Retail Executive

SEP-OCT 2017

Retail Executive is the trusted advisor to top retail executives from the industry’s most profitable retailers. We help retail executives succeed in their job role and grow their business via exclusive, actionable, peer-driven content.

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The Next Wave Of Automation Retail leaders who embrace how automation will impact the industry in the next five years will position their companies for long-term success. S T E V E B R O W N CEO, Baldfuturist.com ery business process. A good approach is to look at each business process and break it down into the tasks best done by a human, the tasks best done by an algorithm, and the tasks best done by a robot. Think of it as building teams that include humans, algorithms, and robots, all working side-by-side. For example, a smart fitting room can sense which gar- ments a customer has decided to try on using RFID, then look up information on a customer by identifying their phone with a Wi-Fi hotspot. Analytics can use a "goes with" database to recommend accessories and other garments that might look good with items the customer is trying. After checking to see the items are in stock, the algorithm pushes a pick list to the store associate, mapping the items on a store map using the planogram. The store associate quickly picks the items and brings them to the fitting room. This approach maintains the humanity in the brand, but augments the rich alphabet soup of technologies will change the way businesses operate: AI, IoT, AR, and 5G (fifth-generation wireless) will combine with advanced sensing, robotics, and analytics to automate or semiautomate most busi- ness processes. Retail leaders who embrace this next wave of automation will position their companies for long-term success. Those who avoid it risk decline and irrelevance. Automation is coming in many forms. Following are four different ways automation will show up in retail within the next five years. 1. ARTIFICIAL INTELLIGENCE REPLACES THE GUT Many jobs today require a human being with relevant experience and skills to make a set of decisions. Retail examples include designing a store planogram, picking next year's fashions, or laying out an advertisement. Peo- ple in these roles use their training, experience, and judg- ment to make decisions they hope will optimize business results. Often, they use their gut, calling on wisdom they can't quite explain. They might call it intuition. That's going to change in the next decade. Artificial intel- ligence (AI) algorithms are improving at a rapid rate. Tasks that formerly relied on the guts of humans (who were judged successful if they were right perhaps 50 percent of the time) are potential candidates for AI to take over. 2. SEMIAUTOMATING BUSINESS PROCESS The Internet of Things (IoT) is perhaps an overused and overhyped term, but it will have profound implications for every business in the near- to medium-term. Smart retailers will embrace IoT as a way to semiautomate ev- A As a futurist, I spend a lot of time thinking about how businesses will be trans- formed with new technology. No business, including retail businesses, is immune from the next big wave of automation. And that wave is hitting right now. Embracing IoT requires a totally new labor strategy. It's time for HR and IT departments to become best friends. S T E V E B R O W N B A L D F U T U R I S T. C O M AUTOMATION Innovation By S. Brown THE NEXT WAVE OF AUTOMATION RETAILEXECUTIVE.COM SEPTEMBER/OCTOBER 2017 30

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