Blog: Six Retail Tech Trends To Watch For 2019 That Go Beyond Competing Against Amazon – Forbes

Tech to compete against a disruptive Amazon will continue to be central to the retail play of 2019. But it isn’t the only thing driving what will makes retailers’ tech shopping list.

While you can expect to see more holographic 3D images at malls and stores to wow you, these six trends from last week’s National Retail Federation’s annual “Retail’s Big Show” will have a more lasting impact.

More cloud-connected machines, part of the IoT (Internet of things) buzz, are coming to stores.

As Starbucks baristas gave out free samples at a makeshift coffee station inside a Microsoft booth, screens behind them displayed data like how many cups the machines had brewed. This arrangement was no coincidence: Starbucks has teamed up with Microsoft to connect its coffee and other machines to the cloud via Microsoft’s Azure Sphere IoT system.

Why is this initiative relevant? When Starbucks introduces a drink recipe, it would now be able to remotely update all of its connected devices, a faster alternative to manually delivering a USB drive that’s inserted into the machine hardware before a barista can make that new espresso drink, for instance, a Microsoft spokesperson said at the booth. Starbucks also can instantly track and aggregate sales and other data and see what’s popular with consumers when and where.

Starbucks said the move also will give its employees more opportunity to engage with customers and can help with “beverage consistency, waste reduction, the management of energy consumption and predictive maintenance.”

“Starbucks has somewhere from 15 to 20 pieces of equipment in our stores,” Jeff Wile, a Starbucks senior vice president, said in a presentation at the trade show. “Every one of those [pieces of] equipment has to be managed and monitored and serviced…. If I can minimize just one maintenance effort a year and [cut] one time when a guy has to show up and service that machine, it pays for itself. And I’m getting all the data.  If I can go to Internet and push that [new] recipe, we can be faster and innovate faster.”

Wile admitted Starbucks has been late and didn’t start its “migration to the cloud” until about three years ago. But it has been working with its Seattle neighbor closely to change on it, with Microsoft embedding its engineers to help Starbucks with the transition, he said.

“What we are seeing [with retail industry] is the pace of transformation through the cloud,” Greg Jones, Microsoft’s head of business strategy for worldwide retail, said in an interview. Retailers “ask us to transform their business operation and co-create. The mentality has changed about customer experience in stores.”

Yes, Amazon Go is about to change the way we shop.

Amazon Go has received generally very positive consumer feedback, as detailed in this article, forcing the rest of the industry to play catch up. At the Intel booth, for instance, a cashierless store concept and a smart vending machine the chip giant developed with China’s e-commerce retailer JD.com for that market were showcased. A JD.com spokesperson said the company traveled to the show with the intention to explore licensing its cashierless technology to U.S. and other retailers.

Expect to see more retailers seeking to come up with their own Amazon Go like cashierless experience for you. Smart cart, smart vending machine, cashierless stores are among key showcases at #nrf19. https://t.co/cxHwQ8CvYT pic.twitter.com/TyENA2mFft

— Andria Cheng (@AndriaCheng) January 14, 2019

“We got traction after Amazon Go,” said Krishna Motukuri, CEO and cofounder of Zippin, which in August opened a 150-square-foot Amazon Go-like test store in San Francisco, where Amazon has two Go locations.

Motukuri, a serial entrepreneur and a former Amazon employee, told me that retailers started to take Zippin’s own cashierless technology more seriously after Amazon Go opened to the public last year. Zippin has signed up with “a few retailers” that will bring its cashierless technology live this year, he said, declining to specify which ones. “Checkout free shopping has arrived. We realized there’s a huge opportunity,” he said.

More robots will become fulfillment centers’ model employees.

With Amazon’s 100,000-plus robotic drive units a big part of its fulfillment-center secret sauce, rivals are eager to employ their own robots to help fulfill growing online orders faster.

