WHY IT MATTERS: Digital Transformation

WHY IT MATTERS: this videos shows the inside of the new Ocado warehouse in UK. This warehouse is making its way top Canada, with Sobeys opening one soon: http://fmcs.digital/blog/u-k-s-ocado-taps-into-canadas-online-grocery-market-with-sobeys-tie-up-is-canada-mature-enough-to-have-automated-grocery-fulfillment-centers-ecommerce-robots/ 

WHY IT MATTERS: the article presents possible use cases for AI in grocery Big Data analysis. 

WHY IT MATTERS: this is the annual presentation to level-set everyone on the Internet, mobile, ecommerce, cybersecurity, epayment, personalization, etc. She covers everything and shows that digital transformation is in full swing. Just WOW. Again.

WHY IT MATTERS: if you are a retailer Amazon is your competitor. How are you going to compete with it if all you do is have a mediocre website, little social media presence, after-thought eCommerce? Well today you have to include AI in the mix because otherwise all your other efforts will be useless.

WHY IT MATTERS: good to read for those that have missed the NRF this year.

WHY IT MATTERS: this startup is developing an AI system to replace checkout registers and enable any store to become like an Amazon GO, the concept store from Amazon showcased in December 2016. Retails stores will transform in the near future with technologies such as this one but also others such as location beacons, new floor plans, etc. More on Amazon GO:

why GO concept works: http://sco.lt/8RIFSD
what we know: http://sco.lt/8G4pZB

WHY IT MATTERS

Learn from the best online retailers on the best ways to personalize your website and ecommerce.

WHY THIS IS IMPORTANT

This is an annual bag of goodies.

Highlight #1: retail stores are closing at record pace while Amazon opens stores. This is such a huge trend because it transforms stores from a mini-warehouse into something else: a destination for experience, service, and training. Think Apple store with the highest sales per square foot, genius bar, classes and a showroom. Amazon has pushed its Amazon GO, no lines, no registers concept and it is rolling it out slowly. This is just the beginning...

Very proud to share an article I recently co-authored on CloudRaker blog with Simon Hudson. It sheds lights into the potential impacts that AI will have on retail stores.

A must read ;-)

Amazing insights into the mobile industry state and trends.

WHY THIS IS IMPORTANT

Andreessen Horowitz, and Benedict Evans in particular, have been known to spot trends long before everyone else. Here again, it appears they are making predictions about retailing - following in the steps of the print industry when Internet came along. Not certain I agree about the parallel but I agree that mobile and AI and other technologies will impact and transform the retail world in the near future. However, as opposed to the print media, retailers often sell physical goods that cannot, for now, be 3D printed at home. So either you pick them up in the store or get it delivered by FedEx or a drone. 

That being said, retail stores are bound to transform in showrooms and service centers as I wrote about in the past. And this is a major shift that many will fail to take.

Simple and efficient, I wonder why this concept has not caught on with grocery as my tastes and what I buy is often way more predictable than clothing or other items.

Take a minute to watch the video. This is the future of retailing.

WHY THIS IS IMPORTANT

Amazon has disrupted many industries with its online business. Recently, as other digital leaders have done, Amazon is trying to bring digital revolution in the world to blend our physical and digital experiences - think Google self driving cars, Starbuck mobile phone payment and geofencing app, Apple stores that are more showrooms and help centres than stores because eCommerce is there to fulfill orders to your door, etc.

Amazon has been focussed on grocery for the past 10 years to use this weekly recurring, low cost, high volume shopping trip to the supermarket as its pathway to bring digital into the real world and blend it with online e-commerce.

With Amazon Fresh for examples they have been busy putting trucks on the road to deliver groceries to your door overnight with minimal costs. Why grocery? Because its high volume guarantees that trucks will be on the road everyday in all areas. And once trucks are running around carrying groceries they can also bring other items - books, TVs, etc. - at little or no cost, effectively making FedEx irrelevant or at least giving Amazon huge negotiation power.

I wrote about this in many blog posts, just see here: http://www.scoop.it/t/digital-transformation-of-businesses?q=amazon 

Here with Amazon GO, it addresses some of the major pain points of customers in grocery stores: waiting in line at the cash register. As they've done online, Amazon focusses on its customer issues to smash them or make them so irrelevant that they are not issues anymore. See "amazon secret sauce" for insights on this: http://sco.lt/979c4P

Take Amazon Prime for example. It addresses the delivery fee issue: we do not want to have to pay for delivery. So they make it a non issue, providing 2-day delivery for free for an annual fee. Side effect: if you've paid for prime, then you spend up to 5x more at Amazon (300$ annually for average client, 1500$ for prime member), basically becoming a loyal shopper. Wow.

Back to Amazon GO and why it is important. The grocery industry has not seen a major disruption since Costco started top sell grocery in bulk format years ago - grocers ost 10% market share with that new player in the field. But today, grocery stores are the same, the layout is the same, the process is the same than it was 50 years ago. There has been little or no innovation in stores recently (last one may be the barcode in 1970s) but GO shows that there may be a perfect storm of technologies that combine to make physical stores transformation a reality:

1- mobile phones are on every customer back pocket;

2- electronic payment is everywhere, making cash almost irrelevant;

3- loyalty programs and big data allows retailers unprecedented customer knowledge and forecasting trends;

4- artificial intelligence enables real-time image analysis, feature detection, and robotic improvements.

From the concept store video and the Amazon description, all that GO is doing is applying these new technologies on a new problem set: adding and removing items to shopping basket and speeding the checkout process.

Of course, at the end of the day, the winner will not be the grocer with the best technology. It will be the one with the lowest prices and the best selection (best marketing and customer service won't hurt either). On those fronts (price & selection) Amazon GO faces huge headwinds from established grocers that have long standing relationships with suppliers and way more volume than Amazon. But it does not mean Amazon cannot provide customers with a more enjoyable, easy, fast experience - especially to millennials - which may give GO 5% or 10% of the market (the "good" 5% by the way, those that spend more and spend on higher margin items) from established retailers. And this will hurt established grocers like hell.

Also see the analysis from business insider here: http://www.businessinsider.com/amazon-go-grocery-store-future-photos-video-2016-12/ 

and the plans for Amazon to open up to 2000 store in the future if GO concept works: http://www.businessinsider.com/amazon-2000-grocery-stores-10-years-2016-10

An inventory of technologies that can be deployed in retail stores.

WHY THIS IS IMPORTANT

Retail stores are being transformed by digital technology. Apple stores have shown that retail space today is more than a warehouse where customers fulfill orders. Today's store must also demonstrate products, educate customers and provide customer service. Store must also fulfill orders, although that should preferably be done online. In that context, stores leverage technologies to communicate with their customers, inform them, as well as provide an omni-channel experience.

Choosing the right technology to deploy is a challenge, but my experience has shown that the overall retail store business model must be reviewed to ensure the right content, support and service is made available.