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Thursday 25 April 2019

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NRF Review - digital transformation to deliver ROI

Written by Glynn Davis
21/01/19

Almost 40,000 senior retailers and IT suppliers descended on New York last week for the annual get-together that is Retail’s Big Show, organised by the National Retail Federation (NRF).

Although there were lots of cutting edge solutions on display, there was also plenty of evidence of technologies that clearly have an identifiable return on investment (ROI). This sat alongside the widespread acknowledgement among retailers that none of this technology works unless they have put in place the relevant infrastructure via a digital transformation.

This was certainly the message conveyed by Jeremy King, chief technology officer at Walmart, who presented one of the keynotes and highlighted how an initial re-platforming of the group’s e-commerce business led to the complete digital transformation of the whole organisation.

It now has in place the platform to take advantage of its massive investments in technology - that amounted to $11.7 billion in 2018 alone.

Investing for the future

He revealed that the group is investing in the likes of virtual reality to help train its employees, blockchain for tracking the freshness of grocery products, and computer vision combined with robotics to better manage its inventory.

“We’ll see a transformation in the automation of processes,” said King. “Even the unloading of trucks involves a robot sliding into the truck and sorting items onto pallets, and then there is another robot scanning shelves in-store.”

The move by robots into stores is very much a work in progress, according to Joel Read, chief executive of IamRobotics. “The looming labour shortage makes it inevitable,” he stated. “There is a blurring of the warehouse and retail with robots handling the picking of items from a [online order] pick-list.”

Rise of computer vision

This was certainly prevalent at NRF this year. King commented: “I’m excited about using computer vision to say recognise the colour of lipstick so we can ensure the correct item is on the shelf – this visual technology is improving.”

Alec Gefrides, general manager for transactional business at Intel, recognised this development and the Intel booth this year showcased a variety of solutions involving cameras and visual computing technology, including an AI camera-based vending machine that JD.com has rolled out to 1,000 stores in China. Cameras are used to detect when goods have been removed from the shelves and these are then charged to a customer’s account via the widely used WeChat platform.

Whole Foods is using a solution from Mood Media that identifies the reactions of customers when viewing food items on the shelf and from this the technology determines the content to display on the digital screens built into the shelving unit.

Cameras were also utilised within a solution from CloudPick that has been developed for use in convenience stores to determine what products have been picked up from the shelves and placed in the customer’s shopping basket.

Probably the most exciting camera-based solution on show with Intel involved drones from technology provider Pensa. It is being tested by brewer AB InBev at the IGA Extra Beck store in Montreal. The drone flies around, according to the store’s floor-plan, and takes video footage to monitor the inventory on the shelves and to build planograms.

Although these solutions can operate discretely, Gefrides highlighted how Intel was launching its Open Retail Initiative at NRF to help retailers transfer data between these types of systems. Utilising such data from multiple sources will be essential for retailers to compete effectively with Amazon, he suggested.

Steve Laughlin, vice president and general manager of global consumer industry at IBM, predicted much greater use of visual search with ‘shopping the look’ becoming more widespread. “I’m surprised more retailers have not taken it up yet,” he added.

Grounded on ROI

In addition, IBM has built a raft of algorithms with many use-cases that bring a ROI from computer vision. These include recognising things on the floor of stores, to intruder alerts and facial recognition solutions.

Achieving an ROI was very much on the mind of Nick Bertram, president of supermarket chain Giant Food Stores, who is in the midst of the largest deployment of customer-facing robots and said the initial focus for ‘Marty’ the robot is to ensure the safety of the stores, by scanning for spillages on the floor.

“You have to be strategic with the ROI,” he explained. “Some practical things will get initial payback before we then move onto other elements, we can gradually build modules on top of this.

“The costs go down as the adoption [of applications] increases,” he said, adding that the use of Marty will also help counter labour shortages.

Ongoing growth of cloud

What these new technologies bring is an increasing amount of data processing and the issue for many retailers is around scalability. Greg Jones, director of industry solutions for retail and consumer goods at Microsoft, recognised the challenge of scaling within retailers’ businesses and how the cloud is playing a major role. A number of retailers at NRF referenced the greater use of the Microsoft Azure cloud solution.

“Sensors and cameras are now used all around and the expectation from retailers and customers is to have faster access to data,” said Jones. “It’s about empowering employees [with this data] and possibly also using robots to help with stock-outs in-store.”

He cited US supermarket chain Kroger: “It has its shelf edge labels, its advertising platform, a camera network, and scan-and-go in its stores that are all hosted in the cloud – it makes it easier to join this all together and to integrate it across the whole business.”


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