E-commerce giant Amazon has been steadily expanding and this isn’t its first brick and mortar expansion. Physical stores can learn a lot from how Amazon is successfully bringing the digital experience into the physical realm. The new store “Amazon Go”, is all set to eliminate checkout lines and allow customers to shop at their convenience using a new mobile app.
The grocery shopping experience is more about finding the right product easily, at the right price and finishing the purchase seamlessly. There are a couple of technologies that have been put to work to get this advanced shopping structure in place. Amazon describes its technology as a combination of sensor fusion, computer vision, deep learning and AI. Let’s take a look at few of the technologies involved…
Artificial Intelligence: AI is the simulation of human intelligence processes by machines, especially computer systems. These processes include learning (the acquisition of information and rules for using the information), reasoning (using the rules to reach approximate or definite conclusions), and self-correction. Particular applications of AI include expert systems, speech recognition and machine vision.
Computer Vision: Computer vision is concerned with the automatic extraction, analysis and understanding of useful information from a single image or a sequence of images. It involves the development of a theoretical and algorithmic basis to achieve automatic visual understanding which in turn enables to automate tasks that the human visual system can do.
Deep Learning: Deep Learning is a subfield of machine learning concerned with algorithms inspired by the structure and function of the brain called artificial neural networks. It is already driving innovation at the cutting edge of artificial intelligence by enabling data scientists to crack a number of difficult cases which had proved challenging for decades. It helps in functions such as speech and image recognition, and natural language generation.
Sensor Fusion: Sensor fusion is the aggregation of data from multiple sensors to gain a more accurate picture of the sensors’ subject or environment than can be determined by any one sensor alone. This is being employed to detect the placement and movement of items on the shelf.
Bluetooth Network Technology: Bluetooth wireless technology is a short range communications technology intended to replace the cables connecting portable unit and maintaining high levels of security. It is used to send/stream audio, transfer data and broadcast information between devices, which enables the store to gain a widespread access to all the areas.
Combining these technologies with the shelf cameras, image recognition software, and weight sensors to interpret what items are on the shelves, the store can deduce who is taking items off the shelves in real-time.
This self driving grocery store is a fusion product of computer visioning , artificial intelligence, automated decision making and deep learning. The amalgamation has given rise to “Just Walk Out technology” which is intended to make customers happy with a checkout-free shopping experience.
Amazon’s incredibly groundbreaking Retail store has left many mouths wide open and many retail chains awestruck. Initially there were supermarket shelves, then came in barcode scanners, then self-checkout lines, then online shopping. Currently the trend is such that the grocery checkout counter is completely out of the picture. Retailers are being compelled to work on ways to streamline grocery shopping, using automation and robotics. And the competition to diminish the brick-and-mortar retail experience could heat up quickly.
How to stay ahead in this race?
The contradictory side is the “how” of the execution. According to a report on Geekwire,
“The top challenge for brick-and-mortar retailers will likely be the technology itself”
~Tom Caporaso, CEO of Clarus Commerce
The trick is to adopt and adapt Amazonian innovations that enhance your value proposition as a retailer. Retail CIO’s need to keep a check on the pilot development and determine how this technology could be implemented to meet the needs of their customer base. Retailers who want to get ahead in this technology race, need to create a huge impact on the entire retail supply chain, be it any industry, manufacturing, distribution or inventory management.
Unfortunately, traditional retailers are not really aware enough to identify accurately what customers value. In order to create that impact, retailers must have a hands-on experience on the cutting edge technologies currently trending. According to experts research, majority of them don’t have the technical know-how or the resources to create or install it themselves.
They should know how these technologies or other digitization efforts could enhance the customer’s life, experience, and transaction. To be able to do this they’ll need to rely on external firms to pursue a similar, completely in-house operation in their organization. This might seem to be unrealistic and cost-prohibitive for retailers, but those who are reluctant to evolve over the next decade will inevitably become less and less relevant to their ever-evolving customer base.
Gear-Up to Transform from Retailers to E-tailers
As per Gartner
“The competitive advantage traditional brick-and-mortar retailers have over online retailers (e.g., convenience of fulfillment) would be disrupted if Amazon’s Go stores prove to be successful.”
As the technology becomes more widespread , enterprises realize the need for transformation into a more digitized platform, providing the best of customer experience. The biggest value is created when multiple technologies are combined to drive real operational efficiency and a streamlined customer experience. The best “technology thing” you can do to match the pace of digital disruption is to invest in digital transformation consulting services that leverages technology creatively to solve some of the tough business problems. Such businesses and brands are geared towards enabling enterprises to innovate, build awesome products and transform customer experiences.
There are a plethora of technologies that these digital transformation companies are experimenting with, like using AI for making smart shopping lists, personalized offers based on the physical location and shopping behavior of customers, in-store navigation, and leveraging AR/VR for queue busting, among others. Amazon and newer e-commerce startups have pushed traditional grocers to incorporate more of these technologies into their customer experience. The Amazon Go concept represents a broad threat to the retail model as we know it, because it could combine the convenience of online with on-premises retail to possibly provide the best of both worlds. Retailers need to collaborate with marketing and customer insights leaders of digital transformation agencies to understand and learn from Amazon’s innovation, see what works, and implement their own digital programs accordingly. Brick-and-mortar retailers have the potential to not only to follow Amazon’s innovation, but build and perfect it to create an even better experience.
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