] Overstreet, Jennifer, “The very near future of AI and automation in retail,” National Retail Federation

[7] Bandaranayake, Nadee, “Lessons learned at NRF 2019: Retail’s Big Show,” National Retail Federation

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