Big data + Internet of Things = smart retail economy - Information portal

Big data + Internet of Things = smart retail economy

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24.04.2018 Количество просмотров 343 views
83b6331f039a85c4e510bcbd9f12d5e0.jpgWijnand Jongen, famous author and lector exploring future of retail and e-commerce.

New technology has always been the catalyst of social and economic transitions. New energy sources, technologies and means of communication brought true revolution to society, the economy and individuals, during the first two industrial revolutions. The present day is no different. The new economic paradigm of the ‘smart economy’ now provides the foundation for onlife retail. We are witnessing the dawn of a new age of technology. This new smart economy has unprecedented impact, something which is daunting and exhilarating at the same time.

Some of the before-and-after comparisons between the traditional and smart economy include: analogue vs. digital, car vs. self-driving vehicle, linear growth vs. exponential growth, desktop computer vs. smartphone, 2 dimensional vs. 3 dimensional, automation vs. robotization, internet vs. IoT, supply vs. demand, shoplifting vs. cybertheft, etc. What they have in common is technology as a catalyst. Some examples of the technology: big data, virtual and augmented reality (VR/AR), 3D-printing, blockchain, robots and artificial intelligence (AI). All the different technologies driving the smart economy are sure to have an immense impact on society as a whole. The retail business is about to undergo a massive transformation as a result. 

Big data is making everything smart

Big data is the lifeblood behind all this technology. Kenneth Cuker, the data expert for The Economist, and Viktor Mayer-Schönberg wrote that «big data refers to our burgeoning ability to crunch vast collections of information, analyze it instantly, and draw sometimes profoundly surprising conclusions from it». The retail sector has much to benefit from big data, with producers improving their analysis of production methods, and retailers discovering better ways to serve their customers. The ultimate strength of big data is to use the analysis of consumer information to benefit individual customers. Any retailer will like the sound of that, right?

Intelligent algorithms, founded in big data, can now translate individual consumer preferences into the production of goods and services. Using machine and deep learning techniques retailers can predict what consumers will be interested in next. Personality traits combined with recent buying patterns can provide useful information. It’s nothing new in the world of retail. Google uses techniques like this to display its ads in the very best spot. Similarly, Amazon taps into algorithms to show consumers relevant items, Booking.com and Spotify do the same for hotel rooms and music, respectively. Ultimately, the individual consumer benefits from this analysis.

Shoppers who enjoy a personal shopping experience can download an app, for each store or mall or shopping street. After that, smart shopping cities, streets and malls (and the individual retailers) can use this to monitor and influence consumer behaviour. London’s Regent Street one of the first in the world where some 130 stores can communicate directly with passing shoppers. Only the ones who have enabled the app and selected the information they would (not) like to receive are targeted, of course. Time will tell whether consumers feel exclusive, personalized offers overrule the feeling of being followed as they shop.

Where I personally would hate to be lured into every single store, I do appreciate apps like Starbucks, that allows me to order and pay for a coffee, bypass the line and scoop up my personal latte macchiato, with the loyalty points swiftly credited to my Starbucks account. Stores who follow that pattern might persuade me – and likeminded shoppers – to download their app. 

Connected stores are the future for retailers of every size and type. The future will be a blend of at home and in-store ordering, using smart home (ordering, speaking) devices at home and new in-store technologies like beacons in the store. All these technologies are built on big data and aimed at improving the daily lives of consumers and of improving customer experience and customer service. 

The thing is, it’s the Internet of Things

Imagine it, billions of machines connecting and sharing chunks of data with each other and with people. Could the Internet of Things (IoT) be the very exemplification of the smart economy? This is one of the top technologies of the future. The driving forces behind it are the ongoing exponential growth of micro-electronics, decrease in prices of computer chips and an increased memory capacity. 

As a rule, new technology seems to happen to people, who then seemingly have little trouble adjusting to all the new possibilities. Using a handheld scanner for grocery shopping, contactless payment at checkout, smartcards for public transport, beacon technology, smart screens on hangers, and so on. The benefits of the smart economy are welcomed by many consumers. Using more smart devices than we already do is but a small step. 

The second that machines, objects and people can connect anytime, anywhere, the possibilities for the economy, businesses and consumers will become nearly infinite. Back in 2003, there were ‘only’ 500 million appliances connected through the Internet. Cisco and Ericsson expect this number to have increased to some 50 billion by 2020. Research agency IDC has predicted that the turnover in IoT will reach roughly 1.7 trillion dollars in 2020. The added value to the global economy is immense.

In the future, literally every kind of store will be a connected store because of the IoT: supermarkets to hardware stores, travel agencies to banks, bakery shops to butchers. They’re going to create all kinds of ways to navigate the customer journey, either at home or in-store, with options to order from a mobile device, in-store Internet terminal or other device. Every kind of digital technology will be used in connected stores to improve customer service. Traditional retailers are slowly and grudgingly adopting these new options. Physical stores make customers actively decide to install their app, or switch it on, for every visit. US department stores Macy’s, Target and Walmart have started using IoT applications like beacons with high hopes that it will mainstream tracking customer behavior in physical stores. Customers who appreciate personal attention can opt to receive individualized messages on their smartphones, taking into account their in-store location, behavior and shopping profile. 

The big data battle 

Retail is sure to feel the impact of IoT. Online shopping has never been easier and more personal, with consumers linking their appliances to their personal profile. As a result, tech giants – Amazon, Alibaba, Apple, Facebook, Google, Microsoft, WeChat – now have unimaginable access into our private lives. We provide the data willingly, seeing the acquired benefits of big data and IoT as a small price to pay. We love the eco-systems of so-called all-in-one apps, which are built on the big data we provide. Take the Chinese super app WeChat, which already allows you to sort out practically anything you want based on your personal data: finding and booking a vacation, paying in online and physical stores, balancing your check book, splitting the check at a restaurant, setting up an appointment with your hair stylist, or writing online reviews. In China, around 1 billion Chinese cannot imagine life without it.

There are advocates of internet privacy, or critical voices out there, not in the least in the wake of the Facebook’s recent privacy scandal, where the data of 87 million users where shared without consent. Regardless of these valid worries, the world will be moving on. We are seeing the dawn of a new revolution, of a data explosion. It will allow patterns and trends to be deduced for a whole range of business sectors, with retail one of the most important ones. It will be up to the retail sector to earn keep consumer’s confidence and loyalty in the 21st century big data battle.

Source:  retail-loyalty.org


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