Tag Archives: internet of things

How the Fourth Industrial Revolution Shapes the Retail Industry

It seems to almost happen overnight, the Fourth Industrial Revolution. “Something’s coming. It’s picking up speed and will overtake most of us in the coming years. Industries will be disrupted, lifestyles will be altered, economics will be shattered as this revolution takes hold”, according to a press release by the Digital Journal.

The revolution started almost unnoticed, very quiet and extremely swiftly. It’s also clean, unlike the first industrial revolution that was noisy, dirty and very slowly – just imagine the coal gobbling steam engines, 3 centuries ago…

Don’t make any mistake. The 4th Industrial Revolution wouldn’t have happened without the 1st (coal); the 2nd (oil and electricity) and the 3rd (internet technology and clean energy) Industrial Revolutions.

However, the Fourth Industrial Revolution is busy happening right now and it’s having a profound effect on our businesses and our lives. Indeed, the Fourth Industrial Revolution and the future of core technology trend are expected to result in an all-new era of automated industries 1.

Also, the retail industry and its customers are already part and parcel of this revolution.

So what is the Fourth Industrial Revolution?

The internet and Information Communication Technology (ICT) have facilitated the advent of cyber-physical Internet-based systems.  These systems offer innovative capacities that can benefit industry and other economic sectors. This phenomenon is happening now and is known as the 4th Industrial Revolution.

The Fourth Industrial Revolution is a fusion of all current technologies to create a cyber-physical system 1.

Floridi 3 (2014) explains the 4th Industrial Revolution as a space where smart and autonomous agents no longer need to be human.  Therefore, a society that’s fully dependent on third-order technologies and thus are human-independent. Here, learned machines that communicate with each other, are taking over the thinking and doing of humans…

Or, as Oosthuizen 2 (2016) recently described it: “Consider the possibilities of mobile devices connecting billions of people driving unparalleled processing power, storage capabilities and access to knowledge. In addition, the overwhelming convergence of emergent technology such as, among others, artificial intelligence (AI), robotics, the internet of things (IoT), autonomous vehicles, 3D printing, nanotechnology, biotechnology, materials science, energy storage and quantum computing.”

The retail industry is one of the spaces in business that the 4th Industrial Revolution is seen working and it is experienced by many.

How the Fourth Industrial Revolution shapes the retail industry

The World Economic Forum 4 (2015) identified six software and services mega-trends which are shaping society:

People and the internet

How people connect with others, information and the world around them is being transformed through a combination of technologies. Wearable and implantable technologies will enhance people’s “digital presence”, allowing them to interact with objects and one another in new ways.

Bricks2Clicks recently discussed how the multi-purposed smartphones of customers that are AI empowered can help them to connect, communicate, recognize and experience the digital world of the 4th Industrial revolution.

Computing, communications and storage everywhere

The continued rapid decline in the size and cost of computing and connectivity technologies is driving an exponential growth in the potential to access and leverage the internet. This will lead to ubiquitous computing power being available, where everyone has access to a supercomputer in their pocket, with nearly unlimited storage capacity.

The use of the mobile smartphone has grown exponentially since its introduction a decade ago. In fact, just over 36 percent of the world’s population is projected to use a smartphone by 2018, up from about 10 percent in 2011, according to Statista. For retailers the growth in use of smartphones by their customers may result in opportunities and threats. Read more: Bricks and Mortar Retailers Need To Be Smart With Smartphone Customers.

The Internet of Things (IOT)

Smaller, cheaper and smarter sensors are being introduced – in homes, clothes and accessories, cities, transport and energy networks, as well as manufacturing processes.

“Connected devices and products provide retailers with the opportunity to help optimize operations in the face of a more complex supply chain. That’s  increasingly important for digital channels, and a more demanding customers.  By utilizing the IOT, managers can track inventory more easily, and adjusting pricing in real time using smart tags”, says Douw G Steyn (Bricks2Clicks).

Artificial intelligence (AI) and big data

Exponential digitization creates exponentially more data – about everything and everyone. In parallel, the sophistication of the problems software can address, and the ability for software to learn and evolve itself, is advancing rapidly. This is built on the rise of big data for decision-making, and the influence that AI and robotics are starting to have on decision-making and jobs.

Retailers will have to decide where and when Artificial Intelligence has the potential to replace human intelligence. Cost and scale will drive these decisions. Future decisions about AI by retailers will probably be about the ethics of using the technology and the effect it may have on society. Further reading: Artificial Intelligence – Digital Outcomes or Digital Disruptions for Retailers?

