M&S unveiled its “game-changing” tech partnership with Microsoft 20 months ago. What impact has it had so far?
In June 2018, Marks & Spencer unveiled its strategic partnership with tech giant Microsoft to test tech and AI in stores, which the retailer’s chief executive Steve Rowe said “could be a game-changer for M&S – and for retail”
But 20 months on, all has been quiet on the grocery tech front. Have the AI robots burnt out already or are they being kept under wraps until there is solid evidence the hard work has paid off?
What is possible
M&S and Microsoft said they would work together to explore how technologies such as AI can be used within the retail environment to improve customer experience and optimise operations.
This video shared by Microsoft shows some of the real-life uses of this technology in-store.
M&S plans to integrate machine learning, computer vision and AI across every endpoint, both in stores and behind the scenes, with every surface, screen and scanner creating data employees can act on.
Cameras in-store will be able to provide real-time updates to staff to replenish stock and will monitor incidents such as spillages and alert staff when action is needed.
Technology will also provide data to management if specific aisles are more crowded than others or if the store layout would benefit from being changed.
External data is also analysed, such as local events that may lead to increased footfall, which allows the retailer to flex staffing levels accordingly.
As impressive – and Big Brother-like – as this all sounds, the technology is still only being trialled in one unnamed M&S store, with no rollout plans as of yet.
Eagle Eye head of industry insight Miya Knights says the tie-up has been “slow to produce tangible results” but suggests benefits may have been made behind the scenes.
“It could be that much of the improvements to date have been made ‘under the covers,’ as it were, focusing on data and infrastructure development to boost flexibility and interoperability.
“But this should eventually manifest both in the pace of customer-facing innovation and at the bottom line.”
Practicology chief commercial officer Jeremy Wilson says it is likely that any noticeable benefits will be behind the scenes at this stage.
“I would think that most of the benefits have been seen in non-customer facing areas, using IoT technology to improve supply chains,” he says. “The customer will see improved stock availability in-store and some more refined cross-sell offers online, but not a real shift in [customer] experience.”
No news from Walmart and Carrefour
M&S isn’t alone in entering big technology tie-ups. In fact, the summer of 2018 was a busy one in the world of retail technology with both French grocery giant Carrefour and the world’s largest retailer, Walmart, signing high-profile partnerships.
Carrefour teamed up with Google in June 2018 to focus on three areas: the availability of Carrefour’s products on a new Google Shopping website and Google Assistant; accelerating its digitisation; and the creation of a collaborative innovation lab.
The pair are working together to work out how to serve shoppers better on Google’s platforms – Google Shopping, Google Assistant and Google Home.
At the time, Google France vice president and managing director Sebastian Missoffe explained: “Shoppers today are saddled with disconnected experiences through the shopping journey, which often leads to abandoned shopping carts and low customer satisfaction and loyalty.
“Customers want assisted, simple and personalised experiences that help them make decisions on what to buy, assist with easily building baskets across surfaces and provide a seamless checkout.”
Since the partnership was unveiled, Carrefour has opened a 2,500 sq m digital hub in Paris to develop new customer experiences. The hub is home to more than 300 employees that specialise in apps and ecommerce and experts in AI and machine learning, who are tasked with integrating group data and developing omnichannel environments.
“Our teams will be working on innovative projects in AI and machine learning in order to create value for our business. This is really a great asset for the realisation of Carrefour’s digital ambitions by 2022,” says Amélie Oudéa-Castéra, who is responsible for ecommerce, data and digital transformation at Carrefour Group, told Retail Detail.
Walmart signed a five-year agreement with Microsoft in July 2018 to accelerate its digital transformation using the tech giant’s cloud solutions to make shopping easier and faster for its customers.
However, despite multiple approaches from Retail Week, both Carrefour and Walmart declined to divulge details on the progress of their partnerships and there remains little information in the public domain.
Knights believes despite these partnerships “signalling that tech and digital capability has become a strategic necessity”, we will not see many more retailers striking such partnerships until these frontrunners see the fruits of their labour.
But while M&S, Carrefour and Walmart may still be in the exploratory phase, if the perceived benefits of these partnerships come off they may find themselves not just a step, but several algorithms, ahead of the rest of retail.