One thing you'll never hear me say: "I can't believe I missed that enterprise event." NRF's Big (Retail) Show is an exception.
Prior to the pandemic, I would happily sludge through bitter Manhattan streets, knowing what I'd get in return - some of the most interesting retail stories I could possibly find.
This year, I missed NRF enough that I actually recorded a video review of underrated (and overrated) retail tech with Tecsys' Guy Courtin, who was indeed on-the-ground this year.
To be clear, I don't question my decision - the 2022 show was not the Big Show of old. As Courtin explained, the Omicron surge resulted in an under-attended event, with many attendees and exhibitors pulling out last minute. NRF, alas, wasn't prepared to put on a genuinely hybrid event. That meant some of the best event content wasn't even recorded, and won't see the light of day, nor is there any way for diginomica to cover it.
Frictionless shopping experiences? A good sparring topic
We'll have to get our retail insights - and retail tech preview - another way. To that end, I picked out the best NRF show pitch from the purgatory of my PR inbox. The clear winner? Qualcomm - which is knee-deep in an IoT-for-retail play. Why Qualcomm? Because their list of next-gen retail tech was confident, without the usual PR hyperbole:
- Frictionless shopping experiences with seamless checkout and point of sale solutions.
- Future of payment with biometric payment solutions.
- Streamlined asset tracking and logistics solutions to support back end of stores and supply chains.
- Service and cleaning robots and much more!
Immediately prior to the show, I hopped on a video call with Art Miller, Global Head of Retail IoT, Qualcomm Technologies, Inc. So, Mr. Miller, how does Qualcomm factor into the future of retail? As Miller told me:
One of the things that's important for Qualcomm to expand beyond mobile. IoT is going to be a huge part of that diversification story, specifically, retail IoT. We've grown a pretty good business before we started talking about it.
When you can cite Walmart as a retail partner, along with 13,000 IoT customers, you're definitely on the map. For Qualcomm, it's about providing the infrastructure to support IoT-enabled retail. That allows me to focus on two retail topics I come back to frequently: the future of the consumer experience, and, perhaps more controversially, the retail employee experience. Qualcomm adds a third retail focus: operational efficiency. It's a reminder that "experiences" without the underlying focus on automation and cost control, will prove prohibitively expensive.
Can next-gen tech make the shopping experience (significantly) better?
So far, I'd say the jury is still out. In my video with Courtin, I talked about retail dystopias, heading into big box stores with no helpful employee in sight, and a TSA-style self-checkout, full of anti-shoplifting surveillance cams. Or, at the grocery store, we have buggy self-checkout, which confuses my empty grocery bag with unpaid items. There there is the hapless "Marty the Robot," who was supposed to make store associates' lives easier, but instead wanders aimlessly around, supposedly looking for spills.
However, we should look around a few tech corners. I think of Amazon's "Go" type convenience stores, where you don't have to checkout at all. Via Art Miller, Qualcomm shared their vision of the future shopping experience:
Miller explained the shopping benefits:
There's this whole thing of tying online to offline. It can be as simple as making sure your online pricing matches your offline pricing, or your in-store pricing, with electronic shelf labels. When you start digitizing the edge, you know how people are behaving in the store. You know what's in their basket, you know what they're shopping for. Now, you can start to make real-time, relevant recommendations in-store.
I've scorched personalization in the past, but I agree with Miller: relevant personalization stands a much better chance than spammy, pseudo-personalized spray-and-pray offers. As Miller puts it:
People don't mind getting recommendations, if they're relevant; if it's meaningful; if it helps their journey, but: they don't like being bombarded with things that don't make sense to them.
Miller believes the online personalization experience is doable in the store:
Once you digitize things in physical retail, you can create this physical online experience, where you could start to have that same experience in physical space.
Miller sees new ways of handling the inevitable/unwanted "out of stock" issue:
In the past, you just walk out of the store, go somewhere else, maybe buy it online on your phone. Now there's an opportunity for retailers, with something as simple as electronic shelf labels. When something's out of stock, you switch to a mode that allows someone to complete a transaction at the shelf edge: 'Oh, hey, we don't have it here. But we have it in another store; we have it in the warehouse; click this QR code; make it part of your basket - it will deliver it to your home.' So it's allowing retailers to maintain sales they potentially would have lost, or potentially even increase the basket size.