The sharing economy and distributed trust

The internet is driving a shift towards networks and platform-based social and economic models. As a result, assets can be shared, creating not just new efficiencies but also whole new business models and opportunities for social self-organization. The Blockchain, an emerging technology, replaces the need for third-party institutions to provide trust for financial, contract and voting activities.

Here we are talking about crypto-currencies such as Bitcoin. “There is the potential for a lot of demand for crypto-currencies from a consumer perspective. But right now it’s a pretty complex process to set up a digital wallet, gain access to a crypto-currency exchange, and start buying up coins”, according to Nikki Baird (Forbes).

The digitization of matter

Physical objects are “printed” from raw materials via additive, or 3D, printing, a process that transforms industrial manufacturing. Consequently it allows for printing products at home and creates a whole set of human health opportunities.

3D printing technology for retailers is now emerging as an outcome for small localized retailers that are facing closure. However, as it is with most disruptive technologies, the advantages that 3D printing offer for retailers should be weighed against its potential pitfalls. Read more: 3D Printing Technology for Retailers – An Opportunity or a Waste of Money?

Conclusion

The 4th Industrial Revolution is not only about digital technology and gadgets, but also about us. How should we prepare ourselves and our children to survive and prosper in this digital, robotic and information rich space? And what about retail? Not only need the structure, operations and organisational cultures change at retailers, but retailers also need extraordinary leaders (Read: Success in the Digital Age Requires Extraordinary Retail Leaders).

The last words are from Albert Einstein: “The distinction between the past, present and future is only a stubbornly persistent illusion.”

Notes

1 Chung, M. and Kim, J. 2016. The Internet Information and Technology Research Directions based on the Fourth Industrial Revolution, KSII Transactions on Internet & Information Systems, 10(3):1311-1320.

2 Oosthuizen, J.H. 2016. Entrepreneurial intelligence: expanding Schwab’s four-type intelligence proposition to meaningfully address the challenges of the fourth industrial revolution. In proceedings of 28th Annual Conference of the Southern African Institute of Management Scientists, University of Pretoria, South Africa.

3 Luciano Floridi 2014. The Fourth Revolution, How the Infosphere is Reshaping Human Reality, Oxford University Press, USA.

4 World Economic Forum 2015. Deep Shift: Technology Tipping Points and Societal Impact, Global Agenda Council on the Future of Software & Society, Survey Report, World Economic Forum, Geneva, Switzerland.

Images

c1.staticflickr.com and pixabay.com

The Dawn of Autonomous Cars, and the Demise of the Car Driving Experience

The phenomenon of fully autonomous cars has begun. “Self-driving cars without a human behind the wheel could run freely on UK roads from 2021, the chancellor is set to announce”, according to AutoCar. Unfortunately, by replacing human drivers with robot drivers, the end of a rather emotional relationship that we are having with cars, will begin.

Cars, for many people, are more than a just means to an end. “The type of car you drive tells a story about your personality. It may not be obvious, but people do share a lot of things in common with the cars they drive, and will choose a vehicle that represents their own particular talents and interests and reflect their values in life” suggests Joel Wong in TOC.

I wonder what autonomous cars can reveal about my personality?

Autonomous cars

Wikipedia defines an autonomous car (also known as a driver-less car, self-driving car, robotic car, autos) and unmanned ground vehicle, as a vehicle that is capable of sensing its environment and navigating without human input.

Just like us, self-driving cars need to have sensors to understand the world around them and a brain that collects, processes and chooses specific actions based on information gathered. Therefore, autonomous cars are fitted with advanced tools to gather information, including long-range radar, LIDAR, cameras, short/medium-range radar, and ultrasound (Chris Giarratana, ReadWrite.com).

The data collected are analysed and by using complex algorithms and digital maps, the autonomous car is steered clear of mishaps and hopefully reach the destination it was programmed for.

The use of autonomous cars can have the following advantages and disadvantages (Paul Goodman, AxleAddict):

ADVANTAGES

DISADVANTAGES

  •  No driver means more space and more entertainment;
  • No bad drivers, thus less road accidents;
  • Traffic could be coordinated more easily in urban areas to prevent long tailbacks at busy times;
  • Sensory technology could potentially perceive the environment better than human senses, seeing farther ahead, better in poor visibility, detecting smaller and more subtle obstacles, more reasons for less traffic accidents;
  • Speed limits could be increased to reflect the safer driving, shortening journey times;
  • There would be no need for drivers’ licenses or driving tests;
  • Autonomous cars could bring about a massive reduction in insurance premiums for car owners;
  • Efficient travel also means fuel savings, cutting costs.
  •  Driver-less cars would likely be out of the price range of most ordinary people;
  • Truck drivers and taxi drivers will lose their jobs, as autonomous vehicles take over;
  • A computer malfunction, even just a minor glitch, could cause worse crashes than anything that human error might bring about;
  • If the car crashes, without a driver, whose fault is it: Google/the software designer, or the owner of the vehicle?
  • Hackers getting into the vehicle’s software and controlling or affecting its operation would be a major security worry;
  • Reading human road signs is challenging for a robot;
  • How would the police interact with driver-less vehicles, especially in the case of accidents or crimes?

