Four Ways Technology Is Shaping The Future Of Transportation And Supply Chain

Thierry Morin

As mature and developing economies are looking to increase their competitiveness in the global supply chain through significant investments in infrastructure, Australia is currently examining how its “investment in the freight network can boost the nation’s prosperity and meet community expectations for safety, security, and environmental amenity.”

Working with leading businesses and public services organizations across the globe that either manage or oversee transportation and supply chain operations, SAP has been at the forefront of technology-driven change that drives better business outcomes.

Here are some examples:

  • Smart traffic management: To better manage enormous traffic volume (10,000 taxicabs, 7,000 buses, and 1 million private cars), the city of Nanjing, China, has implemented a smart traffic system that ingests and enriches continuous data streams from transportation systems across the city to predict status, influence traveler behaviour, and provide recommendations for planning, resulting in improved patronage and on-time performance for public transportation, average speed during peak periods, and average commuting times.
  • Smart port communities: To cope with increasing traffic volumes (up to 40,000 truck arrivals daily) and no possibility of expansion, Hamburg Port Authority leverages a logistics platform that consolidates data from various sources (e.g., vehicles) to communicate with the port’s various stakeholders, resulting in shortened driving times (up to 5,000 hours saved per day) and better planning for port stakeholders.
  • Predictive maintenance: Operating a fleet of nearly 30,000 moving assets that move over 2 million passengers each day, Italy’s railway operator Trenitalia has established a dynamic maintenance model that analyzes sensor data and monitors equipment behavior remotely to decrease maintenance and service costs (eight percent to 10% reduction expected), while boosting availability and reliability of service for passengers.
  • Connected safety: To prevent road accidents, such as the one that killed 14 bus riders in Japan in January 2016, SAP and NTT have built a solution – currently being tested by Keifuku Bus Company – that estimates drivers’ fatigue level by analyzing their vital signs (e.g., heartbeat, nervous system responses) fed through a sensor-equipped vest and combines that data with vehicle-related data. Predictive capabilities can thus help transportation companies identify potential danger before accidents occur.

What do these case studies tell us about the keys to value creation, both at a microeconomic and at a macroeconomic level?

  1. Data is the new oil: Every government organization or business (e.g., logistics service providers, manufacturers, retailers), every person (e.g., workers, consumers, citizens) and soon every “thing” (e.g., vehicles, containers, linear assets) will be connected. With Big Data technologies becoming more and more affordable, organizations are now able to leverage timely, meaningful, and actionable insights to make best-informed decisions and ultimately improve outcomes – be it in terms of customer service, cycle times, or productivity and efficiency.
  1. Networked collaboration amplifies value creation: As shown by the smart traffic management and smart port communities concepts above, the key to maximizing efficiency from an end-to-end perspective is to intelligently connect people, things, and businesses across the value chain – which is enabled by cloud-based networks and applications.
  1. Technology strategies need to be constantly revisited: The sophistication and affordability of digital technology are soaring, enabling businesses and public services organizations to more easily experiment with potential use cases and assess technological feasibility, business viability, and human desirability. At the same time, the pace of mass adoption and the transformative impact of each technology are becoming harder to predict. Hence businesses, governments, and policymakers need to adopt an agile stance on technology if they are to extract the most value from it.
  1. Countries can derive a competitive advantage in the same way companies do: Becoming a data-driven country is key to competing at an international level, just as data-driven companies are keeping an edge over their competitors by making informed, timely, forward-looking decisions. Similarly, a country can learn from the way companies approach innovation through the concept of “bimodal IT.” At a country level, this can translate into quick wins through opportunities that relate to clear-scoped, well-defined problem statements on the one hand, and lay the foundation for holistic value creation by addressing the interconnectivity challenge across the value chain on the other hand.

In summary, two key learnings can be applied at a country level: First, there is a need for an approach that is both holistic and differentiated (“two-speed” concept), allowing the capture of quick wins while laying the foundation for an integrated, digitized national supply chain. Second, infrastructure of the future does not have to be bigger but smarter – in other words, the focus should be placed on data-intensive rather than capital-intensive assets.

