Emerging Technology and Retail
By David Dorf on Aug 15, 2011
Gartner recently released their 2011 Hype Cycle for Emerging Technology, and there are several items that impact the retail industry, many of which we've been studying carefully. The hype-cycle diagram is below, and for those that haven't seen one of these, technologies start on the left and move toward the right as they mature.
Source: Gartner, “Hype Cycle for Emerging Technologies, 2011,” July 28, 2011
I have a few comments to make, starting with the mainstream and moving back towards the triggers.
Location Aware Apps- Foursquare and the like are pretty commonplace now days, and I believe there must be some consolidation coming. We can't expect consumers to use multiple check-in apps, so I'm betting that Facebook will emerge as the winner with ShopKick sticking around as well. Apps that find products in nearby stores will also flourish.
Predictive Analytics- Predicting demand is key to running a profitable business, so this is pretty mainstream with tier-1 retailers now. Adding data sources like social networks to better predict trends should be coming soon.
Biometric Authentication- We added biometric authentication to our POS, but we haven't seen much interest from retailers. I would guess not having to worry about passwords would be a big cost savings over the long run.
QR Codes- We added the printing of QR Codes on shelf-labels so consumers armed with smartphones can access detailed information. This seems to be catching on with consumers, and I'm seeing QR Codes everywhere.
Consumerization- As I understand it, this trend means technology gets adopted at home first then makes its way into the business environment. That's certainly what happened with the iPhone and iPad, Facebook and Twitter, and many Web 2.0 technologies. These types of technologies will continue to follow young employees into retail stores.
Mesh Networks- RFID buzz died off for a while but seems to be making a comeback. We've had several retailers express renewed interest in tightening their supply chain using tags that are getting cheaper.
In-Memory Database- Over the past three years we've seen the rise of engineered systems where the software and hardware are engineered to work together yielding better performance. Memory continues to be cheap, so moving as much data into faster memory makes perfect sense. In addition to Exadata, look for more on this topic from Oracle in the near future. Open World is just around the corner.
Cloud Computing- I'm a big fan of utility computing regardless of where the resources are located (private, public, hybrid), which is why I really like Amazon's EC2. But I'm just not sure retailers are ready to give up so much control. After all, it only takes one hiccup on Black Friday to ruin a year.
Augmented Reality- The software libraries to support augmented reality apps are finally maturing, so we've started exploring uses in retail. Get ready to think of advertising and reporting in new ways.
NFC Payment- The technology has been ready for years, but until recently there haven't been big sponsors. Now we have Google and Isis with competing approaches. This will take-off, but it will take a while for all stores to be retrofitted with readers.
Social Analytics- I keep hearing that social for retail is overblown, but I truly believe it should be part of any retailers marketing activities. Yes the ROI isn't very clear, but since when has marketing had a clear ROI?
Gamification- People are competitive so using games to drive behavior is a natural fit, especially for the younger generation that is never far from an XBox, Wii, PS3, or DS. Look for more retail tie-ins with games from Zynga.
Big Data- I'm surprised this wasn't placed further along on the chart as I believe the technology is pretty mature, with several competing platforms. The key is to make Big Data and traditional database systems work together. This is how retailers will move from segments to individuals and achieve one-to-one marketing.
Video Analytics- As bandwidth and storage continue to get cheaper, video becomes more accessible to retailers. There's so much information we can gleam from customers by watching how they shop. Look for interesting combinations of video and location-based applications.
Overall, I believe the major emerging technologies are well represented on the chart. I can't think of anything that's missing, can you?