Technology trends in retail
With nowadays speed of evolution, it’s important that a CIO understands how to focus his investments to deliver more value to the business and make progress in its digital strategy.
It is indisputable that CIOs nowadays have huge challenges ahead of them; not only must they carry out projects that add value to both consumers and stakeholders, but also find digital ecosystems that favor persistence of the business in the long run.
Moreover, this last challenge is not easy whatsoever, as, according to Gartner (2017 CIO Agenda: A Retail Perspective), less than 2% of digital efforts are returning clear results nowadays.
In this situation, the question a CIO usually asks himself is: what should I do to prepare my company for the digital future?
Decision making method
On the basis of Gartner’s last report on technologies associated to the Consumer Goods sector (Hype Cycle for Consumer Goods, 2017), we identify 29 technologies with a medium or high impact in the medium term in the CPG/XCPG sector.
Only a few companies have enough human and material resources to cover the whole spectrum, so we should establish a clear prioritizing method.
From our point of view, the methodology should adapt to the idiosyncrasy of every company, but should revolve around these basic ideas:
– Evaluating the digital status of the company and compare it to its main competitors, using them as a benchmark, on an annual basis.
– Establishing projects that increase in difficulty with time, so the previous project gradually gets implemented in the company.
– Focus the investments on projects that help execute operations
– Accelerating projects that allow the company to develop ambitious initiatives based on data in the future, such as advanced analytics projects.
– Prioritize projects that improve the consistency, for example, making sure that prices, promotions and offers are consistent in every system for different points of sales.
Which technology to prioritize?
Every company has different levels of maturity and different needs, so there is no secret formula for a CIO to choose a concrete technology for his company.
However, it is definitely a good idea to analyze the sector’s trends as a whole. Gartner suggests prioritizing basing ourselves on the maturity curve of every technology in the current market and the potential impact it could have in the business in a short or medium term.
On that basis, we should identify a group of technologies which the CIO should focus on. We’ll talk about the most relevant ones down below:
Artificial Intelligence (from now on, AI) keeps growing and so does our interest on it. Despite this, Gartner stated in 2017 that only 8% of the CPG/XCPG companies have AI projects implemented. However, it is true that 59% of the companies are currently analyzing how to implement competitive strategies around AI.
Taking into account the broadness of the AI concept, many companies are choosing to adopt a pragmatic approach, implementing what is known as a “narrow AI”. This means projects based on machine-learning solutions, but very focused on achieving measurable objectives for very specific tasks.
If the CIO doesn’t have any experience with AI, it is advisable to follow this approach and evaluating a few cases where AI has a direct and measurable impact and develop pilot projects. When performing these projects, the CIO will see the maturity level of the company with data, and will be able to measure the return he can obtain with this type of technology on the short run.
In VINCLE we have chosen to integrate in our AI platform a functionality of Virtual Intelligence Assistants, which offer recommendations and help to users using as a data source algorithms and both external and internal data (our Virtual Sales Assistant helps the sales person suggest the products with a higher purchasing propensity in that moment)
Thanks to the evolution of deep learning algorithms and computing capacity, these group of technologies has also evolved a lot during the last five years. According to a study carried out by O’Really (The New Artificial Intelligence Market) on the AI market, image recognition is one of the areas where more companies are deciding to invest on in United States.
These technologies are being applied to image tagging, user verification based on facial features or license plate’s identification, among others.
In VINCLE, we decided to opt for this technology in 2016, integrating the technology of one of the market leaders (Planorama) in our Retail Execution solution. Our goal is that our clients’ sales force automation tool reduces the time they spend auditing the shelves, and that they get to easily obtain reliable data, including information from their competitors.
Mature companies are applying concrete cases of AI to create new categories of apps (Virtual Customer Assistants or VCAs, for example) or to improve existing apps (CRMs or ERPs). This is why, in the following years, most of the apps will incorporate AI at some level.
Other categories of this type of technologies are intelligent assistants (like Google Now, Cortana or Siri) or chatbots. These last ones are evolving at a surprising speed, so many companies are starting to define interesting strategies around them, using them as a first contact with the client in some cases.