If you would like to assess your own organization’s digital maturity, take the free 10-minute Digital Transportation & Logistics Readiness Assessment.

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Thierry Morin

About Thierry Morin

Thierry Morin is helping companies in the Services industries become digital enterprises. As a member of the Industry Value Engineering at SAP team in Australia and New Zealand, he works with the broader sales and services teams to inspire customers and enable them to identify and realise value from digital innovation.

How Artificial Intelligence And Machine Learning Will Transform The Wholesale Industry

Karen Lynch

Artificial intelligence and machine learning technologies are quickly becoming “the new normal.” Despite alarmist sci-fi predictions about AI from Elon Musk and Stephen Hawking, these innovations are set to transform the way wholesale distributors do business.

A new level of insight

Machines, computer software, and algorithms can now understand written and spoken words at a deep level. Some are refined enough to determine the meaning of images and video media. They can even extrapolate possible futures. Analytics and data intelligence are enhancing business processes and facilitating more intuitive customer service practices.

Artificial intelligence and machine learning technologies have enabled computers to compete with and, in many cases, surpass human ability. They are making their way into many domains that were previously reserved for humans, and this frees up human resources for more value-added tasks.

In addition to automating mundane tasks, machines are taking over increasingly complex functions in all lines of business. Machines with the ability to take on more intricate work tasks enable a new level of automation across all areas of business. These innovations are particularly valuable for wholesale distributors.

Automation frees up assets for strategic advances

Just as in the retail space, clients in the wholesale distribution industry have higher expectations as well as heightened influence. Increased efficiency, being easy to do business with and reducing errors is paramount.

Wholesale distributors are now able to create smarter, more intuitive and more efficient processes than ever before. With the supply chain process streamlined, resources are freed up for more strategic activities.

Digital transformation embodies making full use of machine learning as well as the internet of things, data intelligence, more refined analytics, big data, block chain, the cloud, design thinking and related innovative technologies.

Wholesalers of all sizes can benefit

The IoT (Internet of Things) is a dynamic “network of networks” connecting components and endpoints in the business world. This facilitates communication without the need for human interaction. This advance is foundational to the efficacy of artificial intelligence and machine learning in business.

Wholesalers operate almost exclusively in a B2B environment. While there is a bit less urgency for transformation in this realm than in the consumer space, IoT adoption is still robust. The digital revolution has already transformed the wholesale business in the past decade, and machine learning and artificial intelligence are set to take the industry into new realms altogether.

Giant online wholesalers like Alibaba and Amazon are setting the stage for what’s to come. Wholesalers of all sizes will be pursuing new initiatives that make the most of the IoT and technologies like 3D printing. These additions will enable new service capabilities and product offerings for business customers.

A more intuitive way of doing business

These revolutionary changes raise the bar for all companies in the wholesale industry. Sitting on the sidelines is simply not an option; businesses are becoming accustomed to the increased innovation these changes facilitate, and they will quickly lose patience with wholesalers who are not making the most of these technologies.

Keeping track of inventory at all times is crucial to success as a wholesaler. One of the most robust aspects of this evolution for wholesale companies is the capacity for highly accurate real-time reporting.

Some of the key benefits of these innovations include:

Better customer service: Artificial intelligence and machine learning will allow wholesale distributors to anticipate and intuit future customer needs based upon past and present activity.  (Delete the word “your” before wholesale distributors)

Reduced costs: In addition to always having enough product to meet customer demand, fluctuations in demand can be better anticipated. This information will inform purchasing decisions for higher accuracy than ever before. This in turn will reduce overages and inventory surpluses that can cause a high number of “unsaleable” and wasted expenditures on these products.

Predictive maintenance: Sensors on key equipment and processes within factories and warehouses that are plugged into the IoT will allow components to be serviced and replaced before they become a problem. Remotely installed commerce assets such as vending machines, refrigerators and coolers can also be accurately monitored. This increases uptime and further enhances customer service.

Overall, a digital transformation in the wholesale industry using these technologies will help to improve internal visibility across all lines of business. This will allow exponentially better customer service while reducing both waste and overages.

