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The Future of Retail Checkout: No Checkout at All?

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“People have said when checkout is working really well, it will feel like stealing. You grab a pair of shoes and you just walk out.” That’s how Michael Chui, a partner at the McKinsey Global Institute, describes the retail-checkout experience in your not-too-distant future.

This coming transformation in the way you pay for items in bricks-and-mortar stores will occur through a network of sensors placed strategically around stores, which will enable retailers to recognize you (through your smartphone or other devices) when you walk through the door. Inexpensive sensors also will be attached to (or embedded in) items available for purchase. And the stores will already have your preferred payment information on file, so when you exit the store with your chosen merchandise, you’ll simply be billed automatically, totally skipping any traditional checkout experience.

Many restaurants are already in the vanguard of transforming the checkout experience. As Alexis Madrigal explained two years ago here, a growing number of restaurants are using iPads or other tablets to have diners place their own orders and then check themselves out at the end of the meal. If such a change becomes widespread, as Madrigal pointed out, the implications for waitstaff employment will be profound.

Retail stores are heading in that direction too. According to M.V. Greene, writing inStores, a trade magazine for retailers:

The “Internet of Things,” where objects in the physical world are connected to electronic virtual networks, is poised to turn retail on its head. Not since the introduction of online shopping – and before that credit and debit cards for purchasing – has something in retail had the potential to be so transformative.

Usually, when we think of “transformative” changes, we’re talking about things most people didn’t even anticipate coming at the time: examples include the radio, the atomic bomb, the Internet. But this coming change in our retail experience is, I would guess, something that many people wouldn’t find all that surprising. After all, the history of retail shopping is one of task-shifting.

In the last century, the big change in retail checkout came by having the customer do more of the work. In the original model of, say, the grocery store, a person went into a general store, where the owner or clerk stood behind a counter and retrieved items the customer wanted from behind-counter shelves, then packaged those items and billed the customer or accepted payment. But that retail model was gradually replaced by the “supermarket” model, which put products out on customer-accessible shelves. Now, the customer did the work of selecting items he or she wanted and taking them to a cashier for payment. Efficiencies galore.

More recently, efficiencies have built on that model of having the customer do more of the work, now augmented by technology. For example, a growing number of grocery chains have “intelligent” carts that can total up items as a customer moves through the store, tracking movement and making recommendations. And in many stores, especially grocery and drug-store chains, customers can use self-checkout kiosks. In Apple stores, for a couple of years already, you’ve been able to buy off-the-shelf items using an app on your smartphone and walk out of the store with your merchandise, having never interacted with a salesperson.

But just because the coming changes in retail checkout aren’t beyond our imagining doesn’t mean that they’re unimportant. For one thing, they’re likely to have profound effects on retail employment. In fact, according to data from The Economist, retail workers are among those whose jobs are most likely to be displaced by digital or computer-related technologies in the next 20 years. (I should note that the U.S. Bureau of Labor Statistics holds a different view, projecting that growth in the number of retail-sales jobs is likely to hold steady—at about 10 percent—over the next decade. Your guess as to who is right may be better than mine, but I’m putting my money with the folks at The Economist.)

Apart from employment concerns, the vision of a digitally-automated retail future provokes unease about privacy issues. As M.V. Greene notes, “a major hurdle for brands and retailers is to gain the trust of consumers when their personal data is flying back and forth in real-time across networks.” Greene quotes David Dorf, a Senior Director of Technology Strategy at Oracle Retail, who says retailers have to be worried about a “creepiness factor” related to the privacy of consumer data.

Dorf advises merchants to avoid a “stalker” configuration as they deploy these new technologies and adopt a “butler” configuration instead. “The stalker wants something from you and typically is trying to get as much information as possible and wanting to directly impact you.” By contrast, “The butler is kind of always in the background, always helping you, pointing things out that might be of interest, trying to make your life easier.”

