Innovation in Retail

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Introduction

The growing e-commerce industry is posing a huge challenge to retailers as an increasing number of customers are drifting towards online shopping. Continuing decline in physical store revenues pose big challenges for brick-and-mortar retailers. As a result, many retailers have been struggling with payment of rent, the rising minimum wages, business rates and other overheads. The amount of retail space closing is increasing every year across the globe. As of August 2018, the U.S. had hit a 10-year high in retail space closed down—even higher than during the peak of recession. A few examples of retail stores that were shut down in the last two years are J.C. Penney, Macy’s, Toys “R” Us, Mattress Firm, Bon-Ton, Abercrombie & Fitch and more. According to PwC, 2,700 retail shops were shut down across the UK in the first half of 2018 alone. Another big challenge for retailers is the supply chain and the customers’ demand for transparency around pricing.

There’s an optimism though. Technology continues to shape both online and in-store shopping. We are currently witnessing a retail renaissance that is gaining momentum through the smart blending of brick-and-mortar establishments with technologies such as IoT, artificial intelligence, data analysis, and robotics. Some of the recent innovative technologies that have been adopted by retailers are given below:

Innovative Technologies In Retail

Cashier-Less And Unmanned Technology

Cashier-less technology is one of the latest trends in the retail industry. Retailers are using various technologies to support cashier-less and human-free retail, including machine vision, RFID tags, QR codes, bar codes, facial recognition, and shelf sensors. Dozens of companies are working on this cashier-less technology. The common goal of all these companies is to make in-store shopping attractive and bring the consumers back to the store.

Amazon recently launched ‘Amazon Go’, its automated cashier-less convenience store that leverages technologies like machine vision, AI, RFID, IoT, and more to allow customers to shop without checking out at a register. Shoppers scan their Amazon Go app to enter the store, and get charged automatically as they pick up items and exit. Amazon tracks consumers and the products they interact with, through shelf sensors and cameras. Today, Amazon operates three Amazon Go stores in Seattle and one in Chicago.

Photo credit: Jason Del Rey / Recode

In China, e-commerce giants JD.Com and Alibaba also made an entry into unmanned retail stores. JD.Com (JingDong) has launched a grocery store concept called 7FRESH where shoppers can scan a barcode to see detailed product information on a screen above the produce section. The stores use shelf sensors, cameras and facial recognition tools, and RFID tags to track people and products. Similarly, Alibaba has launched a digital grocery store concept called Hema where shoppers can scan any product in the store to see its origins, order food at the in-store restaurant and receive personalized product and recipe suggestions. Alibaba also debuted a cashier-free cafe called Tao Cafe in Hangzhou in July 2017. Shoppers can scan their phones to enter the café, pay through the app or by scanning their face. Shelf sensors and AI-powered cameras track shoppers and products continuously.

Chinese start-up BingoBox is another chain of unmanned retail stores which operates over 300 automated convenience stores in 30 cities throughout China. Shoppers can scan the QR code generated by BingoBox’s mobile app to enter the store, pay, and exit. Customers can scan the QR codes of products and complete the payment online before leaving the store.

Photo from Bingobox.com

7-Eleven, a South Korean retailer in collaboration with Lotte has launched its first smart convenience store equipped with a HandPay system which BioPay is a payment method wherein consumers can carry out transactions using a part of their body, linked to a preassigned credit card, for identification.

7-Eleven Signature store

Smart Carts

IMAGR has developed SMARTCART, a leading retail technology system. This fill-and-go shopping solution is a revolution in retail shopping. SMARTCART adds and removes items to and from a customer’s real-time receipt using artificial intelligence and computer vision. The customer’s card is then automatically charged at the exit point.

IMAGR SMARTCART

7Fresh’s autonomous shopping carts follow customers around the store instead of having to be pushed, freeing up hands to focus on children or other personal tasks. These carts can collect valuable consumer data as they track shoppers through the entirety of their in-store journey.

THE PUBLIX QUICK CART is another revolutionary shopping cart that will change the shopping experience. The Quick Cart allows the shoppers to skip the checkout line and pay right at the cart.

QUICK CART

Smart Shelves

Smart Shelves automate the tracking of items to ensure that they are not out-of-stock and are not misplaced on various shelves. They can also detect potential threat. The AWM SMART SHELF® combines ruggedized shelf-edge displays with high definition optical sensors to translate to automated intelligence in on-the-shelf inventory levels and planogram compliance, and playing optimal videos, sensing shopper distance, including product pricing and information.

AWM Smart Shelf

Robotics

Retail robots are making a significant contribution in revolutionizing the retail system. By using robotics and the data they gather, retailers are aiming at improving the efficiency of their inventory and fulfillment systems to satisfy the needs of their omnichannel customers. Bossa Nova, the leading provider of real-time, on-shelf product data for the global retail industry, is changing the retail ecosystem. Their robots deliver unparalleled real-time product data to the retailers through fully autonomous service robots.