A new world of innovation

As you can see, artificial intelligence and machine learning technologies will facilitate a range of innovations for the wholesale industry. Better process automation, improved customer engagement, more effective assets and even new revenue models are now possible. Real-time data will be taken to new levels with the ability of these technologies to anticipate customer needs and extrapolate futures.

Artificial intelligence, machine learning, and the digital revolution are transforming the world. Is your business ready?

Learn how to bring new technologies and services together to power digital transformation: The IoT Imperative for Consumer Industries. Explore how to bring Industry 4.0 insights into your business today: Industry 4.0: What’s Next?

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Karen Lynch

About Karen Lynch

Karen Lynch is the Vice President, Global Wholesale Distribution Industry Business Unit at SAP. She sets the vision and direction and execute the go to market plan to address the needs of Wholesale Distributors across the globe by using SAP solutions.

The Promise Of Drones And Machine Learning For Oil And Gas Industry

Ansari Nubeel

Digital transformation is no longer a fuzzy buzzword in industry, rather it is now a well understood and a credible approach to achieving business value. With increasing maturation of transformative technologies, it’s becoming a lot easier for organizations to chart their approach and digital transformation journeys.

The oil and gas industry was slow to leverage transformative technologies like the Internet of Things, machine learning, blockchain, artificial intelligence, and virtual reality. However, progressive companies have started to experiment with these new technologies to drive incremental value for their organization. These early adopters are showing how digital transformation is driving cost reduction, improving reliability, and increasing safety of people across the industry value chain and, in the process, attracting more companies and investment in these technologies.

Key challenges

The oil and gas industry faces the unique challenge of ensuring the efficient and safe operation of assets that are distributed geographically or in areas that are not easily accessible. In these cases, technologies like drones and machine learning could become very relevant. Drone-based aerial surveys of inaccessible areas can provide rich insights into the condition of the assets. Well platforms or areas above and near underground pipelines are some of the places where drone based inspection can work wonders.

How drones and machine learning can help overcome challenges

A common and simple use of a drone is to inspect inaccessible areas that would typically require scaffolding, rope, or a physical setups. By taking pictures of assets, such as flares, refinery columns, offshore platforms, or large crude oil tanks, and using them for visual inspections, oil and gas companies can prioritize detailed inspection and maintenance activities.

However, drone inspection’s true potential can be unleashed if machine learning is used to analyze the large volume of images to identify patterns and/or map the images to look for abnormalities. In this regard, a deep-learning algorithm based on a convolutional neural network (CNN) can help. In machine learning, a CNN (or ConvNet) is a class of deep, feed-forward artificial neural networks used for analyzing visual imagery. Simply put, it’s learning based on imagery.

In an oil and gas installation, a CNN-based algorithm running on a geoservice-enabled machine learning platform can be used to create a digital representation of a remote platform, a crude oil tank farm, an over-ground layout for an underground pipeline, etc., by feeding standard images (a test data set) to train the algorithm to identify an asset on the ground. This enables a CNN algorithm to understand the details in imagery. Any new photograph captured with drone-based inspection can then be evaluated based on the CNN algorithm

For example, standard images of the surface over an underground pipeline can be fed into the algorithm to train it. Afterwards, every time a visual survey is done, the new images can be analyzed based on the learning in the CNN algorithm, and any abnormality that can’t be mapped with the existing data set can be highlighted in the analysis. Human intervention can target this exception for inspection, instead of reviewing the entire information.

Summary

Drone-based aerial imagery has the potential to significantly transform maintenance and inspection processes for oil and gas installations. A geoservice-enabled machine learning platform with a CNN-based algorithm can analyze the results from aerial inspection, and recommend human intervention only if there are mismatches between the new imagery and the imagery used for training the algorithm.

For more on how technology is transforming the supply chain, see Tick Tock: Start Preparing for Resource Disruption.

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Ansari Nubeel

About Ansari Nubeel

Nubeel Ansari is the Digital Leader for Oil & Gas and Utilities industries at SAP India. He is responsible for driving SAP India's Go to Market for these industries, and engage with key customers in these industries through value management, customer co-innovation, digital transformation, and business process performance improvement programs by developing road maps, reimagining business models, and helping them reduce costs with digital technologies.

