Retail Transformation

Hands holding plastic credit card and using laptop. woman using laptop in home. using laptop internet.

Since the early days of the Internet, pre-dot.com crash, web sites for online shopping have been available. Early Internet users were reluctant to type in their credit card information, but over the last few years online shopping is really taking off. Not only is this format of shopping becoming common but it is kind of expected. Retailers that don’t have at least an online presence are at risk. Retail is transforming and store owners need to adapt.

Over the Thanksgiving holiday season in the US in November 2016, more people shopped online than in retail stores. According to CNBC, the National Retail Federation in the US reports that more than 108 million purchased electronically, while only 99.1 million bought in stores. In 2015, approximately 103 million shopped online while 102 million bought in-stores. Link.

Statista reports increase in online shopping, with most of the increase in using a smartphone to shop.

Infographic: Thanksgiving Weekend E-Commerce Roundup | Statista

There are some factors that are attributing to these trends. Of course, people are more digital today and expect services to be online. And there are more shoppers with access either with computers or smartphones. There are also other factors, One is trust. More people are trusting e-commerce sites because they simply work well, they are convenient, safe and secure. In the early Internet, the last thing many people would do was to put their payment information on some Internet web site they had never heard of. Web sites are getting better with good product description and fast and easy way to check out the products.

Not surprisingly, it turns out that people who make an order and get their products within the same day at a specified time, will order again much sooner than those who get their stuff at an unknown time in the next couple of days. With better logistics management of delivery services, getting products to consumers is becoming faster and easier – this is the Uber effect. Delivery is controlled by real-time software.

Having an online presence – a web site, not just a simple Facebook page, is becoming vital to small store owners if they want to compete with online giants like Amazon or now Walmart. According to MineWise 81% of shoppers do research online before making a purchase decision. Link. The digital natives will first grab their phone if they want something. And if it is not there – it doesn’t exist anyways.

Retailers that serve a local market need not be at risk. They should adopt an offline/online strategy (sometimes called O2O or offline to online or the other way around) and view their store as an online store with a physical showroom. Customers will find them online and this has been shown to drive customers to their local store. However, retailers that emphasise aesthetic approach to store design are able to give customers better experience. Customers will come because they like the experience. And that is something that the global Amazons of the this world cannot easily compete with.

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Ten years of iPhone

There is a saying in classical music history that there are three periods of classical music. Before Beethoven, Beethoven, and after Beethoven. Using that analogy we could say there are three periods of mobile phone history. Before the iPhone, the iPhone, and after the iPhone. Ten years ago, on the 9th of January 2007, Steve Jobs introduced this new generation of smartphones and the mobile phone industry was never the same.

Prior to the Jobs’ announcement, there had been speculation and rumours that Apple was going to introduce a phone. Having made the iPod Touch, people wondered why not add phone functionality.  When Steve Jobs introduced the iPhone in his famous 2007 presentation, it was inevitable that the world of mobile phones was changing. The presentation by Jobs that morning in San Francisco was one of his greatest. After introducing three products, a widescreen iPod with touch controls, a revolutionary phone and a breakthrough Internet communicator, Jobs went on and said: “These are not three separate devices. This is one device. And we are calling it iPhone. Today Apple is going to reinvent the phone.”

He was right. Apple did reinvent the phone. The mobile phone was taken to a new level. The whole telecommunication industry went into shock and rushed to bring touch screen phones to the market. To complicate things, the mobile industry had their gala conference, Mobile World Congress, in February, only weeks away. As it takes 12-18 months to make a new model, there obviously was no time. So, in panic many mobile phone makers rushed to create concept phones using visual aids.

Today, there are some signs that the glory days of iPhone are behind us. With the new iPhone 7 released in September 2016, the improvements were marginal. The seven was better but no major breakthrough that would cause iPhone 6 users to rush to the store.

Infographic: The iPhone Still is Apple’s Cash Cow Despite Declining Sales | Statista
You will find more statistics at Statista

Technology evolves in waves. Each wave has slow growth, rapid growth, levelling off, and finally stagnation.

As the smartphone wave is ending the smartphone has never been more important, as the next wave will be built on the smartphone wave.