For this reason, in our Product Roadmap we find the development of a chatbot, which allows the B2B client (e.g. a restaurant or pharmacy manager) make an order through messaging apps such as Telegram. However, the big challenge in this case is not technological, but logistic, because the logistical aspects are crucial in this type of business initiatives.
It’s no secret that the business model of many companies is changing towards a model that focuses mainly on data, especially these last 10 years. His evolution is quite normal, as properly using the huge amount of generated data that corporate information systems provide us, can give us a competitive advantage.
Thanks to the correct implementation of this type of strategies, some companies are learning how a consumer interacts with their product or how recommendations coming from AI systems affect their decision making process. Our approach has been using advanced analytics to implement Retail Activity Optimization (RAO) functionalities in our solutions.
We call RAO the set of activities that, through advanced data analysis models, allow us to optimize the activity of the managers in the point of sales. The objective is giving them more time to execute the visits and reducing the time they spend with tasks with no added value, so they can focus on tasks that really increase sales.
Nowadays, technology is not restricted to software. Intelligent objects (commonly associated to Internet of Things or IoT), imply the existence of physical objects that interact in an intelligent way with the user, learning about him with every interaction and helping him to ease tasks thanks to this.
Some examples in this category are autonomous vehicles, robots or drones. In the retail world there are many initiatives being carried out nowadays; Walmart, for example, has robots controlling their shelves to immediately tell the responsible person in case they find a problem.
Conversational platforms will have a great impact on how us humans interact with the digital world. In the future, systems will use questions from users in a natural language and will translate it into actions on the same systems. The term “conversational” implies that an interface must be able to use the natural language of a human being.
These technologies will evolve to use as inputs to enter the conversation system things such as images, flavors, scents or physical interactions.
Even if our personal experience can reflect that the maturity level of these technologies is still too low (for example, my experience interacting with Siri tells me that there’s still a lot to work on so she can become my virtual assistant), Gartner states that in 2019, 20% of our interactions with our smartphone devices will be through these systems, increasing to 85% in 2024.
In Vincle we know well the challenges of these technologies, as in 2015 we implemented our first ordering system based on voice commands. In that moment results were not good enough, so we decided to restart the project once the technology was mature enough. Nowadays, this project is in our short term development Roadmap.
While conversational platforms are changing the way people interact with the digital world, augmented reality (AR), virtual reality (VR) and mixed reality (MR) are changing the way people perceives the digital world.
VR and AR are different but related technologies. VR is an environment generated with technology that makes the user think he’s immersed in it. The surroundings are seen by the user through devices like virtual reality glasses. AR allows tangible physical elements are combined with virtual ones, creating an augmented reality in real time. It uses devices like smartphones in order to do this. MR includes the physical world too (sounds or physical contact as well).
Investments in these technologies increase day by day. Some reports show an increase of a 58% in 2017 compared to 2016 in the retail sector in Europe. Because of this, in Vincle we decided to introduce AR in our Retail Execution module. One of the greatest opportunities that this technology brings to retail execution is the possibility of defining and simulating local promotions, with the improvement in communication with the stakeholders this implies as a main advantage.
This technology, closely related to the evolution of cryptocurrency, is becoming very popular. Along with the concept of distributed ledger technologies, block chain is a group of technologies (P2P, cryptography, etc.) that, combined, make it possible that computers and other devices can manage the information sharing a decentralized, synchronized register instead of using the traditional data bases.
Block chain is gaining so much attention because it offers the transformation of operational models in many industries. This is why there are many projects trying to implement block chain technology in sectors that are not the banking one; it can improve manufacturing processes, supply chains or identity verification.
However, the forecasting say that we’ll still have to wait 5 or 10 years until we see this type of technology widely implemented in common corporative systems.
Pragmatic approach of technology
In Vincle we apply a pragmatic approach of technology. Our mission is to provide our clients solutions that allow them to sell more and better. That is why, when facing technological challenges, we always look for concrete applications, trying out these functionalities with our loyal clients and analyzing the results before actually introducing them into the product.
We love this kind of collaboration with our clients, and that is why we invite you to join the group if you wish to.