Why Strategic Plans Need Multiple Futures

By Dan Wellers, Kai Goerlich, and Stephanie Overby , Kai Goerlich and Stephanie Overby

When members of Lowe’s Innovation Labs first began talking with the home improvement retailer’s senior executives about how disruptive technologies would affect the future, the presentations were well received but nothing stuck.

“We’d give a really great presentation and everyone would say, ‘Great job,’ but nothing would really happen,” says Amanda Manna, head of narratives and partnerships for the lab.

The team realized that it needed to ditch the PowerPoints and try something radical. The team’s leader, Kyle Nel, is a behavioral scientist by training. He knows people are wired to receive new information best through stories. Sharing far-future concepts through narrative, he surmised, could unlock hidden potential to drive meaningful change.

So Nel hired science fiction writers to pen the future in comic book format, with characters and a narrative arc revealed pane by pane.

The first storyline, written several years before Oculus Rift became a household name, told the tale of a couple envisioning their kitchen renovation using virtual reality headsets. The comic might have been fun and fanciful, but its intent was deadly serious. It was a vision of a future in which Lowe’s might solve one of its long-standing struggles: the approximately US$70 billion left on the table when people are unable to start a home improvement project because they can’t envision what it will look like.

When the lab presented leaders with the first comic, “it was like a light bulb went on,” says Manna. “Not only did they immediately understand the value of the concept, they were convinced that if we didn’t build it, someone else would.”

Today, Lowe’s customers in select stores can use the HoloRoom How To virtual reality tool to learn basic DIY skills in an interactive and immersive environment.

Other comics followed and were greeted with similar enthusiasm—and investment, where possible. One tells the story of robots that help customers navigate stores. That comic spawned the LoweBot, which roamed the aisles of several Lowe’s stores during a pilot program in California and is being evaluated to determine next steps.

And the comic about tools that can be 3D-printed in space? Last year, Lowe’s partnered with Made in Space, which specializes in making 3D printers that can operate in zero gravity, to install the first commercial 3D printer in the International Space Station, where it was used to make tools and parts for astronauts.

The comics are the result of sending writers out on an open-ended assignment, armed with trends, market research, and other input, to envision what home improvement planning might look like in the future or what the experience of shopping will be in 10 years. The writers come back with several potential story ideas in a given area and work collaboratively with lab team members to refine it over time.

The process of working with writers and business partners to develop the comics helps the future strategy team at Lowe’s, working under chief development officer Richard D. Maltsbarger, to inhabit that future. They can imagine how it might play out, what obstacles might surface, and what steps the company would need to take to bring that future to life.

Once the final vision hits the page, the lab team can clearly envision how to work backward to enable the innovation. Importantly, the narrative is shared not only within the company but also out in the world. It serves as a kind of “bat signal” to potential technology partners with capabilities that might be required to make it happen, says Manna. “It’s all part of our strategy for staking a claim in the future.”

Planning must become completely oriented toward—and sourced from—the future.

Companies like Lowe’s are realizing that standard ways of planning for the future won’t get them where they need to go. The problem with traditional strategic planning is that the approach, which dates back to the 1950s and has remained largely unchanged since then, is based on the company’s existing mission, resources, core competencies, and competitors.

Yet the future rarely looks like the past. What’s more, digital technology is now driving change at exponential rates. Companies must be able to analyze and assess the potential impacts of the many variables at play, determine the possible futures they want to pursue, and develop the agility to pivot as conditions change along the way.

This is why planning must become completely oriented toward—and sourced from—the future, rather than from the past or the present. “Every winning strategy is based on a compelling insight, but most strategic planning originates in today’s marketplace, which means the resulting plans are constrained to incremental innovation,” says Bob Johansen, distinguished fellow at the Institute for the Future. “Most corporate strategists and CEOs are just inching their way to the future.” (Read more from Bob Johansen in the Thinkers story, “Fear Factor.”)

