At the moment I’m writing this, retailers, technology solutions providers, consultants, pundits, analysts, and the press, are all prepping for the annual trek to New York City to attend the National Retail Federation’s 2017 edition of its “Big Show “. There isn’t anything in the U.S. quite like it. Unlike events such as CES, Oracle’s Openworld, Salesforce’s Dreamforce, and the SAP User Group’s SAPPHIRE, this one is focused exclusively on the Retail industry, the NRF’s constituent group. And without getting into all the numbers, let’s just says the Big Show is BIG, filling the entire Javitts Center for a few days in the coldest month of the year and America’s most expensive city. Still we go.

After each event, we get asked a lot about “what did you see? “, and we invite you to join in on our webinar later this month to get an answer to that question. But to get predictive, here’s what I expect to see: a lot of Virtual Reality, Artificial (or Augmented) Intelligence, and Internet-of-Things technologies and applications.

On the Near Horizon: IoT

Let’s start with the last one first. Internet of Things (IoT) technologies are finding utility in the retail space, after several years of percolating. There are several reasons I can think of as to why IoT hasn’t taken off before now, but one explanation might be that retailers have been too busy trying to catch up to consumers’ new shopping behavior of using both the digital and physical shopping channels together to choose the best path to purchase for any particular need. That new behavior has challenged retailers to integrate the shopping channels into one shopping environment – work that is still ongoing and is by no means completed.

Nonetheless, IoT is inching towards viable use cases that may finally justify the investments necessary to make it work. RSR’s most recent study on IoT (The Internet Of Things In Retail: Getting Beyond The Hype, October 2016) outlined three general areas of interest for retailers: inventory visibility and accuracy, interacting with digitally enabled consumers in the physical store, and making the physical store more effective for consumers. All three of these are essential to get right in an age when consumer expectations of the physical selling environment are based on their digital shopping experiences. Within those contexts, retailers view a laundry list of technologies as part of IoT, including:

• Automotive tracking systems,
• Temperature sensors,
• Container RFID tags,
• Infrared sensors,
• Item-level RFID tags,
• Employee identifiers (badges, etc),
• In home ordering devices (Amazon Echo, Dash buttons),
• Magnetic EAS tags,
• Video cameras,
• Barcode scanners,
• and (last but not least) Consumer-owned smart mobile devices.

I expect we’ll see demonstrations to all of those technologies on the Expo floor at the 2017 Big Show. The buzz is certainly there: for example, Amazon’s announcement of its Amazon Go! concept store in December triggered the stock price of one IoT technology provider, Impinj, to jump on the mere rumor of its involvement with Amazon.

Happening Right Now: Artificial/Augmented Intelligence

I covered IBM’s 2016 World Of Watson event in a November 2016 Retail Paradox Weekly column, recapping how CEO Ginny Rometty described the Watson AI technology’s positioning as an embedded service that can augment human intelligence in virtually any endeavor. IBM refers to Watson as “augmented intelligence ” rather than “artificial intelligence ” – according to Rometty, IBM’s intention is to enable “man and machine “, not “man vs. machine “. For example, In June 2016 IBM announced Watson Ads, a new offering from the IBM company The Weather Company that makes it possible for consumers to engage in two-way conversations through the ad, with Watson cognitive services listening in. The way it works is that as the consumer’s natural language is “ingested ” as data, and then Watson makes sense of the question being asked and offers advice.

But IBM isn’t the only company working towards AI applications for retail. For example, Microsoft is developing AI capabilities to help retailers deliver tailored experiences to consumers. Salesforce is reportedly working on AI capabilities to help fuel its CRM capabilities. SAP is developing AI “bots ” powered by HANA to enhance consumers’ digital shopping experiences too.

Retailers need to check these things out! E-Retail giant Amazon already offers an “Interesting Finds ” capability that tailors what you see based on AI technology that tunes the choices to your preferences, essentially making the website kind of a digital shopping assistant. And some retailers are using AI on their website’s “chat ” widgets to help you find just the right gift, while others are using AI technologies to make their customer call centers an enjoyable experience.

All of this isn’t future tense – it’s happening now in the marketplace. AI enabled capabilities should be on display at this year’s NRF event, and I look forward to seeing what’s out there, ready now for retailers to take advantage of.

Much More Than A Toy: Virtual Reality

We’ve all seen news stories and ads about virtual reality (VR) for consumers. My personal favorite ad is from Oculus Rift, which demonstrates the perils of getting too wrapped up in a virtual experience. But VR is finding its way into the enterprise in some useful ways. For example, 5^th Dimension (now part of the Symphony GOLD portfolio of products) offers VR to enable retailers to test store concepts in the virtual world before spending time and money in real stores.

Of course, VR techs will also find their way onto the selling floor, so that consumers can experience products before buying them. For example, Toronto based company Modiface has developed a related “Augmented Reality ” technology to enable consumers to see the effects of a product on themselves.

I suspect that VR and AR technology applications will be on prominent display at NRF 2017, and if I can get past my concern about being too goofy in public, I’m pretty sure I’ll give them a try!

The Challenge For Retailers

New applications of IoT, AI, and VR/AR technologies for retail are exploding onto the scene as the price/performance of those technologies improves. The challenge for retailers is that they represent the next generation of capabilities, and although they are available now for trailblazers to work with, most retailers continue to struggle to implement the last wave of next-gen technologies – things like advanced analytics of new non-tranactional data, near-realtime visibility into critical corporate data such as inventory availability, mobile enablement of enterprise apps, and integration of the digital and physical selling environments to a harmonious experience for consumers. The problem is that virtually every technology involved in delivering those corporate capabilities already has its parallel in consumer lives. That means that the required speed of adoption is determined not by enterprises, but by consumers.

It’s just the same for IoT, AI, and VR/AR. To the extent that these play in both the consumer-facing space and in the enterprise, if it exists for them, consumers will expect them to “be there ” in the enterprise too. But if there’s any one thing that RSR’s research continues to expose, it’s that retailers are moving too slowly to find the practical use cases that justify the expense of moving towards the new technologies that consumers are already using in their daily lives.

And that becomes a challenge for all the technology vendors that will be presenting at NRF, because they will need to show retailers something more than flashy new capabilities. They will also have to show them how those flashy capabilities create more value than cost.

And that’s what expect (or at least hope) to see at this year’s NRF Big Show.