Talking With: Cisco Retail CTO Shaun Kirby on digital disruption

Feb. 10, 2016 | by Judy Mottl

Artificial intelligence is expected to hit big in 2016 for retailers given its ability to analyze consumer preferences and behavior in order to learn what provides "true value" to the consumer. Cisco conducted a study with business school IMD to gain deeper insight on the technology trend and how cognitive computing will play a valuable role for creating highly relevant customer recommendation.

The study, conducted by the Global Center for Digital Business Transformation, a joint initiative of Cisco and IMD, reveals 47 percent of retail executives believe digital disruption "somewhat" or "significantly" increases the risk of going out of business altogether. Yet almost half (46 percent) of retail executives surveyed either do not acknowledge the risk of digital disruption or have not addressed it sufficiently, with 30 percent taking a "wait and see" approach.

The study revealed just 24 percent have a plan and are willing to disrupt themselves in order to compete Cisco Retail CTO Shaun Kirby believes digital disruption will reshape markets faster than any prior technology. Retail Customer Experience talked with Kirby to learn why he thinks it will make an impact on the retail industry in the next five years.
 

RCE: What tool or technology do you expect to burst out of the gate in 2016?

Kirby: We expect artificial intelligence will explode on the scene for retail as it is across industries at the moment. Today, personalized recommendations are rarely as relevant or helpful as they could be, and with the emergent ability to capture a vast amount more context information about shopper preferences and behavior, artificial intelligence will be key to turning that information into insight that provides true value to the consumer. Cognitive computing as well as deep learning and other approaches comprise this space, and cognition as a service could provide the platform power to make highly relevant recommendations that shoppers find a compelling and useful reality very soon. Retailers should nucleate expertise in these spaces and begin experimenting immediately on how they can tap these technologies to improve customer intimacy and relevance.
 

RCE: Of all the emerging technologies that arrived in 2015 which appears to be the most compelling going forward and is there one trend or tech that you don't expect will grab deep root?

Kirby: We believe traceability of products throughout the supply chain from origin to consumer is poised for explosive growth in 2016. The importance of provenance of everything from food products to clothing to electronics and their constituent materials is soaring, especially among millennial consumers, and retailers who are able to provide information on the sources of items sold will wield a significant competitive advantage. This requires sensing and intelligence throughout the network to capture important events such as harvest, extraction, production, transport, packaging, and ultimately sales of goods. One recent example of a solution we expect to grow in popularity in 2016 is the "farm to fork" traceability solution Cisco created together with Barilla Pasta, where shoppers can scan the QR code on a box of pasta or a jar of sauce and obtain detailed information about the farms the ingredients came from, the ecological footprint of the product (including water and land usage and CO2 produced), as well as nutrition and more.

While personal identification for the purpose of providing a high-tough experience in selected retail sectors like clothing boutiques may gain traction, we don't expect technologies like face recognition or even mobile device recognition to gain deep root across the broader retail industry on account of the "creepiness" factor. Customers who opt in will instead likely prefer direct messaging to their mobile devices for helpful features like guidance to their site-to-store item for immediate pickup or way finding for their personal shopping list.
 

RCE: The mobile experience seemed to hit home hard by mid 2015 with many retailers putting a mobile strategy on par with the store environment strategy in terms of importance. Where do you think mobile experience is at this point?

Kirby: We agree strongly about the importance of mobile strategy for retail. While retailers' adoption of mobile technologies has grown rapidly to date, however, we believe it's still in its infancy — today's digital devices may be powerful and packed with capabilities, but their form factor is basically unchanged from the cell phone, and in the busy and often chaotic retail environment, that poses significant limitations to the mobile experience. At least one free hand and often two are required to operate a mobile device, screens are still tiny compared to the full human field of vision, and speech recognition and understanding, especially in a noisy environment, are still not on par with verbal interaction with a human assistant. These factors all combine to limit severely the use of mobile devices in retail today compared to what will be possible in the golden age of wearable computing. With heads up displays on glasses or even contacts, full rich verbal interfaces, and precise location and position information, wearables will take the mobile experience into a new realm, where seamless interaction with the retailers' applications enriched by the full in-store and shopping journey context provides is game changing. We see the thirst for knowledge (about everything from item features to price comparisons to way finding) across generations driving mobile adoption, and when the form factors evolve from handheld phones to seamlessly integrated multi-sensory wearables, we expect adoption to accelerate even further.
 

RCE: In looking ahead now in 2016 what will be the one thing retailers have to make sure they have up and running and bolted tight to keep consumers happy and loyal and what one thing do retailers have to make sure they're not doing or stop doing for the same reason?

Kirby: Retailers will need to make sure above all they have industry leading security, both physical and cyber, firmly in place for 2016. The digitization of retail calls for a new security paradigm, where there is no longer a secure perimeter inside of which everything is trusted, but rather devices and people will need to be connectable wherever the business case arises. This means security will need to be embedded throughout the network and controllable from a centralized "single pane of glass" where policy can be administered consistently. Moreover, enterprises in every industry will need to make sure they are prepared for security threats before, during, and after potential attacks.  Cisco's Threat Centric Security model provides a good roadmap for this critical positioning for retailers.

Retailers will also need to make sure they are not infringing on consumers' privacy and should make clear what sensing and analytics they are employing and give consumers the option to opt in or out. Sensing and analytics will need to be targeted toward providing the most value to the consumer, creating a "win-win" situation where the consumer provides the retailer information in return for added value.
 

 


Topics: Connectivity, Consumer Behavior, Customer Experience, Customer Service, Digital Merchandising, Marketing, Omnichannel / Multichannel, Talking With, Technology

Companies: Cisco Systems


Judy Mottl / Judy Mottl is an experienced editor, reporter and blogger who has worked for top media including AOL, InformationWeek and InternetNews. She’s written everything from breaking news to in-depth trends. She loves a great pitch so email here, follow on Twitter and connect on LinkedIn.
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