Trends with benefits: Smart cities and the future of retail
Nowadays, smart technology is everywhere — from smartphones and smart TVs, to smart refrigerators and even smart toilets. But the most recent and exciting trend to gather steam in the digital world are smart cities.
Essentially, a smart city is defined as the re-development of an area using communication technologies, data, and the Internet of Things (IoT). It is meant to boost the quality of urban life, covering areas like transportation, utilities, connectivity, and energy distribution.
London has gone through its fair share of smart renovations. The latest master plan ‘Smarter London Together’ seeks to make London the testing city for new innovations such as artificial intelligence (AI) and 5G technology. By 2050, the International Data Corporation (IDC) predicts that nearly 60% of the global population will be living in smart cities.
So where does that leave the retail sector? According to Serena Da Rold, a program manager in IDC’s customer insights and analysis group, smart cities present a sizeable market opportunity that can attract significant technology investments. “[Retailers can now] identify where the best opportunities lie for each specific use case now and over the next several years,” Da Rold said in an interview.
Retail has always been driven by data, as evident by traditional customer surveys and product reviews. But now, it all boils down to how the resulting data from these developments are being used. For example, Sainsbury’s is looking to develop their data talent to drive the transformation of their business. More specifically, they want to be able to use analytics to solve existing problems and streamline some of their processes.
Fortunately, data science is being used across many fields, and not just retail, so there's plenty of research being undertaken and many leading figures in the industry to gain insights from. Learning marketplace Udemy has data science courses from respected figures Jose Portilla and Kirill Eremenko among others, and this abundance of resource is now helping to reshape how retail companies like Sainsbury’s are helping to cut costs, analyse market trends, and automate other essential business processes.
People-powered marketing
Because smart cities rely on a network of sensors, the ones in stores can be used to collect data from people who enter, thus assisting with targeted marketing. For instance, customers in the area can be notified in real time about tailored discounts and promotions, which can assist in driving sales. Mobile company inMarket currently uses Beacon technology for this specific reason. Additionally, as store sensors integrate with consumer's phones and personal data, they can use this to build more accurate customer profiles.
Eco-friendly logistics
Another promising component of smart cities are smart roads. Recently, Sweden built the world's first electric-powered highway, called The eRoadArlanda project. With its conductive technology that can power vehicles while they travel, it can help reduce carbon emissions. This is good news not just for commuters, but for logistics companies and retailers who depend on shipping their products. At a time when sustainability is a top priority, companies can use it to further their green initiatives.
Next-level security
As early as 2004, major retailers like Walmart in the US have been using smart tags, which rely on Radio Frequency Identification (RFID) to track products across their supply chains. However, it does more than just prevent petty shoplifting. When combined with smart city technology, smart tags can help improve security beyond the store's walls. It actually has the potential when coupled with law enforcement to take down thieves. Plus, it also acts as a deterrent for possible illegal operations.
Replacing manpower
Meanwhile in Singapore, Singtel launched a self-service pop-up shop called Unboxed. Again, with the use of IoT and a bot, customers can buy phones, consult, and receive personalised recommendations — all without the need for employees. While this development may feed into the fear that robots will eventually drive humans to employment, the brighter side is that businesses can channel their manpower into more meaningful tasks, like business development and marketing.
As technology continues to evolve, retailers will have no choice but to keep up if they want to stay afloat. Fortunately, the arrival of smart cities is a welcome catalyst that will push society into the next retail revolution. Driven by data, convenience, and innovation, it's a promising future both for customers and brands alike.