Waste reduction is another potential benefit: if you have a shipment of avocados coming in, you could automatically put the existing (perishable) inventory on sale. Or provide freshness alerts to shoppers, with the requisite discounts applied.
The future of the store associate - from exploited to... empowered?
I believe store associates are getting a raw deal by big box retailers. Associates face the constant risk of automation; they are provided with inferior tech and data compared to the informed shoppers they serve, and they are often underpaid. Miller says that there must be a balance between efficiency and experience:
If you have great operations, but your employees don't like it, and you have constant turnover, your customers don't come in... So we look at this as experiential plus efficiency.
Sounds like Qualcomm's views aren't too far from my own:
We've always said the intent is not to replace the associate. The intent is to free them up to sell, serve, and potentially even become specialized. Maybe there's a wine expert in the store now, instead of the person who only replaced price tags.
Miller shared Qualcomm's "associate experience" graphic:
Some of this tech is here now:
Industrial handhelds are the heart of the associate today; we're in there. When you look at Zebra or Honeywell, those are some of our biggest customers in IoT. These are mobile chips. Obviously, they're a heavy part of retail. You see them every day, when you're getting packages delivered to your door.
But, as Miller says, the tech use cases will expand:
They have a handheld, but they're still stocking and picking. So the simple thing I mentioned about Marty before: why isn't Marty bringing stuff from the back room, instead of the associate going back and forth? If he's doing that, now the associate is more efficient - but they're still holding something in their hands. So then maybe we go to augmented reality glasses. When they look down at a product, they're holding in their hand, ready to stock, and they turn toward the shelf, and maybe that electronic shelf label starts to flash.
Now you're talking about augmented reality, interacting with the shelf edge to make the associate more effective at stocking and picking.
Curbside ups the ante further: associates get face time with customers, picking and delivering curbside orders.
Even single-digit percentages massively changes the ROI on that. We've seen simply flashing a little light, while picking or stocking, can make someone up to 30% more efficient... It goes back to the point you raised: it frees them up to sell and serve, versus just do mundane tasks all day.
My take - on privacy, retail dsytopias, and the potential of converging tech
We didn't have time for a full discussion of the privacy implications of these futures. However, I'm of the belief that (most) consumers will choose convenience over privacy with brands they trust. Advanced tech like facial recognition certainly raises those privacy stakes. Martin raised the possibility that keeping some of that data "on the edge," versus in the cloud, could help contain the privacy downsides. That's a topic worthy of full examination.
Overall, I thought Qualcomm did a solid job of countering my retail dystopia and tech critiques - by presenting a fuller view of how this tech could mature, and perhaps truly deliver better experiences. Granted, some of this tech isn't there yet, but it's not really science fiction either. If you look at the graphics again, you'll see the real gains are from the convergence of various tech, from 5G to electronic shelf-labeling. So I think we can consider these futures without getting too dreamy.
I do believe, however, that the big box retailers must resolve their automation obsession and figure out how to raise up their store employees to better careers, and better standards of living. Specialty retailers are much further along this path. If that's not resolved, then our experiences of this technology will continue to be highly impersonal, with improved technology in the hands of employees who don't want to be there, and don't want to see us. Qualcomm has some good answers on how to avoid this - let's see. (I got into this retail dystopia versus retail tech optimism issue during my video with Courtin - I'll embed a view of that discussion below).
Miller acknowledges the supply chain struggles that have made retailers' lives difficult. But he also believes the pandemic economy has pushed us towards adopting forward-thinking tech, in order to better handle these "supply chain headwinds":
The interesting thing is the pandemic has accelerated a lot of these technology discussions... I was surprised to find out: most retailers don't really know where their stuff is. But now it's become more critical than ever, now that they're picking on shelves and filling online orders, that they really know where inventory is.
Add in rising retail wages, safety restrictions, and the increased cost of goods. The result is a huge tech motivator:
Retailers are starting to say, 'Hey, I need technology.' This whole ROI calculation of things that may not have made sense before - it starts to make sense when you think of some of these headwinds.
That would be silver lining indeed. Hopefully, Qualcomm's vision of a much more satisfying experience is on the way. That's far better than flagging an associate to fix the automation that's supposed to be helping.