Inching forward won’t cut it anymore. Half of the S&P 500 organizations will be replaced over the next decade, according to research company Innosight. The reason? They can’t see the portfolio of possible futures, they can’t act on them, or both. Indeed, when SAP conducts future planning workshops with clients, we find that they usually struggle to look beyond current models and assumptions and lack clear ideas about how to work toward radically different futures.

Companies that want to increase their chances of long-term survival are incorporating three steps: envisioning, planning for, and executing on possible futures. And doing so all while the actual future is unfolding in expected and unexpected ways.

Those that pull it off are rewarded. A 2017 benchmarking report from the Strategic Foresight Research Network (SFRN) revealed that vigilant companies (those with the most mature processes for identifying, interpreting, and responding to factors that induce change) achieved 200% greater market capitalization growth and 33% higher profitability than the average, while the least mature companies experienced negative market-cap growth and had 44% lower profitability.

Looking Outside the Margins

“Most organizations lack sufficient capacity to detect, interpret, and act on the critically important but weak and ambiguous signals of fresh threats or new opportunities that emerge on the periphery of their usual business environment,” write George S. Day and Paul J. H. Schoemaker in their book Peripheral Vision.

But that’s exactly where effective future planning begins: examining what is happening outside the margins of day-to-day business as usual in order to peer into the future.

Business leaders who take this approach understand that despite the uncertainties of the future there are drivers of change that can be identified and studied and actions that can be taken to better prepare for—and influence—how events unfold.

That starts with developing foresight, typically a decade out. Ten years, most future planners agree, is the sweet spot. “It is far enough out that it gives you a bit more latitude to come up with a broader way to the future, allowing for disruption and innovation,” says Brian David Johnson, former chief futurist for Intel and current futurist in residence at Arizona State University’s Center for Science and the Imagination. “But you can still see the light from it.”

The process involves gathering information about the factors and forces—technological, business, sociological, and industry or ecosystem trends—that are effecting change to envision a range of potential impacts.

Seeing New Worlds

Intel, for example, looks beyond its own industry boundaries to envision possible future developments in adjacent businesses in the larger ecosystem it operates in. In 2008, the Intel Labs team, led by anthropologist Genevieve Bell, determined that the introduction of flexible glass displays would open up a whole new category of foldable consumer electronic devices.

To take advantage of that advance, Intel would need to be able to make silicon small enough to fit into some imagined device of the future. By the time glass manufacturer Corning unveiled its ultra-slim, flexible glass surface for mobile devices, laptops, televisions, and other displays of the future in 2012, Intel had already created design prototypes and kicked its development into higher gear. “Because we had done the future casting, we were already imagining how people might use flexible glass to create consumer devices,” says Johnson.

Because future planning relies so heavily on the quality of the input it receives, bringing in experts can elevate the practice. They can come from inside an organization, but the most influential insight may come from the outside and span a wide range of disciplines, says Steve Brown, a futurist, consultant, and CEO of BaldFuturist.com who worked for Intel Labs from 2007 to 2016.

Companies may look to sociologists or behaviorists who have insight into the needs and wants of people and how that influences their actions. Some organizations bring in an applied futurist, skilled at scanning many different forces and factors likely to coalesce in important ways (see Do You Need a Futurist?).

Do You Need a Futurist?

Most organizations need an outsider to help envision their future. Futurists are good at looking beyond the big picture to the biggest picture.

Business leaders who want to be better prepared for an uncertain and disruptive future will build future planning as a strategic capability into their organizations and create an organizational culture that embraces the approach. But working with credible futurists, at least in the beginning, can jump-start the process.

“The present can be so noisy and business leaders are so close to it that it’s helpful to provide a fresh outside-in point of view,” says veteran futurist Bob Johansen.

To put it simply, futurists like Johansen are good at connecting dots—lots of them. They look beyond the boundaries of a single company or even an industry, incorporating into their work social science, technical research, cultural movements, economic data, trends, and the input of other experts.

