Retailers can often take a short-term view on innovation, but what are the technologies that will transform the sector in the coming years?
When we talk about innovation, much of what we talk about deals with the immediate concerns of retailers.
I was afforded the luxury of helping develop a longer-term view of how technology will transform retail as a member of the World Economic Forum steering committee for a new trends report introduced at Davos.
We identified eight key technological innovations that will change the face of retail over the next 10 years.
The Internet of Things
Expect the full impact in two to five years as connected sensors transform the value chain when it comes to manufacturing, planning and buying.
New data sources will provide insight into consumer purchase patterns while real-time visibility of inventory will help companies optimise their supply chain and drive efficiencies.
Connected devices in consumers’ homes will automatically order new low-interest products, like pet food, when required.
Autonomous vehicles and drones
For the mainstream adoption of both these technologies the timeframes are longer – between six and ten years – with regulatory issues slowing down uptake.
However, once widespread they will aid distribution.
Self-driving trucks will result in increased productivity, whilst drones or ‘air-craft carrier’ vans transporting robots that can emerge and spread out on your road for local delivery will help to improve the cost-effectiveness of the all important last-mile delivery.
Artificial intelligence and machine learning
Widespread take-up is only around the corner, expected in two to five years.
Artificial intelligence (AI) will allow retailers to improve trend and volume forecasting and in distribution will allow for predictive staging.
Machine learning will also improve the customer experience by making predictive and relevant recommendations for purchase.
Another innovation which is close to mainstream readiness, robotics is expected to have an impact across the retail value chain via manufacturing, and picking and packing in-store by carrying out menial tasks such as shelf-stacking.
Robotics will reduce costs and free up staff to focus on consumers.
Improved data will allow for digital traceability from the supplier all the way through to the consumer.
This will allow retailers to understand any after sales issues immediately and to aid authenticity verification.
Retailers will also be able to clamp down on stock disappearance both within the supply chain, at store level, and following sale.
Another longer-term innovation, this technology will deliver quicker prototyping, alongside in-store manufacture, cutting down on distribution and allowing for the personalisation of products to customers’ specifications in-store.
Augmented and virtual reality
Whilst current usage is mainly for gaming or experiential projects, in two to five years, as costs come down, the technology is likely to be widespread in product design and far more embedded in retail locations.
Adoption of blockchain may be six to ten years away in retail but innovation continues apace.
The super secure technology underpins bitcoin and has a wide variety of applications across sectors, including retail.
It can provide a secure, decentralised digitisation of assets and transactions whilst providing a full audit trail.
Although some of these developments may be up to a decade away from becoming fully realised and embraced, retailers must begin considering the strategic and logistical changes they need to make to stay competitive in a fast-changing landscape.