Bossa Nova Robot

In 2016, Lowe’s introduced LoweBot, an autonomous retail service robot designed by Fellow, which helps customers navigate effectively in the store and also find products in multiple aisles.

LoweBot

Alibaba’s Hema (‘Hippo Fresh’) stores showcase how technology can transform retail through its New Retail strategy that has taken the online shopping experience to bricks-and-mortar stores. Recently, Alibaba opened up a highly automated restaurant, Robot.He located in its Hema Supermarket that uses a series of apps, QR codes, and robots to provide a futuristic dining experience. These robots are guided by a software system that uses customer-submitted QR codes to figure out seating, ordering, and payment, via the Hema app.

Robot.He

Augmented Reality (AR)

Augmented Reality (AR) is becoming more of a reality and mainstay piece of technology for retailers. Today, many forward-looking retailers across many industries such as fashion, furniture, footwear, cosmetics, etc. are incorporating AR technology to create a more interactive in-store shopping experience. Lacoste, for example, created the LCST Lacoste AR mobile app that enables the customers to virtually try on shoes. Cosmetics brand Charlotte Tilbury partnered with augmented retail solutions and software provider Holition, to install AR-enabled “magic mirrors” in their store.

AR enabled magic mirror

Lowe’s created an augmented reality based app called Lowe’s Vision: In-Store Navigation that makes the in-store shopping experience easier and faster. The app provides turn-by-turn digital directions to guide customers to the product they need by the most efficient route. The app uses a combination of visual mapping, depth perception, and area learning to provide a simplified and more enjoyable retail experience.

Lowe’s Vision Navigation

Lemon & Orange created a virtual fitting room for Timberland using Kinetic Technology where people could try out clothes from the newest collection without actually wearing them. When a person gets close to it, the app scans the person’s face, takes a picture and looks for a good fit. On an 80-inch screen, using their gestures, persons could freely change their outfits- jackets, jumpers, trousers and shoes.

Timberland Augmented Reality

Blockchain

Conscientious customers today are looking for transparency in business supply chains and are very particular about the origin of their products. Blockchain technology can be used to increase transparency in supply chains and help track the provenance, material and components specifications of goods. Wal-Mart, for example, in collaboration with IBM and Tsinghua University, is using blockchain to improve the way food is tracked, transported and sold to its Chinese consumers. Blockchain also enables frictionless payment and mobile services that could enrich a customer’s in-store purchasing experience. Blockchain payments streamline Person to Merchants transactions, enhancing trusted relationships between customers and retailers.

Wal-Mart Store in China

Data Science

Consumer data plays a vital role in building the future of retail industry. Big data analytics are helping retailers customize their operations to increase customer satisfaction, reduce costs and generate more profits. Retailers are analyzing data captured from all the transactions, e-mails, and search inquiries, previous purchases, etc. to optimize the marketing moves and merchandising processes. Real-time data will potentially lead to major efficiencies in materials, manufacturing, delivery, and workforce

Interesting Patents

A few recent patent publications have been presented below:

WO2018112021A1 from Wal-Mart Stores discloses a hands-free scanning system that comprises an application stored at and executed by a personal mobile computing device. The application is configured to perform a commercial function related to a purchase at a retail store by electronically pairing with a retail store mobile computing device which uses its peripheral devices such as a barcode scanner, camera, and so on for collecting data. The retail store mobile computing device is coupled to or integrated with a shopping cart or basket. The system further comprises at least one sensor that detects when store items are placed in the shopping cart or basket, and the shopping application tracks via the electronic pairing the presence of the items in the shopping cart or basket for automatically performing a point of sale operation.

US20190005570A1 from MARS Advertising. d/b/a The Mars Agency Group deals with a voice interface shopping system that can assist customers in making purchasing decisions in a retail environment. The system prompts the customer by asking simple questions and the customer provides answers specifying, for example, a characteristic of what they are looking for. The shopping system then answers the customer by providing output indicating which product/s fit those criteria, or asks additional questions.

US20190026676A1 from Genesys Telecommunications Laboratories discloses a system and method for providing dynamic recommendations based on interactions in retail stores. An end-user device operable in a retail store records a voice conversation held in the retail store. The recording is transmitted to a server for comparing it to recordings of other conversations from other retail stores. The server makes a recommendation based on the comparing. The system performs real-time analytics of the collected metrics data for identifying a product or service. The processor pushes the modified service or product for display on the end-user device use in the particular retail store.