They can also factor in the cultural history of the specific company with whom they’re working, says Brian David Johnson, futurist in residence at Arizona State University’s Center for Science and the Imagination. “These large corporations have processes and procedures in place—typically for good reasons,” Johnson explains. “But all of those reasons have everything to do with the past and nothing to do with the future. Looking at that is important so you can understand the inertia that you need to overcome.”

One thing the best futurists will say they can’t do: predict the future. That’s not the point. “The future punishes certainty,” Johansen says, “but it rewards clarity.” The methods futurists employ are designed to trigger discussions and considerations of possibilities corporate leaders might not otherwise consider.

You don’t even necessarily have to buy into all the foresight that results, says Johansen. Many leaders don’t. “Every forecast is debatable,” Johansen says. “Foresight is a way to provoke insight, even if you don’t believe it. The value is in letting yourself be provoked.”

External expert input serves several purposes. It brings everyone up to a common level of knowledge. It can stimulate and shift the thinking of participants by introducing them to new information or ideas. And it can challenge the status quo by illustrating how people and organizations in different sectors are harnessing emerging trends.

The goal is not to come up with one definitive future but multiple possibilities—positive and negative—along with a list of the likely obstacles or accelerants that could surface on the road ahead. The result: increased clarity—rather than certainty—in the face of the unknown that enables business decision makers to execute and refine business plans and strategy over time.

Plotting the Steps Along the Way

Coming up with potential trends is an important first step in futuring, but even more critical is figuring out what steps need to be taken along the way: eight years from now, four years from now, two years from now, and now. Considerations include technologies to develop, infrastructure to deploy, talent to hire, partnerships to forge, and acquisitions to make. Without this vital step, says Brown, everybody goes back to their day jobs and the new thinking generated by future planning is wasted. To work, the future steps must be tangible, concrete, and actionable.

Organizations must build a roadmap for the desired future state that anticipates both developments and detours, complete with signals that will let them know if they’re headed in the right direction. Brown works with corporate leaders to set indicator flags to look out for on the way to the anticipated future. “If we see these flagged events occurring in the ecosystem, they help to confirm the strength of our hypothesis that a particular imagined future is likely to occur,” he explains.

For example, one of Brown’s clients envisioned two potential futures: one in which gestural interfaces took hold and another in which voice control dominated. The team set a flag to look out for early examples of the interfaces that emerged in areas such as home appliances and automobiles. “Once you saw not just Amazon Echo but also Google Home and other copycat speakers, it would increase your confidence that you were moving more towards a voice-first era rather than a gesture-first era,” Brown says. “It doesn’t mean that gesture won’t happen, but it’s less likely to be the predominant modality for communication.”

How to Keep Experiments from Being Stifled

Once organizations have a vision for the future, making it a reality requires testing ideas in the marketplace and then scaling them across the enterprise. “There’s a huge change piece involved,”
says Frank Diana, futurist and global consultant with Tata Consultancy Services, “and that’s the place where most
businesses will fall down.”

Many large firms have forgotten what it’s like to experiment in several new markets on a small scale to determine what will stick and what won’t, says René Rohrbeck, professor of strategy at the Aarhus School of Business and Social Sciences. Companies must be able to fail quickly, bring the lessons learned back in, adapt, and try again.

Lowe’s increases its chances of success by creating master narratives across a number of different areas at once, such as robotics, mixed-reality tools, on-demand manufacturing, sustainability, and startup acceleration. The lab maps components of each by expected timelines: short, medium, and long term. “From there, we’ll try to build as many of them as quickly as we can,” says Manna. “And we’re always looking for that next suite of things that we should be working on.” Along the way certain innovations, like the HoloRoom How-To, become developed enough to integrate into the larger business as part of the core strategy.

One way Lowe’s accelerates the process of deciding what is ready to scale is by being open about its nascent plans with the world. “In the past, Lowe’s would never talk about projects that weren’t at scale,” says Manna. Now the company is sharing its future plans with the media and, as a result, attracting partners that can jump-start their realization.

Seeing a Lowe’s comic about employee exoskeletons, for example, led Virginia Tech engineering professor Alan Asbeck to the retailer. He helped develop a prototype for a three-month pilot with stock employees at a Christiansburg, Virginia, store.