“If retailers can focus on this butler mentality,” Dorf predicts, “the Internet of Things has a lot of potential to make the customer experience more rich and engaging, and loyalty will ensue.”

It’s oddly reminiscent of another Internet-enabled butler, the early search engineAsk Jeeves. It could take a few years, but we may soon see how a Jeeves-like digital figure fares in the brick-and-mortar world.

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This post originally appeared on TheAtlantic.com

 



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The Entire Known Universe at Your Fingertips

An old friend sent me this today. Pretty amazing.

The entire known universe to scale, at your control, on your mouse or track pad, for your perusal.

 http://htwins.net/scale2/scale2.swf?bordercolor=white

May take a moment to load… hit Start… then slide the button at the bottom of screen (or use the mouse wheel). You can click on any item about which you want more information.


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Bad Apple

I've always been a big fan of Apple's products.  I don't have or want the stupid iPad, but I think very highly of Apple computers, and when I decided to buy a smartphone I went with the iPhone.  But I haven't upgraded to the iPhone 4 and don't intend to until Apple clearly has solved all the problems with it.  Apple's idiotic reaction to those problems is creating a massive PR problem for the company.  This article highlights the issue nicely.  Bad, Apple.


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Digital File Cabinet

I’m still knee-deep in work and unable to attend to things I’d love to blog about — the Supreme Court’s outrageous decision on campaign finance, and Obama’s tardy conversion to populism, the MA election (yes, more to be said on that!).  But I will get to these and other topics soon.

Meanwhile, a quick note about another matter.  I got up at 5:00 this morning to work.  After making coffee, I thought I’d just spend a few minutes catching up with some newspapers I hadn’t gotten to this week.  One of the things I look forward to reading each week is Walter Mossberg’s “Personal Technology” column in the Thursday edition of the Wall Street Journal.  He devoted his column this week to a fabulous “hybrid computing” program/website (he explains the term in his column) called Evernote.   I read the column, went to Evernote‘s website, and then lost an hour exploring its possibilities, setting up an account (free!), downloading the free iPhone app, etc.  

Evernote is a fabulous tool that I expect will be something I come to depend on every day.  Explore it for yourself.  I expect you’ll be glad you did.

I lost an hour of work this morning, but I’ve already “clipped to Evernote” a number of items I want to blog about later when I have time.  More on all that when I resurface. 


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Help with Converter Box

As you may have read, Joe the Plumber of recent campaign fame (a.k.a., Joe Wurzelbacher) has recently signed on with an online retailer of converter boxes to do a series of educational videos to inform TV watchers about what the upcoming transition to all-digital is all about, how to hook up an old analog television to a converter box, and how to get a government-sponsored coupon to help buy a box.

Well, here's a sense of how such videos might go down on the receiving end — that is, with the largely elderly population (see end of post below about red wine's benefits) that will have to deal with this problem.

From Spike Feresten's "Talk Show" via Bob Cesca.


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Videoconferencing

Videoconferencing
Tuesday’s New York Times carried an interesting article by Steve Lohr about the growing use of videoconferencing (otherwise known as telepresence) as a replacement for business travel to meetings and conferences.  Lohr writes:

As travel costs rise and airlines cut service, companies large and small  are rethinking the face-to-face meeting — and business travel
as well. At the same time, the technology has matured to the point
where it is often practical, affordable and more productive to move
digital bits instead of bodies.

The cost of these telepresence rooms (around $500,000) is probably too high for most companies to build them, except for those firms whose employees spend a lot of time and money traveling to other cities to see their own company’s employees in other places.

But there should be an emerging market for companies to step in and build these rooms in every city, providing a priced-per-visit use to firms that want to avoid the high cost of travel — not only in terms of airline and hotel costs but also the human costs of fatigue and burnout.

My wife — you all know my road-warrior wife, Sue — travels extensively.  I would really be happy if some entrepreneur would make it possible for her to do less of it and stay in Boston more.

Get on it, you people!