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Technology in 2016

The year 2016 may at first sight, not go down in history as the most eventful year in technology but in my mind it was a very interesting year of many emerging technologies. It was like a confirmation of a world that is going to be transformed. I guess 2016 was the year of the building blocks. Here are few points on the state of some interesting technologies at the end of 2016.

If one single thing deserves to be named a hit in 2016, it must be augmented reality smartphone app Pokémon GO. This can hardly be considered a breakthrough technology but for some reason it managed to catch people’s attention. This craze caused all sorts of situations where people would wander around to find Pokémon creatures. Groups of people could be seen behaving weirdly in public places. Some pointed out the health benefits of people running around, while other pointed to safety hazards, for example when people drove around catching Pokémons. For Nintendo, the maker of the game, the financial benefits were good. The stock soared and the company became more valuable than Sony.

As for the most fun hardware device of the year, I would say Snap Spectacles. These are colourful sunglasses with a camera. The interesting thing about this wearable is that they are sold in vending machines that are not so widespread and published, which adds a mystery element. The scarcity of the Snap Spectacles makes them sought after items.

Other, perhaps more anticipated devices in 2016, were the Virtual Reality (VR) headsets. New headsets came to market like Oculus Rift, HTC Hive, and Sony Playstation VR to name a few. Many games were released and many game studios are turning to VR. Still, we are in the early stages of this technical wave (see article Through the VR desert). VR is mostly associated with games, which is understandable. However, VR has huge implication in other fields. Enterprise VR is just about taking off, helping businesses do a better job. We can expect to see applications in architecture and design, real estate, medicine, education, and manufacturing.

Video was also very important in the passing year. On Facebook alone, there are around 100 million hours of videos watched every day. The year saw more widespread use of 360 degree videos where you can change the picture by moving your smartphone or tablet. For desktops, the mouse can be used to swing the view point. The BBC technology show Click, aired an whole episode shot in 360 format. This format has be called the “gateway drug” to VR. What is driving this is the dropping cost in cameras.

The year 2016 marks the end of the Smartphone era that started in 2009 (see article Long Live the Smartphone). Over the past few years, new features and improvements made people switch phones every one or two years. But now with Apple 7 released in September 2016, the new phone was incremental. Sure it was better and faster, but not the same rate of improvement as earlier in the wave. However, that did not stop the Fanboys from waiting in line, again.

The Samsung Galaxy Note 7 smartphone released in August 2016 got even more press, but for a reason they might not have liked. The phone had a battery fault and could explode. Companies started to ban the phone in their offices and they were banned on public transport and on airplanes. Samsung had to recall the phones. The whole fiasco will cost the company billions.

The year 2016 also saw developments in voice assistant devices. Amazon released Echo a couple of years ago and this year Google added Home. These devices sit in your home and listen to everything you say and, when asked or directed, they will answer or respond to your requests. Common tasks are playing music, changing lights, and just answering questions. Amazon is expected to sell 5.2 million units in 2016, up from 2.4 million in 2015. The strategy of offering a voice assistant like Alexa may be devilishly cleaver since, according to Business Insider, Echo owners increased their spending on Amazon by 10% after buying the device.

Having a device like this in your house might sound creepy and it is. TechCrunch reports that the police in Bentonville, Arkansas, are asking for data from an Echo device to help solve a murder. At least, the advice is to not plan or commit any crimes while the device is active. I guess the same goes with cheating on your spouse.

Alexa and Home are just one application of AI, artificial intelligence (see article AI is the New Electricity). The year 2016 was the year AI became recognised as really working. Finally after 60 years of hopes and disappointments, interesting solutions are finding their way into everyday services. This was the year DeepMind’s AlphaGO won the Go match with Lee Sedol. The important trend is that the tech giants like Amazon, Microsoft, Google and IBM, are offering services to build AI products. This means that startups have access to enormous computing capabilities without substantial investment. We can expect more AI to enter applications in the coming years.

Of course there are other building blocks, like the Internet of Things, Blockchain, robotics, and drones to name a few, that also advanced during the year. All of these building blocks are ready for innovators to take and use to build new technologies. The 2017 and beyond should be interesting.

 

 

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