Five Retail Tech Trends that Emerged at the 'Big Show' - eMarketer

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Five Retail Tech Trends that Emerged at the 'Big Show'

Retailers grapple with online competition

January 19, 2017

At the just-concluded annual Big Show, the world's largest retail trade event hosted by trade group National Retail Federation, more than 35,000 attendees, including a who's who of retailers from around the world, gathered at the Javits Center early in the week to discuss topical trends and explore how technology could help retailers attract shoppers and generate more profit.

Many top tech executives from Intel to IBM took center stage as big data analytics and other technology increasingly become a key part of retailers' survival and success strategy. Intel's CEO Brian Krzanich, for instance, said the tech giant plans to spend $100 million the next five years in retail related initiatives.

Retailers grappled with technology topics while buzzing about the struggle to compete against Amazon. Each week brings more news about a broad swath of department store, apparel and other retailers bleeding sales and closing stores. Consumers still prefer to shop at retailers with both an online and a physical presence, while many brick-and-mortar chains are counting on initiatives such as a smarter omnichannel strategy to help them beat pure-play online retailers and bring traffic to stores.

Here are the major takeaways from the Big Show, boiled down into five top technology trends to watch.

No. 1: Machine learning and artificial intelligence

The trend of using computers to learn about consumer behavior and pattern and adjust product marketing and discount strategy accordingly will continue to dominate conversations, especially following the success of Amazon's digital voice assistant and Alexa-powered Echo.

Office supplies giant Staples, for instance, is giving its traditional Easy Button a new tech makeover. The company is using IBM's Watson Conversation service to allow small and medium-sized retail customers to ask questions such as "What's my office Wi-Fi password?" and to order goods and track shipments.

"We are in data-gathering mode," said Staples chief technology officer Faisal Masud in an interview. "We are learning about our customers. It's a discovery process for us. This gives us an insight about our customers. We wouldn't know what else happens if it's just customers ordering on our website."

No. 2: Robots are coming and expect them to be both in front of the store and back in the warehouse.

Robots, whether it's from Softbank's buzz-generating Pepper to a nondescript looking stand, will be used both as store-traffic-increasing vehicles as well as tools to help take over some menial tasks. For example, expect to see robots walking store aisles to check shelf in-stock level. Robots also have been developed to pack pieces, say, for a personal care product gift box subscription service, which had previously been done by humans.

"Robotics is here," Steve Carlin, vice president and general manager of SoftBank Robotics America, said. Retailers are telling us that "we are having a hard time telling our brand story. How can you help us tell the story so consumers won't go elsewhere?"

Softbank is introducing its humanoid robot Pepper in the US to retailers now that it has had its US debut in California in November. Carlin argued Pepper's form factor would make a difference. "It's not a flat screen that's static," he said. "If you have Echo or Google Home, you'll forget it's there. We have no shortage of people interested in Pepper."

No. 3: RFID

RFID (Radio Frequency IDentification), which traditionally has been used as a tool to help retailers combat theft and loss, is getting a different focus especially as the tag cost declines. Levi's, for instance, is working with Intel to use RFID tags and sensors to help it track store inventory in real time.

"In-store inventory insight is an age-old problem for retail," said Carrie Ask, Levi's executive vice president and president of global retail. "'Out of stock' and 'couldn't find my items' are two top purchase barriers."

Ask said these issues are even more pressing for today's brick-and-mortar retailers especially because while store traffic may be down, those consumers who visit stores actually have a higher purchase intent.

"Inventory is the root cause of shoppers going to stores less," Joe Jensen, Intel's VP of Internet of Things Group and general manager of retail solutions unit, said.

No. 4: Chatbots

As part of the broader umbrella trend under big data analytics and artificial intelligence, retailers will increasingly use chatbots to either test or recommend products or to answer customer service needs. For instance, 1800-Flowers unveiled a gift concierge that uses natural-language processing to learn conversation and give customers hints such as buying roses or tulips. Fashion designer Rebecca Minkoff is using a chatbot service to test new products.

No. 5: Customization and personalization

In the wake of Nike's successful customized Converse shoe move, many other companies have also hopped on the personalization bandwagon and seen success. "Customization is the future," said Jodi Fox, co-founder and chief creative officer of Shoes of Prey, which allows customers to design shoes from choosing heel heights to color and width. "There's a movement."

In another example, Xerox made its presence at the trade show to promote its new direct-to-object inkjet printer that can do custom design and, say, print a name on a water bottle in about a minute. "We see a huge market in the retail environment [for the jet printer]," said John Mangieri, a specialist in custom solutions at Xerox. "It's about personalization, customization and immediate gratification."

—Andria Cheng

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