The high-tech suit makes it easier to move heavy objects. Employees trying out the suits are also fitted with an EEG headset that the lab incorporates into all its pilots to gauge unstated, subconscious reactions. That direct feedback on the user experience helps the company refine its innovations over time.

Make the Future Part of the Culture

Regardless of whether all the elements of its master narratives come to pass, Lowe’s has already accomplished something important: It has embedded future thinking into the culture of the company.

Companies like Lowe’s constantly scan the environment for meaningful economic, technology, and cultural changes that could impact its future assessments and plans. “They can regularly draw on future planning to answer challenges,” says Rohrbeck. “This intensive, ongoing, agile strategizing is only possible because they’ve done their homework up front and they keep it updated.”

It’s impossible to predict what’s going to happen in the future, but companies can help to shape it, says Manna of Lowe’s. “It’s really about painting a picture of a preferred future state that we can try to achieve while being flexible and capable of change as we learn things along the way.” D!


About the Authors

Dan Wellers is Global Lead, Digital Futures, at SAP.

Kai Goerlich is Chief Futurist at SAP’s Innovation Center Network.

Stephanie Overby is a Boston-based business and technology journalist.


Read more thought provoking articles in the latest issue of the Digitalist Magazine, Executive Quarterly.

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Dan Wellers

About Dan Wellers

Dan Wellers is founder and leader of Digital Futures at SAP, a strategic insights and thought leadership discipline that explores how digital technologies drive exponential change in business and society.

Kai Goerlich

About Kai Goerlich

Kai Goerlich is the Chief Futurist at SAP Innovation Center network His specialties include Competitive Intelligence, Market Intelligence, Corporate Foresight, Trends, Futuring and ideation. Share your thoughts with Kai on Twitter @KaiGoe.heif Futu

About Stephanie Overby

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Retail Tomorrow: How Today’s Technology Is Shaping Retail’s Future

Stephen Sparrow

Do you ever think about tomorrow? Many retailers don’t. They’re too concerned with what’s happening in the moment. They’re too wrapped up in managing their daily business operations or maintaining profit margins.

Don’t get me wrong – those things are important. But tomorrow matters more than they know.

With game-changing technologies like the Internet of Things (IoT), virtual reality, and machine learning reshaping the retail landscape, tomorrow can no longer be ignored. If your company wants to stay ahead of the competition – both now and in the future – you need to begin experimenting with these innovations today.

Beer, there, and everywhere: Create an immersive customer experience

Imagine you’re a Brooklyn-based brewery. You craft the most delicious beer anyone’s ever tasted, and Brooklynites are absolutely gaga over your product. But how do you spread the word? How can you make people in Seattle or San Francisco thirst for your beverage?

Virtual reality and IoT tools can help you create a more immersive customer experience – one that gives people an in-depth view into your brewery – so folks across the country can get excited about sampling your suds.

By setting up a 360-degree video camera and implementing virtual reality capabilities, you can invite people all over the world to tour your facility. They can visit the tasting room, check out the outdoor patio, and watch the kettles work their magic in the production area.

IoT sensors, meanwhile, can provide prospective customers with insight around your brewing processes. Attached to the brew kettles, these sensors enable you to share real-time data about each batch of beer, from when the hops reach a boil to when fermentation is complete.

If viewers like what they see, they can order a case of your beer online.

Creating an immersive customer experience, where people get a glance behind the curtain to see how your company operates and how your product is made, is a surefire recipe for retail success.

A passion for fashion: Predict trends so your customers are always dressed to kill

Instagram, the popular image-sharing app, has a global community of more than 800 million users. These users share upwards of 95 million photos and videos per day.

If a woman from the United States is traveling to Tokyo for an upcoming vacation and wants to make sure she looks fashionable while visiting Japan’s capital city, where can she turn?

Instagram, of course.

With a simple keyword search for “fashion” and “Tokyo,” this woman could be knee-deep in results highlighting the top trends from this chic metropolitan hotspot. Now, with a better idea of what the locals are wearing, she can pick up a few new outfits before her trip, and she won’t feel so out of place in her American attire when she visits.

