WHY IT MATTERS: Digital Transformation

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 ;-)

This is simply brilliant as it forces you to make moral decisions and then reports back on your biases based on your answers. Some of the choices are questionable (how will a self driving car determine if someone is homeless or a criminal) but overall the process is very useful when considering the decisions we will soon let machines make.

Perfect Sunday morning reading which is guaranteed to make you reflect and ponder for the next weeks. The article is a typical New Yorker one, very well researched and written. So captivating that it got me to start reading the book which appears to be as captivating and surprisingly easy to read and understand. I love those finds and have the feeling this book will be the best complement to "Singularity is Near" and "On Intelligence" that I wrote about in the past.

- book "singularity is near": http://fmcs.digital/blog/singularity-is-near-an-essential-read-to-understand-why-technology-evolves-so-fast/ 

- book "on intelligence": http://fmcs.digital/blog/on-intelligence-mustread-to-understand-frontal-cortex-architecture-what-makes-us-intelligent/ 

- article "Why the future does not need us": http://fmcs.digital/blog/why-the-future-doesnt-need-us-a-reminder-that-ai-may-have-a-bad-side-via-wired/ 

- related posts: http://www.scoop.it/t/digital-transformation-of-businesses/?tag=Singularity+is+Near 

The best of the Verge, very interesting papers on digital topics including machine learning, ecommerce, social media, self-driving cars, batteries, and many more.

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.

WHY THIS IS IMPORTANT

Daily activities leave digital traces that can be leveraged to improve processes and deliver value in organizations. We often overlook this data in organizations but we should realize that companies such as Facebook, Google, Apple and others have invested huge amounts of efforts to dig into the data exhaust of our digital and physical world activities in order to extract, infer, predict our tastes and behaviour. If it works for them, it should work for us as well, no?

AI and Big Data are being applied to identity verification by a startup that has received 25M in funding and is poaching employees from Google.

WHY THIS IS IMPORTANT

AI and other techniques will provide enhance capabilities to deter theft and privacy violations. They will become essential tools in digital transformation of businesses. For example, UBER is using Onfido to verify that people are who they claim they are, thus making their service better able to curb credit card theft, and protect drivers by ensuring their passengers can be tracked is they behave inappropriately. 

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

If you have kids, have them read this.

One important stat from The Future of Jobs report is that the top trend that will drive change in work is new technology and innovation.

WHY THIS IS IMPORTANT

All jobs will be affected by technology and thus every good digital transformation should include the human disruption and its impact on current and future employees. Too often, we implement digital change and fail to consider people impact.

Look at UBER taxis: their model is to plow ahead and disrupt the market but they have failed to accompany the taxi drivers that are impacted. Because of it they are facing huge head winds from governments and established corporations.

On the other hand, Teo Taxi (Montreal-based) has recognized the people impact and embraced human transformation of the cab drivers which results in much better relationships and less confrontation. Same technology, same process, different human approach.

WHY THIS IS IMPORTANT

Amazing short 12min video because of the level of understanding that the President of the USA has of the threats that come from AI and other digital means. He has been briefed of course but his discourse and examples shows that these are very important topics on top of mind for him and his administration. Moreover, it raises some concerns on our ability to fight against those threats and the impact they can have on countries and businesses alike. Must listen video IMHO.

Very technical series of articles on deep learning coding techniques. Useful to read even if you have only limited DL coding experience because it pulls the covers from over a very new way of coding - especially for old nerds like me!

part 1: http://online.cambridgecoding.com/notebooks/cca_admin/deep-learning-for-complete-beginners-recognising-handwritten-digits 

part 2: http://online.cambridgecoding.com/notebooks/cca_admin/convolutional-neural-networks-with-keras 

part 3: http://online.cambridgecoding.com/notebooks/cca_admin/neural-networks-tuning-techniques 

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. 

A 3 part post that explains what CNNs are. It explains their architecture, and provides plenty of examples and diagrams to help even non technical readers understand the concepts.

WHY THIS IS IMPORTANT

CNNs are essential technologies behind the current boom in artificial intelligence and deep learning that has led us to have very good speech recognition in Google Android phones, amazing image recognition, self driving cars, etc. etc. They are essential components of any digital transformation strategy.

1- First, look at the video at the end of the article.

2- Then, read the article to understand what Tesla is doing

3- Then, listen to this other video to understand that self-driving will be part of every new Tesla vehicle but will operate in "shadow mode".

https://www.wired.com/video/2016/10/nasa-s-pumpkin-carving-contest/ 

New Teslas will be self-driving and comparing their driving to what the human drivers did (and presumably learning from them). They will collect huge amounts of data, which will demonstrate that self-driving is safer than human driving.

4- Then, dive into this more complete description of the technology. 

https://www.wired.com/2016/10/teslas-self-driving-car-plan-seems-insane-just-might-work/ 

5- Then, look into this video of a self-driving delivery 18-wheeler that drove 200 miles without human intervention.

https://www.wired.com/2016/10/ubers-self-driving-truck-makes-first-delivery-50000-beers/

6- Realize this is not fiction but 2016 reality.

WHY THIS IS IMPORTANT

Self driving must find its way into every major corporation strategic plan. It will impact how retailers receive their products from factories and distribution centers. It will make eCommerce easier with lower cost delivery (which still accounts for 15 to 25% of the online total) and will enable same-day delivery. It will transform travel between large cities, and school bus for our kids. It will change the way ships carry their loads.

Self-driving will create a shockwave in human resources department and unions, which will fear the replacement of human drivers by machines. It will require appropriate communication, retraining, and investments to ensure a smooth transition into the new reality.

Don't worry this will not affect your 2017 bottom line. It won't even affect 2020's bottom line. So if you manage with a short term vision, life is good, stay the course, and forget everything I just said.

Others, call me!

Article describes how a 3D printing company uses AI to look at the 3D print and adjust it throughout. What is most impressive is the video of the creation of a very large 3D structure that is happening over many days.

WHY THIS IS IMPORTANT

We have been used to see 3D printers as desktop devices. With this we now see that robots equipped with 3D printing heads can now become production machines able to spit out  - almost literally - very large structures. This has an impact on any manufacturing company as they look into the digitization fo their manufacturing plant.

A short run down on personal technologies coming our way soon.

WHY THISI S IMPORTANT

I've been speaking about the impact of digital technologies to transformation our personal lives and the opportunities this brings to business for a while in my "me.com" and "we.com" conferences (http://fmcs.digital/conferences). Looks like there is even more to it than originally I anticipated with the convergence of InternetOfThings, AI, BigData, and wearables. Your employees in the future will be even more connected and digital and companies should take notice and leverage it to 1) improve productivity 2) support work-life-wellness balance 3) tap the social networks to their benefits (ie. social recruiting).

With the introduction of robots, the fear is that humans will loose their jobs. In the short term at least, it may only transform work.

WHY THIS IS IMPORTANT

Any strategic plan should include a chapter on robotics and the replacement of human labour with robots (and possible AI as well). The article shed some insights on historical perspective - farmers have not disappeared with introduction of mechanical devices but they have become much more productive - as well as raises some interesting ideas about our cohabitation with robots in the near future.

From healthcare to security, AI will invade our lives. Get ready.