The race is on to create ever more advanced and convenient technology in an effort to transform the retail sector and future-proof the industry for the next 100 years. Headlines are made on a daily basis detailing how a previously unknown startup has created the “next big thing” (which mostly turns out to be a fad). In today’s article, we’ll attempt to separate out the serious contenders with those simply trying to make some quick money by boosting their valuation. Given the large assortment of choices a retailer can make regarding which technologies to implement, it is important to know which ones provide the most value to themselves and their customers.
1: Facial Recognition
As cool as it may sound, we do not believe facial recognition represents a major or long lasting trend in retail. As the use of facial recognition technology has gradually increased in recent years, (to prevent shoplifting), so have issues associated with false positives and incorrect identifications. This seems to have been the case in a South Island supermarket, where a customer was incorrectly identified by the system as a known shoplifter, and endured the understandably humiliating experience of being pulled aside. The accuracy of such systems simply isn’t at a level that would make it a reliable option for theft prevention, and as such we do not believe the benefits associated with facial recognition are worth the risk to customer trust and brand loyalty. The intention behind facial recognition as a means of theft prevention is legitimate, but the use of such technology can be off-putting to customers who feel their privacy may be compromised.
2: Cashier-less shopping solutions:
The rise of cashier-less shopping solutions has been rapid, but not necessarily in the places you might expect. Traditionally such bleeding edge technology would have become widespread in the United States prior to being adopted in emerging markets. However, with major technological advancements, China seems to be taking a leading position when it comes to the implementation of cashier-less shopping. Major Chinese retailers like Alibaba, JD, and Bingobox have all opened cashier-less convenience stores, through the use of an array of different technology ranging from simple RFID tags, through to advanced artificial intelligence and computer vision solutions. Chinese companies are not alone however, with Amazon announcing yesterday the expansion of their Amazon Go concept through to larger format stores, which hadn’t previously been viable given the limitations of the technology. Once Amazon’s technology matures, it will undoubtedly become the future of retail, but for everyone else, there are two major problems; The cost of building Amazon Go stores is prohibitively high, and Amazon would never licence its technology to a competitor.
In recognition of these two issues, IMAGR has created a solution which is widely available, and can be offered at a competitive price, reducing the upfront financial investment. Our SMARTCART comprises hardware that can be retrofitted onto an existing shopping cart or trolley, and doesn’t require the extensive array of complicated sensors that are needed with Amazon Go. These efficiencies allow us to deliver SMARTCART at only a fraction of what it costs to construct an Amazon Go store, meaning the SMARTCART solution is accessible to ALL retailers. Taking an infrastructure light approach makes it possible for retailers to easily integrate our technology into their existing systems, thus significantly reducing the level of disruption as the technology is rolled out. Because the technology can be retrofitted, there isn’t the need to construct new stores, or to close an existing store while SMARTCART is introduced.
3: Artificial Intelligence
We believe AI technology also has major potential in the retail industry going forward. There are various different applications for the technology, but when it comes to retail, the two biggest uses are computer vision and data analysis. Let’s start off with computer vision and explore how this facet of AI can be used to transform retail. We’ve all heard about the Amazon Go concept store in Seattle, but how does it work? Well, Amazon uses a vast array of sensors and scales on its shelves to detect each item as it is lifted and their algorithm automatically correlates this with the person picking up each item. In order to achieve the “cashier-less” aspect, customers simply scan in (with their cell phone), each time they enter the store, and the technology takes care of the rest.
With our SMARTCART, similar principles apply- customers simply scan in when they visit the store, and instead of using sensors on the shelves, SMARTCART’s cameras are located right on the basket itself. This means customers simply dump all their items into the basket or trolley, and just like Amazon Go, the technology takes care of the rest, and no manual scanning is required.
Whether it is Amazon Go or SMARTCART, the aim is to eliminate as much friction as possible. Customers (expect) a friction-less shopping experience, and one of the major barriers preventing this from happening are the frustrations caused by an antiquated checkout. Vendors who are able to offer a seamless experience will develop a major advantage over their rivals when it comes to customer satisfaction and therefore customer retention. Due to the disparity in resources and focus among companies, we will continue to see a widening gap between early adopters and legacy operators, putting the latter at an extreme strategic disadvantage.
The other major aspect in which AI can offer massive advantages would be data analysis. Because products like SMARTCART generate data each time a customer uses it, this data can be harnessed in very powerful ways. In terms of the customer, SMARTCART’s data is used to make personalized product suggestions based on each customer’s personal preferences. This means we are able to offer “recommended recipes” that are different for each and every customer! By harnessing the data, SMARTCART gains an accurate understanding of what each customer wants, and all product recommendations will be served with this understanding.
For retailers, the benefits of knowing exactly what each of your customers wants is invaluable. Think about it- when you run an ad, you’re really not targeting it at anybody in particular, which means most people who end up seeing that ad probably won’t even be interested in the product. What if we could offer a solution that takes the guessing out of advertising? What if SMARTCART knows exactly what each customer wants? As you can imagine, it becomes a lot easier to sell products!
Finally, we have RFID technology. This isn’t new by any means- the tech has been around for a number of years. We do not believe however, that the future of retail technology lays with RFID. The way RFID works is through the use of small tags which are placed on each item. This concept is great in principle, but can be quite cost inefficient when implemented on a large scale. The need for individual tags on each item is especially problematic for smaller items, when the total selling price is extremely low to begin with. While each tag might only cost a few cents, this would prove nonviable for items that only retail for less than a dollar. For these reasons, technologies like computer vision can achieve similar results for only a fraction of what RFID costs.
Is there a technology which we haven’t covered? Let us know in the comment box below as we’d love to hear your thoughts! Do you think SMARTCARTS are the future, or will Jeff Bezos wipe everyone out with his shear financial power?