So, there are many pros and cons that we have to consider when we decide to buy autonomous cars. But sadly, there’s a lot that we will leave behind, like the feeling of driving a car…

Real cars and the joy of driving them

The ribbon of shimmering asphalt curved between the mountains of the Peloponnese and the azure Aegean, which glittered in the late afternoon sun. The engine of the Audi A3 growled – a satisfying, syrupy growl – as I pressed the accelerator. As the car started to shift, I realized in a moment of clarity that I was very, very happy

Pirelli & C


The nice feeling that you get when driving a car, as the narrative above of Pirelli & C suggests, may soon only be a faint memory because of autonomous cars. “Where’s the thrill?” asks Giancarlo Perlas in BenzInsider. He later proposes: “Self-driving systems will likely be optional at first, and mandatory later. By that time, the only way to feel the thrill of driving will be through VR simulators (that will become mainstream by the time) and casual games like the AllSlots’ Racing for Pinks.”

That’s scary – we’ll lose the sensation of driving a car because of robots doing it. And, wait for it – we then have to rely on robots to simulate the feeling of driving a car that we are craving for. It’s a strange place, this digitize world.

Cars and humans – like men and their horses…

A very long time ago, before cars and trains even, people had horses to get them from A to B. There were horses of all shape and sizes, most with an owner and many with a name. But it was how humans bonded with horses. “Both the horse and the human become attuned to each other’s physical and mental ways, thus developing the state of co-being” according to Horsetalk.co.nz. Then cars started replacing the horses.

“Car consumption is never simply about rational economic choices, but is as much about aesthetic, emotional and sensory responses to driving, as well as patterns of kinship, sociability, habitation and work” suggests Sheller, (2004). Sheller, in explaining the “feeling of cars” proposes that pleasure, fear, frustration, euphoria, pain, envy (i.e. emotional responses), to cars and feelings about driving are crucial to the personal investments people have in buying, driving, and dwelling with cars.

So, as previously with horses, humans did found a willing emotional partner in the form of their cars. And now the robot is starting to replace the car, and it is impacting on business. Viereckl, Ahlemann, Koster and Jursch (2015) had this to say about the ‘promise of autonomous driving’: “It’s a disruptive technology that will upend traditional auto industry structures, usher in new business models, and change the nature of the business. “

Concluding

It’s not easy to comprehend an emotional bond between robots and humans. Maybe it’s because robots can be learned to predict your behaviour. After all, who better than to ask Jeremy Clarkson for an opinion on autonomous cars: “I drove a car the other day which has a claim of autonomous capability and twice in the space of 50 miles on the M4 it made a mistake, a huge mistake, which could have resulted in death”, reported Holly Christodoulou, The Sun.

Like horses had to make way for cars, so will cars have to make way for autonomous cars. What a pity…

Read also: Retail and the Internet of Things

Notes:

Sheller, M., 2004. Automotive emotions: feeling the car, Theory, culture & society, 21(4-5):221-242.

Viereckl, R., Ahlemann, D., Koster, A. and Jursch, S. 2015. Connected Car Study 2015: Racing ahead with autonomous cars and digital innovation. Strategy& http://www. strategyand. pwc. com/reports/connected-car-2015-study

Image:

  1. Wikimedia

 

Retail and the Internet of Things

The Internet of Things (IOT) may be an opportunity for Bricks and Mortar retailers. The proliferation of connected devices coupled with less-expensive technology platforms can be used by retailers to get customers back into their shops…

Jonathan Gregory, Managing Director – Accenture Strategy says IOT offers retailers opportunities in three critical areas: customer experience, the supply chain, and new channels and revenue streams.

Before discussing the opportunities of IOT, we must first explain what IOT is.

What is the Internet of Things?

There are many complicated, high tech definitions for the IOT. However, Jacob Morgan contributing to Forbes puts it simply – IOT is the concept of connecting any device with an on/off switch to the internet (and/or to each other).

