Artificial Intelligence and the Internet of Things
For retailers, artificial intelligence (AI) is clearing new paths to do business – touching distribution channels, customer service, workforce interactions and beyond. The estimated global size of the AI software and systems market is set to grow dramatically, reaching US $36 billion by 2025, and offers innovations that will completely redefine the entire retail experience – for retailers and customers.
Broadly speaking, AI is a computer performing a specific task that would otherwise require human intelligence. Many of us don’t appreciate when it’s working, but today none of us have escaped it. AI is in our cars, homes, phones, and especially our online experiences. Google uses it to provide the most relevant search results; Facebook to control what we see and don’t see in our Newsfeed; and Amazon to personalize our online shopping experience.
AI is now merging with the Internet of Things (IoT), a concept that includes getting smart objects and devices connected to the internet to “talk” to each other. As our cars teach themselves and each other to drive, so too will many of our everyday experiences transform. It’s no wonder why #AI and #IoT were trending throughout the National Retail Federation Big Show in January.
Welcome to the Store of the Future
Back in 2010, the French robotics manufacturer Aldebaran, which has since been acquired by Tokyo-based SoftBank, worked together to develop Pepper, a humanoid robot that can recognize human emotions and adapt its behavior to interact with customers. Pepper has made its mark in Japan where it’s used to welcome customers and answer basic questions in 140 SoftBank mobile stores.
Though Pepper is somewhat of a store floor anomaly and limited in it capabilities (he was recently “fired” from a Scottish grocery store due to poor customer service), retail is positioned to benefit from AI and IoT and is starting to alter the in-store experience in other innovative ways. A more here-and-now example is Amazon Go, a cashier-less grocery store, that promises “no lines, no checkouts, no registers” that recently opened its doors and its smartphone-scanning gates to the public.
Amazon used computer vision, machine learning and sensor fusion to develop “Just Walk Out” technology resulting in a near frictionless shopping experience. Shoppers scan their Amazon Go app from their mobile device when they walk into the store, pick up the items they want, and simply walk out. On the back-end, Amazon’s cameras and sensors detect everything the customer takes or returns to the shelf, and keeps track in a virtual shopping cart. The AI supporting the IoT technology learns from each customer visit and becomes better at every subsequent transaction.
Amazon Go customers will still see replenishment, food preparation, and customer service employees, but for the first time ever AI and IoT have enabled the elimination of the age-old cashier. All customers are now shoplifters – that is until seconds after they pass back through the gates and receive their receipt on their smartphone.
And so begins the transformation of the customer experience. In the next few years, micro-location technology will enable the majority of retailers to know when customers arrive, where they are, what they want, and how to help. Omnichannel will grow to empower customers to effortlessly buy, receive and return anywhere. More data than ever for insights, optimization, and personalization will level the playing field for all retailers. This transformation demands evolution of the retail employee.
The New Retail Employee
The more informed and demanding customers become, the more educated and engaged employees need to be. Over time, roles will change – some will disappear, some will be created and some will stubbornly hold on. Cashiers may go the way of the milkman, but even the milkman is evolving.
After dissolving the cashier role, Amazon Go needed an in-store smartphone technical support role to ensure the success of all transactions. Ironically, with all their technology, they still need someone to physically check IDs before customers can take alcohol off the smart shelf.
AI augmentation of warehouse operations will extend to store replenishment, replacing inventory and pricing tasks, and requiring freshly educated employees. Even food preparation may look different. The motion-capturing kitchen robot Moley (company motto: “The Future Is Served.”) could put executive chefs on the chopping block, but it will still need a sous-chef… for now.
Associate education and training will be paramount in the brave new world of retail as requisite skills pivot with AI, but customer service will differentiate the Store of the Future – and not just from an exceptional people skills perspective. The new world of customer service is not only frictionless, it’s immersive; and The New Retail Employee is the tour guide during the discovery and decision-making process.
Prepare for The Race
So how do retailers prepare their New Retail Employees for the Store of The Future? Just as one prepares for a race: Put a system in place to achieve a goal, and execute.
If you’ve ever trained for a marathon, you quickly learn it’s a completely different animal than the half marathon. A race that’s double the distance takes more than double the training.
To succeed in the Store of the Future, retailers need to double down on the systems and processes that govern and shape the New Retail Employee. Although workforce management (WFM) vendors are experimenting with IBM’s Watson and machine-learning forecasting, a WFM system won’t train and engage your workforce when iPads are the new shoe guy.
No, it’s time to think holistically. It’s time to think about your hourly associates’ digital workplace.
It’s about the interactive, immersive Store Communication platform through which the New Retail Employee discovers that buying shoes has changed. He has instant access to the best information about the new shoes he’s retrieving for a customer he can address by name, offer a try-on and make conversation about how that last pair of Red Wings are holding up.
It’s also about the Employee Experience platform through which the New Retail Employee assimilates, finds commonalities with her coworkers, learns what’s cool and what’s required of her. She is onboarded and engaged effortlessly, can pick up and trade shifts before she even gets into work and can train on a new product or promotion at any time on her mobile device.
Though we can’t accurately predict what will happen with the labor market, it’s clear that AI and IoT are here and the race for the New Retail Employee has already begun. How are you preparing?