Published on: January 13, 2016
Content Guy's Note: The goal of "The Innovation Conversation" since we started it last year has been to explore some facet of the fast-changing, technology-driven retail landscape and how it affects businesses and consumers. It is, we think, fertile territory ... and one that Tom Furphy - a former Amazon executive, the originator of Amazon Fresh, and currently CEO and Managing Director of Consumer Equity Partners (CEP), a venture capital and venture development firm in Seattle, WA, that works with many top retailers and manufacturers - is uniquely positioned to address.
This week, we want to do something a little different ... and I'll let Tom explain.
Tom Furphy: Last week a team from CEP and Tadpole Ventures traveled to Las Vegas for the annual Consumer Electronics Show (CES). CES enables us to view first-hand the latest innovations in all things electronic and digital. We walk the show, often with our CPG and retail clients, with our eyes open for anything that might impact the future of marketing, consumer engagement and shopping.
The main themes we observed, some of which we’ve covered in past Innovation Conversations and will continue to cover into the future, include Internet of Things, Wearables for Connected/Quantified Self, Glass and Interactive Retail Displays, Virtual and Augmented Reality, Driverless Cars, 3D Printing and Drones. Each of these areas had dozens of companies exhibiting. While many of the technologies are still a little ahead of the market – unless you are the type that’s ready now for your refrigerator to take a picture of its contents to help you plan your shopping trip – it is a great place to observe the possibilities and open your mind to the practical business applications of these technologies.
We always bring college interns with us to provide them a great learning experience and to help us with logistics and information gathering. This year, we asked our three interns from the Class of 2016 at Babson College each to write about an innovation that they observed, that they feel will have a significant impact on marketing and/or shopping. The assignment was open-ended and designed to give us the fresh perspective of three young adults who are unencumbered with traditional business paradigms.
Here’s what we received...
From Kelsey Choi, of Braintree, Massachusetts, who is pursuing a BS degree in Business Management, with concentrations in IT Management and Technology, Entrepreneurship & Design (TED):
Augmented reality will have a significant impact on shopping and marketing. Today, companies like Sony are creating products such as augmented reality glasses that can be connected to devices such as phones or tablets for a variety of uses. The glasses look similar to sunglasses with a thicker frame as the technology and the augmented reality display on the lens are built into the sides of the frame.
This can be applied in the world of shopping. In the future, I can see this technology being used in grocery shopping, where a shopper can look at the grocery object or price label and see if there are promotions, basic allergy facts, nutrition facts of the shopper’s choosing. On the other end of this is the retailer. The retailer can use this technology to see stock levels in inventory and expiration dates through his or her glasses as he or she looks and walks down the warehouse without having to pull up a computer. If more details are needed, the retailer or shopper can look down at their connected smartphone or tablet to read additional information.
Augmented reality is a technology that can be applied over multiple industries but will have a significant impact in shopping. This will change the way product information is displayed and distributed to the customer and provide a new method of inventory management. Augmented reality can observe current habits and change the way shoppers and retailers behave. As the technology becomes further developed and accessible in the consumer market, it will be an important innovation for years to come.
Tom's POV: Like Kelsey, I agree that augmented and virtual reality will impact the future of retail and marketing. It enables the store shelf to go anywhere. The immersive experience advantage that brick and mortar has owned over online retailers will shrink. Will retailers take advantage of this? And Kelsey’s points on the potential impact to productivity on the store and/warehouse environment are quite intriguing.
From Laura Garza, of Monterrey, Mexico, who is pursuing a BS degree in Business Management; Concentration in Finance:
Traveling to Las Vegas for the 2016 Consumer Electronics Show was a unique learning experience. During the opening ceremony, Gary Shapiro, CEO of the Consumer Electronics Association, put a strong emphasis on the industry target of saving resources and enhancing connectivity between users and devices. It was interesting to observe how this target was approached differently through the innovation and creation of distinct products and technology and the impact that these will have on manufacturing and retail.
I found 3D printing to be specifically relevant given the fact that it addresses resource optimization and connectivity by expanding and facilitating the accessibility of products across multiple sectors. Mass customization is enabled because different products with different sizes and materials can now be produced from a single printer.
Body Systems was a prominent player in the show particularly because of its creative involvement in partnerships with companies pertaining to industries ranging from healthcare to fashion and food. Among them were partnerships with New Balance on the design of a 3D printed running shoe, PQ for a customized eye wear line, Invisalign for dental care, and the creation of the Culinary Lab and the ChefJet 3D food printer. These partnerships not only allowed Body Systems to expand its consumer base, but served as a marketing tool in which larger brands like New Balance and Invisalign promote and educate users on 3D printing.
Additionally, by encompassing multiple sectors, 3D printing is continuously changing the way that different products are created and delivered through the alleviation of labor and transaction costs. The effect on retail is evident because products can be produced at lower costs and delivered more effectively and in more optimal batches. It was incredible to see a concept that was once unheard of develop and continue to transform the dynamic of the workforce, manufacturing and retail on such a large scale.
Tom’s POV: 3D printing may be just the technological leap that will enable product customization on a mass scale. Don’t merely think of it as printing. The only similarity it has with printing is that it takes data from a computer and deploys material in a way that creates something. Where traditional printing is ink on paper, in the future it could be any number of materials or ingredients coming together to create something based upon a formula. Think 3D production instead of 3D printing.
From Jake Shaver, of Huntington Beach, California, who recently graduated with a BS degree in Business Management, with concentrations in Strategic Management and Economics:
One of the most exciting innovations (or rather, evolution of one) that I saw at CES 2016 was the advancements made in driverless technology. I see autonomous vehicles as having a huge impact on consumer spending given their potential to drive e-commerce.
With the driver no longer having to spend all of their attention on navigating their vehicle, this opens up a competition for the rider(s)’ attention. I believe this is why you see several large tech companies (Google and Apple, for example) diving into the space as riders will seek a new means of occupying their attention. Currently, the de-facto source will likely be internet related, given that millennials (arguably the first major demographic who will be purchasing when fully autonomous are ready) already spend nearly 18 hours a day online. Shopping is the number two most common online activity, so with an extra hour and a half per day (average time spent driving) available to browsing, it stands to reason that e-commerce will rise with the adoption of electric vehicles.
Tom’s POV: I have always felt that driverless vehicles were going to have a significant impact on eCommerce, but on the delivery side. Once you take the labor cost of a driver out of the equation, last-mile delivery becomes much more economical.
However, I had not thought about it from Jake’s perspective of the time that it will free up. When consumers open up an additional hour or more of their day to spend on their devices, it stands to reason that shopping across all categories will increase. In the food business, shoppers can solve the question of what’s for dinner tonight on their way home. They can order the solution, swing by and pick it up or have it delivered, whether it’s ingredients or complete meals.
Content Guy's Note: We will expand on all of these emerging and developing technologies in upcoming Innovation Conversations. Thanks to Kelsey, Laura and Jake for sharing their thoughts.
And, if any reader wants to get in touch with any of them, shoot me an email and I'll make that happen. They're really smart, and are worth getting connected to.
- KC's View: