With the much-anticipated launch of its convenience store Amazon Go, the e-commerce giant seemingly ushered in the next big trend in retail: the absence of cash registers and the people needed to work them. In fact, there's already a startup called AiFi working on the technology--which involves artificial intelligence, cameras, and sensors--to allow any retailer to convert its shops into "grab and go" operations in which customers simply take items from shelves and leave.
But cash register-less stores is only one part of where retail is heading in the future. And, for the record, that trend won't be going mainstream anytime soon. Even Amazon plans only to roll out up to six Amazon Go stores this year. David Marcotte, senior vice president of retail insights at Kantar Consulting, points out that the technology still costs a lot of money, not everyone uses mobile payments in the U.S., and to be successful these stores typically must be located in upscale neighborhoods. (Amazon Go is in Seattle, and AiFi plans on launching stores in San Francisco and New York City.)
But there are plenty of other changes happening in retail. Here are four other predictions you're likely to see a whole lot sooner.
Stores That Watch You
From smartphone apps to loyalty programs, stores are already tracking many of their customers' moves. Marcotte says the new trend is using video cameras and sensors installed in stores that will even track things like when you pick up an item from the shelf--but don't necessarily purchase it. Motion sensing is a more nuanced way of collecting data on consumers' buying habits--and that's what retailers are hoping to get their hands on.
With the U.S. Department of Energy as a lead investor, the Milwaukee-based startup Scanalytics is working on this technology, using sensor tiles that track people's movements around the store. The data collected can help stores better understand customers' traffic flow and better adjust where to place products in the store.
Micro Fulfillment Warehouses
Already, eight in 10 Americans are online shoppers, according to a 2016 Pew Research Center report. That is a major reason why department stores have continued to decline, says Zoe Leavitt, CB Insights senior retail analyst. She says companies that need to store inventory and cut costs increasingly will set up micro warehouses in urban areas--managed by robots--that will support cheaper real estate costs and allow for one-hour delivery service. The San Francisco-based startup Darkstore is working on expanding fulfillment centers to serve just that need. Darkstore, which works with companies like Uber and Postmates, has more than 40 urban fulfillment warehouses all over the U.S. Leavitt says that because moving products around in a warehouse is more of a labor-intensive task, the industry will likely automate it sooner than it will the work of cashiers.
Smart Home Tech That Brings Retail to You
Amazon's recent estimated $1 billion acquisition of Ring, a startup that makes doorbells with smart cameras, is in line with the trend of retail integrating more with smart home technology. Walmart made a similar move, teaming up with smart lock company August Home last September, so a delivery person can enter customers' homes to drop off packages. Integrating online shopping with offline pickup and delivery will only become more common, says Anindya Ghose, director of NYU Stern's master of business analytics program and author of TAP: Unlocking the Mobile Economy, in an email to Inc. Retailers will have more personal data on consumer preferences from observing their behavior in a very personal setting.
A Rough Road Ahead for Indie Retailers
The battle between Goliath retailers and independent brands has been under way for a while. But with companies like Amazon and Walmart only expanding their reach, Leavitt predicts indie brands will start to struggle to sell their own products directly to consumers. For instance, Walmart acquired the ModCloth clothing site for women and the Bonobos men's apparel label. She says that individual brands don't know their customers as well as Walmart or Amazon--giving giant retailers that hold vast amounts of customer data a huge advantage. "Since the customer data is so important, you don't want to outsource your distribution anymore because anyone who distributes is the one who collects [the data]," she says. "You want to be putting your own product into the customer's hands."