The National Retail Federation's 2020 Big Show in New York was jam packed full of robots, frictionless store mock-ups, and audacious displays of the latest technology now available to retailers. Dozens of robots, digital signage tools, and more were available for retail representatives to test out, with hundreds of the biggest tech companies in attendance offering a bounty of eye-popping gadgets designed to increase efficiency and bring the wow factor back to brick-and-mortar stores. SEE: Artificial intelligence: A business leader's guide (free PDF) (TechRepublic) Here are some of the biggest takeaways from the annual retail event. With the explosion in popularity of Amazon, Alibaba, and other e-commerce sites ready to deliver goods right to your door within days, many analysts and retailers figured the brick-and-mortar stores of the past were on their last legs. But it turns out billions of customers still want the personal, tailored touch of in-store experiences and are not ready to completely abandon physical retail outlets.
The success and fast expansion of Amazon Go has led other retailers and venues to seek startup help ... [ ] for their own cashierless checkout-free stores. On Amazon's jobs site, a keyword search query for Amazon Go yielded 3,500 results, seeking to fill positions manning the cashierless stores and looking for a head of marketing for the concept and a wide variety of engineers and program managers. Meanwhile, six months after the first Amazon Go opened in New York in May, six stores are in operation in the city, including four located less than a mile from one another in Midtown Manhattan. Two more are scheduled to open soon in the city. Those job postings and the fact that Amazon Go is cropping up in busy commercial sections of New York are just the latest signal of the Seattle giant's ambition to further expand its Just Walk Out Shopping concept, which features in-house-built computer vision, sensor fusion and deep machine learning technologies similar to those used in self-driving cars.
The artificial intelligence industry has skyrocketed in recent years, powering technologies behind smart speakers and self-driving cars, but that growth is coming at a cost. Researchers at the University of Massachusetts Amherst recently conducted a study assessing the energy consumption required to train several common large AI models. The study revealed that the training process can emit over 626,000 pounds of carbon dioxide, nearly 5x the lifetime emissions of an average car, or the equivalent of about 300 round-trip flights between New York and San Francisco. The benefits from the advancements in AI and other emerging technologies at the expense of the environment are simply not worth it, say many industry experts who are urging big tech companies to ramp up their sustainability efforts. Failing to do so could leave the companies' reputations at risk, they said.
Malcolm Fisher of Domino's Inc. learns about the Zivelo self-order kiosk from Mike Moon at the NRF Big Show. The merging of digital and physical retail continues to advance at a rapid pace, giving new life to an industry that many believed was headed for oblivion. The race to introduce interactive technologies in stores has unleashed a historic demand for self-service kiosks that was in full view at the NRF Big Show at Javits Center in New York City this week. Self-serve kiosks were dominant on the trade show floor, offering a range of technologies such as artificial intelligence, robotics, virtual reality, augmented reality, facial recognition, voice recognition, machine learning, advanced analytics, digital currency acceptance and more. The cashierless store concept, spearheaded in the past year by Amazon Go, has spawned scores of competitors, several of which were on display at NRF.
From cashierless Amazon Go stores to Walmart's self-driving vans for food drop-offs, tech is revolutionizing grocery shopping with an emphasis on speed and convenience. Now a lesser-known startup is entering the fray with its AI-powered shopping carts that could put an end to bothersome checkout lines at your local store. Equipped with an interactive display and card swiper, the Caper smart shopping cart lets you scan an item's barcode as you shop and pay before you leave. It's already available in two stores in New York, claims the company, which lists Key Food Fresh, Met Fresh and Pioneer Supermarkets as its retail partners on its website. But Caper will need a bigger team-up if it wants to go the distance.
Amazon is the exception to nearly every rule in business. Rising from humble beginnings as a Seattle-based internet bookstore, Amazon has grown into a propulsive force in at least five different giant industries: retail, logistics, consumer technology, cloud computing, and most recently, media and entertainment. The company has had its share of missteps -- the expensive Fire phone flop comes to mind -- but is also rightly known for strokes of strategic genius that have put it ahead of competitors in promising new industries. This was the case with the launch of cloud business AWS in the mid-2000s, and more recently the surprising consumer hit in the Echo device and its Alexa AI assistant. Today's Amazon is far more than just an "everything store," it's a leader in consumer-facing AI and enterprise cloud services. And its insatiable appetite for new markets mean competitors must always be on guard against its next moves. As the biggest online retailer in America, the company accounts for 5% of all retail spending in America, and the company has been publicly traded for two decades. While its market capitalization has swelled recently, so too have expectations. Wall Street banks like Morgan Stanley expect Amazon to continue growing at a rate that no company its size has ever done before: 16% average compound growth in sales through 2025. If Amazon were able to satisfy the lofty goals, it would be "the most aggressive expansion of a giant company in the history of modern business." Understanding the many-headed beast that is Amazon is no easy feat, especially because Amazon is far less transparent than its peers. As the Times has written, "It isn't just secretive, the way Apple is, but in a deeper sense, Jeff Bezos' e-commerce and cloud-storage giant is opaque. Amazon rarely explains either its near-term tactical aims or its long-term strategic vision. By all accounts, Amazon is just getting started in newer initiatives like cloud services, artificial intelligence, and logistics. Given Amazon's enormous breadth, we won't be covering every aspect of its business. Jeff Bezos, the company's founder and long-time CEO, first hatched the idea for Amazon while working on Wall Street at the hedge fund and tech private equity group D. E. Shaw & Co. For a while, it was bootstrapped as an internet bookstore with Bezos' money along with contributions from friends and family. In 1995, Bezos raised nearly $1M in small checks from 20 local angels with a typical check size between $30k and $50k. Among those angels, Nick Hanauer, Eric Dillon, and Tom Alberg (of Madrona Venture Group) were brought on as company advisors.
The rise of e-commerce over the last 10 years or so has forced retailers to adapt to the changes demanded by consumers. E-commerce growth continues to accelerate and outpace growth in the brick-and-mortar channel, and online sales accounted for almost 20% of total US sales this holiday season, based on preliminary estimates. In addition, department stores have offered discounts and promotions as a key tool to drive demand and bring consumers into stores. Over time, this strategy can dilute a store's brand and leave stores looking picked through. Also, it trains consumers to wait for discounts instead of buying products at full price. There has been a significant number of store closures in the last few years, and we expect that to accelerate in 2017 and in the following few years. As the department store channel shrinks, and more brands fight for less space, we think brands will need to be more creative, flexible and diversified in their approaches. One way brands can disrupt the more traditional wholesale channel without taking on the significant real estate risk that comes with opening their own stores is to open pop-up stores. With pop-ups, brands have complete creative control of the brand experience and how their messaging is communicated to consumers. They can tell the story they want to tell and explain in their own voice what the brand stands for. In some cases, brands use pop-ups more as an advertising tool than as a place to transact commerce. These kinds of pop-ups usually offer some kind of special experience to draw consumers into the store. Pop-ups can also be set up in locations other than malls, allowing brands to reach their target customers where they are. Retailers and brands can also use pop-ups to test the waters in the most expensive shopping areas, often at discounted rents, while landlords can use the temporary stores to show off the space to prospective long-term tenants. Mall operators are receptive to pop-ups, as they bring something new and unique to consumers. Real estate firm Related Companies has used pop-up shops at the Time Warner Center in New York City to provide a fresh feel and add variety for consumers.