US20170293991A1 from Wal-Mart Stores describes a drone system for transporting items. The system involves a group of drones in communication with a server, and a shopping cart with a detachable basket that includes a label providing identifying data for the basket. Using the identifying data, the basket is associated with a user profile corresponding to a client device. Information identifying a vehicle may be determined from a previously stored user profile. Once a checkout message is received by the server, the server transmits instructions to a selected drone to find and carry the basket associated with the user profile to the vehicle, also determined from the user profile. In this way, the system provides a mechanism for a customer to request their shopping basket to be delivered to their car after they have checked out of a retail store. The shopping cart having a detachable basket that the drone can attach to is released once it reaches the customer’s vehicle.

Start-Ups In Retail Innovation

Here are a few start-ups that have been working on technologies for the retail sector during the recent times.

AiFi – A computer vision startup that provides cashier-free retail software. AiFi claims that its A.I., sensor, and camera network-based system can scale from a small mom-and-pop all the way up to a big retailer housed in tens of thousands of square feet and a hundred thousand products.
Planckly –Planckly is an innovation launched by Techwisely. It works in a way not too different from Amazon Go, with consumers scanning items on their mobile, paying for those items through a dedicated app and leaving the store with their products.
MobyMart – Created jointly by Wheelys, Hefei University of Technology and tech firm Himalafy, MobyMart is the world’s first store with all retail-technology built into it – payment systems, the inventory and security. Designed to monitor its inventory in real-time, the automated store doesn’t just drive to locations where an item might be in high demand, but is fitted with drones to deliver larger items to nearby customers.
Sensei – Sensei is an AI-powered video recognition solution that allows retailers to accurately monitor their in-store traffic flow, sales performance and product recognition.
Outernets – Bringing together the personalized, interactive experiences of online shopping with the physical world. It turns windows into interactive displays that can be altered using facial tracking, gesture recognition and mobile integration.
Wiseshelf – Wiseshelf redefines the physical retail experience and brings real-time insight to standard retail shelves within a traditional brick-and-mortar setting. Its technology helps to collect actionable data through the smart shelves installed in the store, reduce out-of-stocks and avoid bad positioning.
SwiftGo – SwiftGo is a mobile app platform that allows brick-and-mortar retail stores to provide its customers with a swift and personalized in-store shopping experience, while learning more about their customer’s individual shopping habits.

Conclusion

Although brick-and-mortar retailers are facing a big threat today from e-commerce industry studies suggest that brick-and-mortar retail is not actually on a downward trend, but rather it is growing, just more slowly than online retail. Digital transformation could unlock unprecedented opportunities for the retail industry over the next decade. With the growth of the internet of things, retail renaissance is gaining momentum through smart blending of brick-and-mortar expertise with technologies. New and disruptive technologies will continue to impact the end-to-end industry value chain, benefitting both the industry and consumers. Retailers need to acquire all the necessary capabilities in order to enjoy their success in this new world of brick-and-mortar retail.

References

The 2018 Retail Apocalypse, in 6 Charts and a Map
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Retailers shut 2,700 shops in first half of the year
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Beyond Amazon Go: The Technologies And Players Shaping Cashier-Less Retail
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7-Eleven launches smart convenience store with Lotte
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7 Ways IoT Is Changing Retail in 2022
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Smart Cart
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IMAGR | SMARTCART
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Bossa Nova Acquires AI Company, HawXeye
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A mobile collection of cameras and sensors that capture and process data about the store.
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Robots are replacing waiters and delivering fresh seafood right to people’s tables at Alibaba’s high-tech restaurant in Shanghai
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Alibaba Opens Robot Restaurant as Automation Expands Around the Globe
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Alibaba’s Hema stores changing the supermarket experience
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Lowe’s Vision Navigation
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Explore a range of perspectives from Capgemini experts on key topics for business, technology and society
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RETAIL
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Wal-Mart Tackles Food Safety with Trial of Blockchain
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Top 10 Data Science Use Cases in Retail
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UNITY ACCELERATE SOLUTIONS
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Augmented Reality in Retail: How Retailers are Using AR for Better Shopping Experiences
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Disclaimer:

This document has been created for educational and instructional purposes only
Copyrighted materials used have been specifically acknowledged
We claim the right of fair use as ascertained by the author

Authors

John Kathi

Dr. John Kathi holds a Ph.D. degree in Polymer Science & Technology, with 23 research papers published in peer-reviewed journals. He has extensive experience in research, including post-doctoral research fellowships at Kyung-Hee University, South Korea and Indian Institute of Chemical Technology, India, in the field of polymers and materials science. His research expertise includes carbon nanotube-based polymer nanocomposites, fiber-reinforced polymer composites, and drug delivery systems. Currently, he works for SciTech Patent Art as an Assistant Manager-Client Relations, leading the Polymers & Materials Science team, handling various clients in the area of polymers, materials, nanotechnology, chemistry, biomedical engineering, biotechnology, and electronics.

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Samba Sivudu

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Venu Gopal

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