Future Technology in Retail part one: Benefits and Hazards

14 July 2017

The robots are coming! In fact, they’re already here! There is a lot of discussion right now about what intelligent, autonomous new technologies might mean for our future, including some often outlandish perspectives emanating from Hollywood. Back in the real world though, retailers are firmly of the belief that these technologies offer a wealth of opportunities to revamp their businesses.

Indeed, retailers are telling us that over the coming three years they expect to increase investments into the eight essential technologies (see diagram) in order to increase operating efficiency, personalise and improve the customer experience, and increase profits. Ultimately, they believe these ‘digital disruptors’ will drastically change their businesses for the better, a perspective bolstered by PwC research indicating that technology leaders in their industry are twice as likely to achieve rapid revenue and profit growth as stragglers. 170705-115004-RP-OS_680px x 383px_v3 300dpi

This will be the first of two posts in which we assess the implications of retailers’ growing focus on emerging technologies. In this piece we will briefly touch on the potential business benefits of four of the ‘essential eight’ before, on the flip-side, introducing some of the oft-overlooked security considerations that retailers must be mindful of as they consider their adoption.

Enhancing the reality of retail

The World Economic Forum (WEF) has suggested that the internet of things (IoT), artificial intelligence (AI), drones/autonomous vehicles and robotics promise to have the greatest transformational impact on the retail sector, owing to their broad-ranging application, ability to drive efficiencies and impact on labour. The positive consequences retailers anticipate from integration of next-generation technology into their business operations are far-reaching, spanning logistical considerations like delivery and supply chain, through to a radical re-shaping of the consumer experience, and sales and payment processes (see diagram below).170705-115004-RP-OS_680px x 383px_v1 300dpiThese technologies have such transformative potential, with so many associated positives, that it can be easy to overlook the possible downsides associated with their implementation. Where these downsides do receive attention, the human consequences, including job displacement and increased unemployment, often, understandably, take precedence. By comparison, associated cyber security threats and challenges receive minimal attention, even though an approach to addressing them must be an integral part of any future-tech programme if it is to achieve its desired outcomes.  

Don’t be a replicant of bad practice

In many ways, retail organisations should see a cautionary tale in the experience of the utilities and industrial sectors, for example, when integrating new technologies into business operations. As was often the case in these sectors, once firms identified the cost-savings and operational efficiencies to be gained from implementing internet-connected sensors and control systems, they rushed to embrace the benefits of the technology. However, often they failed to build in security at the outset and many firms have been left with the seemingly never-ending task of retrofitting it ever since.

Of course, this comparison only extends so far. Retailers are already relying upon automation and internet-enabled operational technologies when their suppliers produce the goods they sell. The main differences come in the scale of change which this impending retail revolution appears set to bring, the extent to which it has a frontline impact on customer experience and sensitive data, and the sheer number and breadth of possible security vulnerabilities.  

In its most basic form, security involves identifying risks and working to systematically reduce them to an acceptable level or remove them altogether. Implementing emerging technologies into retailers’ operations therefore presents a security challenge comparable to any other, albeit one requiring expert knowledge of the technologies themselves and a genuinely holistic security strategy. When looking at the four technologies predicted to most disrupt the retail sector, businesses should be looking into the following security considerations:170705-115004-RP-OS_680px x 383px_v2 300dpiEvidently there is a lot to think about, spanning data, third-parties, insider threats, development lifecycles and everything in between. Equally, and rather inevitably, there are no easy answers to the questions that naturally arise from these security concerns. However, in part two of the series we will discuss a framework of three core principles that will help companies build their future tech security model from the ground upward.  

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