Retailers, particularly fashion brands, can benefit from how consumers are using apps like Instagram. By analyzing what people are wearing in photos taken in fashion meccas like London, Paris, Tokyo, Milan, or New York, your business can have its finger firmly on the pulse.

Pairing your analysis with machine learning capabilities can enable your retailer to detect and predict the hottest fashion trends. This will help your designers tailor the clothing they create to what’s happening – or what will be happening – in the market.

If more people are wearing floral-print miniskirts, you can design matching leggings. If more people are dressing in denim, you can ramp up production on jean jackets.

Staying up to date on the latest fashion trends can keep your retailer at the top of its game. Predicting the next big thing in fashion using machine learning? That will have your business declaring “game over” to all your competitors.

Not your grandma’s kitchen: Increase customer convenience through greater connectivity

Connected products are invading our homes. We have smart TVs in our living rooms. We have showerheads equipped with Bluetooth speakers in our bathrooms. We have lights that brighten or dim based on our sleeping schedules in our bedrooms.

In the kitchen, though, things are getting really intelligent. From precision cookers that alert you when dinner’s ready to coffee makers you can operate with your smartphone, kitchen appliances are creating a whole new level of convenience for customers.

With a smart refrigerator, customers can create shopping lists using a touch screen on the door. IoT capabilities enable people to add or remove items from their lists using a mobile device. Customers can even submit their grocery orders to a nearby store through their smart fridge, a convenient click-and-collect shopping scenario.

Augmented reality, meanwhile, allows people to peek inside their refrigerators without even opening them. If a woman at work wants to see if she has enough milk for a bowl of cereal tomorrow, she can check using a tablet or smartphone.

Retailers and consumer products companies can leverage this technology to deliver a more engaging product experience. The packaging of a stick of butter, for instance, might have a code on it. When a man peers into his refrigerator using his smartphone, he could click on the code and find out the product’s expiration date. Or perhaps he can learn a few new recipes he could bake using the butter.

By creating a hassle-free shopping experience and enhancing how your buyers engage with your products, you can increase sales and earn your customers’ loyalty.

Home sweet home: Modernize retail like real-estate agents have revolutionized homebuying

Think of how the realty business has changed over the past 25 years. In the early ‘90s, prospective homebuyers had to schedule an appointment with a Realtor or attend an open house to see a home they liked.

In the mid-2000s, house hunting went online, with sites like Trulia and Zillow springing up. Today, homebuyers can snap a photo of an on-the-market house they like using a mobile app and see pictures of the home’s interior, learn the price, find out the square footage, and discover how many bathrooms it has.

Retailers should strive to modernize their industry like the realty business has revolutionized homebuying. Barcode scanning and sensor tracking are just a couple technologies that could help.

If a customer is walking through the aisles of your store, you could offer them the opportunity to scan a tag on a shirt with their mobile device and instantly give them access to outfit ideas or show them accessories that match the top.

Sensors, meanwhile, could track where a shopper is in a store, allowing your retailer to send timely and relevant offers based on their location.

Adding value to your customer experience is the name of the game in retail. And there’s no better way to create a more valuable in-store customer experience than with the latest technology.

Innovation experimentation: Forge your path to a brighter future with revolutionary tech tools

Innovations like IoT, virtual reality, and machine learning are shaping what retail’s future will look like.

Your company’s success – both today and tomorrow – will depend on your willingness to embrace these technologies and experiment with new ways to engage and satisfy your customers.

Join us at the National Retail Forum’s 2018 conference and EXPO at the Jacob K. Javits Convention Center in New York City on January 14–16 to learn how the SAP Leonardo digital innovation system can help your organization bring these exciting technologies to life.

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Stephen Sparrow

About Stephen Sparrow

Stephen Sparrow is the Director of Retail Marketing at SAP. He defines, champions and executes marketing strategies to increase penetration and capture of revenue opportunities across SAP's retail enterprise accounts. He also develops industry advancing and perception enhancing programs to drive brand preference for SAP in the retail community.