Tompkins Robotics, for example, has introduced its own t-Sort robotic drive units that can sort individual items to help retailers cut the order processing time. Four of the top 15 U.S. retailers are its customers, Tompkins Robotics President Mike Futch said, declining also to specify. Some of its retail customers also are looking at deploying those robotic devices in the backrooms of their supercenters to fulfill same-day or next day delivery orders from stores. “We are growing tremendously,” Futch said.  “Some retailers have decades-old technology on a fixed- track big loop.”

To be sure, Tompkins’ robotic unit is different from Amazon’s, which has the ability to move and navigate entire shelf of a mix-match of products.

On shopping floors, drones join robots as new store employees.

2019 will continue to be the year when retailers seek to use technology to free store employees from menial tasks so they can spend time instead servicing customers. Retailers also want to use tech to help track what’s missing and misplaced on shelves and better keep inventory in stock. At the Intel booth for instance, Pensa Systems showcased drones that track store-shelf inventory for customers including beverage giant AB InBev.

“The retail shelf is like a black hole,” Pensa Systems president and CEO Richard Schwartz said.“There is no automation knowing what is on the shelve. We are trying to change that.”  

Meanwhile at Giant Food Stores, the supermarket chain this year will deploy a “googly-eyed” robot, which it named Marty, to all of its 172 stores after a successful pilot that had Marty inspect its floors to make sure there are no “hazards” like spills. “We want to free people to focus on customer engagement,” Nicholas Bertram, the chain’s president, said at an NRF talk. “This is the largest deployment of robotics in supermarkets.”

With increased online spending, delivering on experience when shoppers actually visit a brick-and-mortar store is more crucial than ever. Just ask Stacey Shulman, Intel retail solutions unit’s chief innovation officer: The question she told me she gets most from Intel’s retail customers? “What keeps my physical store relevant?”

Meet Marty! Giant Food Stores have announced a new robot assistant that will soon be rolling through all 172 stores. Marty’s job is to identify hazards, like spills and other problems that need action. pic.twitter.com/tmb3IMaY7A

— Brian Roche WGAL (@BrianRocheWGAL) January 14, 2019

Making the cost of returns less painful to stomach.

With increased global online sales also come increased returns, and retailers are seeking help to handle that process.

For instance, four-year-old ZigZag, which counts Topshop and Gap customers, has built a network of 200 warehouses in 130 countries to handle cross-border returns. That includes helping retailers grade the returned item’s quality, retag, relocate, bulk ship and resell products, said Patrick Eve, the company’s managing director.

What’s at stake isn’t just the cost and time returns take. For the fashion industry, the ability to turn around a return and resell it while in season could reduce the steep clearance risk later. And with more brands selling internationally, there’s the opportunity to sell a returned Topshop swimsuit in the winter in Europe by bulk shipping it with other items for sale to Topshop customers in Australia, for instance.

“The challenge for retailers is around fashion cycles,” Eve said. “You have a window of opportunity to get [returned] goods back to shelves.”

B-Stock, a liquidation marketplace platform for retailers including Amazon and Walmart, said in December that one out of every three people would return a holiday gift, translating to what it estimated would be $90-$95 billion worth of returns post holiday.

Your local store shelves are getting digital, and it’s not just about cutting paper tag costs.

While more retailers are looking to turning their shelves digital to save the time and paper tag costs on traditional price promotions updates, Kroger is working with Microsoft to give its digital shelves more bells and whistles. At two Kroger test stores, the shelves will connect with Kroger’s scan-and-go shopping app to guide customers through their shopping list. They can also flash lights to give employees visual cues to help them pick and fulfill curbside delivery orders quickly. Kroger also plans to turn its shelves into digital advertising space for CPG brands.

Kroger, through its own Sunrise Technology unit, has said it also is seeking to license its in-house built digital shelf and other technologies to even fellow rival retailers. 

“We want to commercialize to the retail world,” Peter Thelen, president of Kroger’s Sunrise Technologies, said in an interview. We are creating “automated platform to buy ad space on our shelves and working with CPG companies to reallocate their ad spending and help convert in-store spend with data.”

With Amazon—and fickle consumers—keeping retailers on their toes, thinking outside of the box for new growth opportunity will be the new industry norm.

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