How many things can you think of that has an on/off switch? In your home – TV sets, air conditioners, lights, alarms, stoves, geysers, garage doors – the list is never ending. Now imagine connecting all these devices to your smartphone or, connecting them with each other.  And then connecting everything with other persons…

The IOT is a giant network of connected “things” (which also includes people).  Hence the relationship will be between people-people, people-things, and things-things, suggests Jacob Morgan.

Let’s get back to the opportunities that IOT render for retailers.

What opportunities do the Internet of Things offers retailers?

The author of this blog has previously mentioned the challenge that Bricks and Mortar retailers have to stay competitive in the digital economy (http://bricks2clicks.co.za/retailers-can-remain-competitive-turbulent-times/). How can the IOT help retailers with their activities?

Customer experience

The customers of retail are adopting digital devices at a staggering rate. They are eager users of smartphones, tablets and digital watches.  Digital devices make their lives easier, and they want the same experience from them in shops as what they get at home or at their workplaces.

“The digital transformation of retail is driven by customers” says Tony Stockil, CEO and Founder, Javelin Group. Most customers want to experience shopping as part of their entertainment.  Shopping is now a form of entertainment, available 24/7, wherever people are. Retailers therefore need to ensure that the brand experience is seamless and constant at all touch points.

James Wilson, Baiju Shah and Brian Whipple did an open-source analysis of IOT user behaviour (“How People Are Actually Using the Internet of Things”, HARVARD BUSINESS REVIEW, October 28, 2015). They found that consumers want an IOT that provides personalized services that can be adapted to different contexts.

The data show that the most heavily used IOT programs are ones that make home life easier, more distinctive, and more pleasant. According to the results, customers show a big preference for services that don’t require them to go out of their way to make something work.

The supply chain

Connected devices and products provide retailers with the opportunity to help optimize operations in the face of a more complex supply chain, increasingly important digital channels, and a more demanding customer.  By utilizing the IOT, managers can track inventory more easily, and adjusting pricing in real time using smart tags.

IOT allow small retailers operating an eCommerce channel to automate their warehouses. By upgrading to automate warehouse retailers will be able to process orders rapidly, accurately, and in real time says the OPEX Corporation. The upgrading may put retailer’s service and standards on par with the “big boys” in their retail sector. The cost benefits of a goods-to-person picking system are that it saving time and it is accurate. The system ensures getting the right product at the right time at the right place.

Automated warehouse system

Automated warehouse system

Creating new channels and revenue streams

The power of the IOT lies in the opportunities it presents to retailers to create new revenue streams or build entirely new channels. As such, household appliances, home security and comfort products, even health and wellness products are all becoming part of the IOT ecosystem.

Some retailers are taking further advantage of the wide array of connected products by becoming an integration “platform.” According to Jonathan Gregory, the idea behind these platforms is to make it easier for customers to make all of their in-home devices talk to one another.

Grocery retailers may partner with the suppliers of connected platforms that would give them  direct channel to customers. Subsequently  a potential gold mine of customer data can be created – information associated with almost every aspect of the household, from utility usage to consumption trends.

What are the dangers of the Internet of Things?

Jason Bloomberg, President of Intellyx writing in Wired, gives seven reasons he thinks the IOT is doomed:

  1. Security – with products and people connected, savvy hackers can easily access important information about you and the way you live.
  2. Privacy – it is about ‘Big Data’. Therefore, the more IOT you have, the more Big Data they collect, and the more Big Data they collect, the more they know about how you behave.
  3. Digital fatigue – too much social media, too many smartphones, too many YouTube videos to watch. There are also too many apps to download, too much of everything digital and wired and online.
  4. Ecosystems – with the IOT the battle is starting again to dominate this technology ecosystem. There are many dealers, both large and small,  trying to establish a foothold, hoping to create their own ecosystem.
  5. No Killer App – so far, the IOT has no Killer App. However, the Killer App could be just around the corner. They have a nasty habit of appearing on the market suddenly with no warning.
  6. Enterprises will mess things up – for an enterprise to succeed with the IOT or any other part of their Digital Transformation initiative, there are no shortcuts – only hard work.
  7. Rather put customers in control of the IOT – let the consumer control the security of each device. Let them determine what data the devices upload to the Big Companies.

Are you ready for the IOT?

Customers want IOT programs that make home life easier, more distinctive, and more pleasant. Also,  the IOT gives small retailers the technology to do their logistics more efficiently and cheaper.  Further offer the IOT retailers the opportunity to collect data from their customers at their homes and place of work.

There are however a couple points about the IOT that should be considered before using it:

  • Is the IOT system developed and secured enough to use without facing financial of legal liabilities?
  • Are you certain that by using the IOT it will be done ethically?

Lastly, let’s hope that the IOT will add value to both retailers and their customers not long from now…