Founder: Turnaround Talk
In 1995, Nike launched its range of Air Jordan sneakers. At the time, the company said it would be happy if it made $3 million of sales in a five- or 10-year period. Today, Nike sells $20 million worth of Air Jordan’s every three seconds. Technology has been a key role player in this.
This is primarily down to the popularity of the brand and the credence that it has as a household name. However, Nike has worked fastidiously on ways to improve access to its products. A major part of this was Nikes move to shift its primary focus on online retail. Not only does it sell $20 million of Air Jordan’s every three seconds, but the company also reached its five-year sales target in just a single year (2021)
The Fourth Industrial Revolution has wither been a disrupter or a source of profit for companies. How can turnaround professionals steer the conversation towards embracing technology? I recently read an article by Deloitte which discusses this in detail.
Biometric technology
The article points out that we’ve seen an increase in biometric technologies, mostly focused on using fingerprint or facial recognition to identify and authorise in-store activities like payments and checkout. In retail, multiple payment vendors are experimenting with biometrics. ‘Pay with a Selfie’ by Alibaba is a great example.
Biometric technology enables retailers to dramatically change their checkout process, which increases customer satisfaction and decreases staff time (due to automated POS systems and unmanned touchpoints).
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AI & self-learning machines
The article adds that retailers have started to use Artificial Intelligence (AI) and machine learning to not only increase operational efficiency but also improve the customer experience.
Macy’s uses AI to power their in-store app, which helps customers navigate their stores and North Face has introduced AI to assist shoppers on their website. In the future, we think it’s likely that AI-powered solutions will also support store associates. For instance, AI-powered software might be able to provide live detailed product information or recommendations with which associates are able to better serve customers.
Computer vision
The article points out that, with computer vision, retailers get real-time feedback through images and videos. This is an easy way to automate visual tasks humans would usually do, like checking inventory on the floor and observing customer preferences and profiles as they move through a store.
In retail, companies like Monolith have developed camera vision algorithms, as part of their offering, which track customer profiles and in-store behaviour to provide recommendations for optimising category performance, shop layout, and allocate associates efficiently. Computer vision enables retailers to understand their customers and provide actionable insights based on that.
The article adds that linking computer vision with other instore technologies like radio-frequency identification (RIFD), which enables analysis of product interactions, provides value through the aggregation of data and cross-touchpoint analysis. In the chapter ‘The Belgrade Connected Store Experiment’, we will elaborate on the use of computer vision in an actual store.
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The Internet of Things
The article points out that it has been nearly two decades since the Internet began to fundamentally reshape the retail landscape. Yet even as the Internet’s place in retail strategy has come to define the new normal, another suite of technologies — the Internet of Things (IoT) — threatens to reshape the competitive landscape, again. Through the deployment of sensors and the collection and analysis of the data they generate, IoT opens new avenues to influence and augment actions, from urging you to get up from your desk and move, to replenishing inventory when a store shelf empties.
We have seen IoT platforms move their way into retail, to help aggregate data from different solutions and assist retailers in making sense of all the data that is being generated in the store. One of those platforms, PTC ThingWorx, is currently being used in our connected store experiment in Belgrade. It’s been successful in enabling data management, generating insights and providing analytics.
Deloitte believes these trends are important to retail at the moment. However, retail is constantly changing, and new trends will develop. Therefore, we believe that successful retailers must be continually tracking these developments. The only way to do that is when you have actually welcomed technology in your organisation, including the mind-set it requires.
Traditionally, retail has not been a hightech business. However, with the rise of technology, start-ups and new innovations have increased dramatically over the last decade and will continue to do that in the future. Therefore, we feel it is necessary for retailers to understand the role technology plays in the stores, but moreover in their entire organisation.
The above information is the perfect way for turnaround professionals to begin the conversation with their clients about technology and adopting it on a large scale that can benefit their business. while some companies may accelerate differently and have different risk appetites when it comes to technology, this is not a case of nice to have. Technology adoption is critical and addresses many pf the major challenges that are troubling companies in todays environment.
