Thursday Jan 10, 2013

Innovation Labs

Once of the trends I noticed in 2012 was retailers creating standalone innovation labs.  The ones that seem to get the most notice are Walmart Lab and Nordstrom Lab, most likely because they have great marketing to compliment their inventions.  Two new labs that just started are the Staples Velocity Lab and the Home Depot Lab.  In most cases these labs stem from acquiring a start-up, and not wanting to crush the start-up spirit, the retailer keeps the company separate.

Having a separate lab has a few important advantages.  First, since its not part of the larger IT organization it doesn't get sucked into fire fighting, which can be a huge distraction.  Also, its not bogged down by enterprise-class software development processes that tend to slow things down.  An important part of innovation is constant tweaking that can't be documented up-front.  Having labs focused on retail-specific solutions keeps a retailer's edge.

At Oracle Retail we established the Retail Applied Research (RAR) team a couple years ago under the leadership of John Yopp.  They research emerging technology, collaborate with other labs, and convert ideas into prototypes in a nimble fashion.  Their efforts help us better assess the value of ideas and de-risk some of the technology.  This year we'll be demonstrating two of their projects in our booth at NRF.  We'll be demonstrating an Isis payment using NFC with our Mobile POS running on a Verifone sled. Additionally, we'll be showing how voice-response can speed transactions on our Mobile POS.

To foster the innovative spirit, we also have an annual Science Fair in our R&D organization.  Small teams with innovative ideas are given the week of NRF to build prototypes which are then judged based on originality, execution, and presentation.  Last year we had some pretty cool ideas using iPhones and Twitter that led to patent applications.

Technology doesn't stand still, so I'm hoping that more retailers create separate labs to incubate ideas in 2013.  Nobody can afford to stand still.

Tuesday Dec 06, 2011

2012 Predictions for Retail - Part 2

I think the first four predictions are pretty likely, so let's look at some things that are a bit of a stretch.  These next four predictions are based on emerging technologies making inroads but not widespread adoption.  Let me know if you agree or disagree in the comments.


5. Usable Augmented Reality

The first usable augmented reality app I used was Yelp when they had a semi-secret backdoor to access Monocle.  The concept has been accessible to us since Apple combined the camera, GPS, and accelerometer in the iPhone, but I haven't seen anything I would use on a regular basis.  Amazon's Flow is certainly a step in the right direction as is Tesco's subway store, and I think we'll see some more useful applications of AR next year.

And AR isn't limited to consumers.  It can be helpful for store managers to be able to get information about sales and inventory as they walk the store.  If a manager wants to know how many transaction per hour a checkout associate is doing, she need only point her camera.

6. Accurate Indoor Location

GPS has saved my marriage in several situations, and I can't live without it anymore.  Its perfect for driving, but its not accurate enough to help me navigate my local Lowes and Home Depot.  That's because GPS doesn't work well indoors.  Smartphones typically use a combination of GPS satellites and WiFi access points to triangulate your position.  The WiFi part is getting more accurate, and some systems leverage closed-loop security cameras to help.  This year will be first rollout of accurate in-store directions for a big-box retailer.  Not sure which one will be first, but I think the home improvement chains have the most to gain. 

Imagine standing in an aisle and pressing a "help me" button on your phone, and a clerk walks right to you for assistance.  Or getting turn-by-turn directions to find the garage door openers, for example.  Accurate indoor location also helps with geo-fencing that I mentioned earlier.  You might receive location-specific offers and product information as you walk.

7. Shopping with Siri

Apple's Siri is bringing to light the augmented humanity concept, the collaboration of humans and machines in transparent ways that enhance our everyday lives.  A subset of the concept is using natural user interfaces that are easy to manipulate.  In the case of Siri, voice response systems that understand questions and provide useful answers in context.

As smartphone adoption continues to grow in 2012, so will our dependence on them for providing information.  New mobile application that take advantage of voice response, computer vision, and even eye-tracking (remember, while you're using your iPhone, there's a camera pointed at your face) will begin to emerge.

This means it will be even easier for consumers to get any and all information about products and brands.  Look for Google and Apple to take the technology lead, and Amazon to capitalize on the advancements.

8. Behavior Profiling

When I shop, there are certain things that persuade me to buy: free shipping, good reviews, great price, perceived quality, easy returns, etc.  But those things vary by person and situation.  What if a retailer had a shopping profile on each of its customers and knew how to efficiently market to that customer?  While I don't that we'll get to that point in 2012, I do think significant progress in that direction will occur.

Take myLowes for example.  Lowes is collecting valuable information about each of its customers and will be better able to tailor offers that are more likely to be of interest.  Lowes will sell more, and its customers will have a better experience.

Look for retailers to offer more differentiated loyalty programs and then develop sophisticated marketing plans at more granular levels using all that psychographic big data.


2010 was the year when mobile went mainstream in the retail industry.  2011 marked widespread adoption of Facebook to drive sales and engage consumers.  I think 2012 will be the year that cloud computing gets serious. Look for lots of acquisition in this space, and more retailers to dip their toes in the water.
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David Dorf, Sr Director Technology Strategy for Oracle Retail, shares news and ideas about the retail industry with a focus on innovation and emerging technologies.


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