Technology trends in retail for 2020. Part I: Automation & Big Data
Wpis dostępny jest także w języku: polski
Recently, our daily reality has been dominated by fears caused by the COVID-19 pandemic. The situation, however, will not last forever and still this year we will move from the crisis management phase of the sudden turn of events and careful monitoring of the epidemiological, economic and political forecasts, to a new but stable status quo. Bartłomiej Łatka, Sales Director at Euvic IT, writes about what technology has to offer in the retail segment in 2020.
A for Automation
Automation today affects every field of activity, including retail. When it comes to repetitive processes, robots prove to be cheaper and more accurate than human work. Hence, in commerce, robotics is used on at least three different fronts: automatic cash registers, logistics and process monitoring.
In Poland, automatic cash registers first appeared in grocery hypermarkets (e.g. Auchan) and DIY chains (e.g. Leroy Merlin). Initially, these served a small amount of traffic, and were supported by an employee supervising client’s honest behavior and assisting them when needed. The concept was quickly adopted, and other networks, including smaller formats, followed with mass installations.
In logistics, automation fairly seems to play an integral role – since on one hand we deal with high standardization (pallets, trucks, containers, wagons, warehouses; barcodes, labels, collectors) and on the other hand we need to synchronize processes between various entities (loading/unloading, document circulation, customs procedures, audit, etc.). A good example is the establishment of a company specializing in robotization of processes, by Rhenus Logistics – one of the largest logistics companies. Due to permanent staff shortages and rising labor costs, we can assume that this trend will intensify in the coming years, which is evidenced, among others, by the fact that swarms of moving robots is a common reality not only for Amazon, but also for the Pabianice company Lumileds.
Another automation field, increasingly present in the retail industry and related businesses (petrol stations, hotels, etc.) is monitoring automation. Market now seems to be hit in particular by two solutions: anti-fraud systems and monitoring of merchandising activities.
Why exactly these? Fraud is a serious problem and the level of revenue lost due to fraudsters, according to Sensormatic data, varies between 1 and 3% of turnover. Modern monitoring systems allow to identify and eliminate even up to half of the cases. The use of artificial intelligence (AI) allows to identify suspicious cases and automatically send reports to those responsible for preventing fraud, thanks to the parallel analysis of transaction data and records from CCTV cameras (to illustrate – on a network of 500 stores we are talking about 150,000 transactions per day and view from 2,500 cameras).
One of the better known implementations of this system was carried out by March Networks for the Dunkin ‘Donuts network. Automation has also found its place in store shelves’ monitoring. The implementation of Bossa Nova robots in the Walmart network enjoyed a great deal of attention. These robots drive along store shelves, scanning them with 15 cameras, and check for compliance with the planogram as well as verifie deficiencies on the shelfs to then notify warehouses. Another solution provided by Euvic IT is a stationary shelf scanner designed to monitor merchandising activities.
B for Big Data
Retail sector generates and collects gigantic amounts of data. Each POS equals up to tens of thousands of transactions per day, each visit to the e-store website is several thousand bytes of customer data, while each interaction with customer in social media is a potential start or result of sales process. Countless warehouse and logistics operations, payments, records from CCTV cameras, data from ERP, CRM, mobile applications – are all there to be associated and used all to build a competitive advantage.
The most important benefits of using Big Data by retail chains include:
- collecting and processing customer data, behavior, shopping preferences as well as segmenting this information in order to prepare effective marketing strategies;
- price optimization based on current and forecasted trends in the popularity of brands and product groups in connection with customer data, their location, shopping preferences and data on prices offered by competitors;
- ensuring an appropriate level of stocks through dynamic supply chain management based on the expected volume of quantitative sales of individual groups of goods or SKU positions in a specific period of time;
- improving the quality of services by collecting and analyzing feedback from customers on traditional channels and social media;
- optimizing the layout of goods on shelves by collecting information from cameras and motion sensors and modeling them in the form of customer behavior templates in the store.
Both Automation and Big Data are trends with great potential to dominate the retail world. You can read about the following two leading trends in the next article.
The author of the article is Bartłomiej Łatka, Sales Director at Euvic IT.