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Frictionless Retail in The Age of Data

Everyone in the retail industry knows how important it is to make the shopping experience as painless as possible. There are many technologies being used in an attempt to achieve that ideal of a “frictionless” shopping experience, and most are on display, or have been discussed, at CES this week.

Retail has been going through a huge disruption and transformation recently, and the winners and losers of that disruption are still not entirely clear. But what is clear is that those who embrace the challenge and the technology have the best chance of being on the right side of this battle for the customer's hard-earned dollars.

The new breed of retail giants such as Amazon and Alibaba are online marketplaces. They have based their entire business model on that technology and are using it to great effect, and their success is hard to ignore. Many of us think that Black Friday or Cyber Monday are the biggest retail days of the year, but they have now been surpassed by Singles’ Day. Singles' Day is Alibaba’s biggest shopping day of the year, held on Nov. 11, and this year sales were more than $30 Billion. That’s all online and in one 24-hour period.

Traditional retailers are also well and truly focused on the drive for technology. Walmart’s Charles Redfield, executive vice president of food, was one of IBM lead Ginni Rometty’s guests in her keynote, and they talked about their partnership to use blockchain to improve the supply chain and, in turn, the traceability and the safety of the goods they sell. This is being driven throughout the supply chain regardless of vendor size in a way that’s easy to apply. This is an initiative that both Walmart and IBM expect to see rolled out industry-wide. Previously, tracing a banana from shelf to source took around seven days; now it takes just over two seconds. Fun fact: Walmart sells 1.5 Billion pounds of bananas every year.

In a press conference on Monday, Proctor and Gamble’s Phil Duncan, Marc Pritchard and Kathy Fish outlined how they are changing the way they operate, starting with how they innovate. Trends such as urbanization, a surge in the aging population, resource scarcity and the pervasive nature of digital technology are driving this huge business to try and think like a lean startup and develop ideas in a more agile and creative manner. In P&G’s words, they are “innovating how they innovate.” P&G currently has more than 130 startup-stage projects running, driving new ideas to the market faster than ever before, many of them technology led. They call this initiative the P&G Life Lab, and one of the many innovative products developed there is SK-II Smart Bottle, an AI supported shopping experience utilizing Augmented Reality (AR), Facial Recognition and Smart Packaging with Auto-replenishment, delivering personalized skincare when it is needed.

We know smart packaging is a game changer for retailers and brands, delivering, among other benefits, that highly prized frictionless shopping experience, particularly when paired with auto-replenishment. Imagine taking a handful of household products, such as washing detergent, coffee, toilet paper, wipes, etc., and never having to shop for them again. After all, you’ve already selected your brand and variety. Amazon’s Dash Replenishment Service allows third-parties to interface with its order and fulfillment services to have products delivered on a just-in-time basis. Let’s face it, we could all find something better to do with the time, energy and cognitive overhead wasted on shopping for these items.

As a member of the Amazon DRS Solution Providers program, we’ve helped numerous brands get value from smart packaging and auto-replenishment. While brand loyalty is an important driver, it is impossible to overestimate the value of the consumer data that comes from these systems. Jabil has also created connected sensing solutions that let the consumer or the ecosystem know when a product is ready for replenishment, all backed by the enterprise software to get the most from the data generated. We’re able to combine our ability to innovate and design technology with years of experience in packaging, along with the scale of a company with 100+ facilities, including dedicated packaging plants in most geographies.

Amazon knows a thing or two about frictionless retail. Their recent Amazon Go stores, opened in metro areas, allow shoppers to browse, pick up what they want and leave without having to interact with a cashier or sales assistant. Cameras detect what each customer picks up and charges it directly to their Amazon account. Walmart is now working with Microsoft to create something similar.

In-store things are changing radically, and one of the technologies making waves in stores is Virtual and Augmented Reality, or Mixed Reality as many call it. Smart mirrors are finding their way into stores allowing people to try virtual makeup or even clothes from online stock as well as physical stock. This blend of the virtual and physical world is something shoppers are becoming increasingly comfortable using. As an example, Ikea has a VR app that allows you to use your smartphone to see what a piece of furniture will look like in your own home.

Also finding a place in retail is the digital assistant, and in some cases robotic digital assistant. And robots are also working hard in retail stores and warehouses to make sure the stock is in the right place and the shelves are filled when they need to be. Badger Technologies, for example, provides a fully autonomous robot to address out-of-stock, planogram compliance, price integrity and other operational inefficiencies.

But by far the most important part of this technology puzzle and this retail revolution is data. The whole connected ecosystem is creating data like retailers have never seen before, and they are starting to unlock the potential of that data. Many are starting to utilize artificial intelligence (AI) to help them derive insight and make faster, better decisions on consumer preferences and behavior.

At the end of the day, what you, as a consumer, want is a fast, frictionless, personalized service. And what the retailers want is the data that comes from this digital transformation to make sure they have what you want, when and where you need it.