ETD: 697 SPECIAL REPORT - Retailing in 2023

[E-Tailer's Digest]

  E-Tailer's Digest --- Everything for the  Retailer
  Issue #0697			24 June 2003
  George Matyjewicz, Moderator         mailto:georgem@gapent.com
  Published by:  GAP Enterprises, Ltd.  http://www.etailersdigest.com
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  CONTENTS

  [1]  Greetings.
  [2]  SPECIAL REPORT - Retailing in 2023

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  [1]  Greetings.
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Hi All:

Greetings from Las Vegas.  I'm here exhibiting at the IIA International 
Conference.  Great show.  We're breaking down the show on Tuesday, so you 
are getting an early edition of this special.

Today we have a special report on "Retailing in 2023."  Far fetched?  I 
don't think so.  Some of these concepts are now available, all that's 
needed is some tweaking.  And others will be available soon.

I had fun writing it.  What do you think?  Will this be the way of the 
future?  Will we all see it?

Let me know.

Now, let's get to everything for the retailer.

Sincerely


George Matyjewicz
Chief Global Strategist, GAP Enterprises, Ltd.
Author and Doctoral Candidate in Training
mailto:georgem@gapent.com
http://www.etailersdigest.com

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  [2]  Improving The Bottom Line
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Retailing in 2023
George Matyjewicz
Chief Global Strategist
GAP Enterprises, Ltd.
24 June  2003

I recently saw a new concept car from General Motors that was quite 
interesting.  It had a frame and engine and bodies that could be 
interchanged.  If today you want to drive a sports car or a pickup truck, 
you simply snap on a new body.  Then tomorrow when you have the family, you 
snap on a sedan ­ just like changing your socks.

In celebration of the 100th anniversary of the auto, GM gave their design 
team a clean slate and said if they were designing a car today, instead of 
last century, what would they do.   Well this concept car is very unique, 
and is scheduled for production in 2010.  The one I saw looked like it was 
ready for the Indianapolis 500 auto race.

That got me to thinking.  What will retailing of the future look 
like?  Will stores exist?  Will consumers shop online?  So, I put my 
imagination to work, and decided to look at grocery shopping ­ something we 
all need to do, yet is not too exciting.
	
Homes Of the Future.
Homes need the same intelligence and controls that a business has ­ 
inventory, order processing, bills of material, customer service, 
budgeting, financial controls, etc.  I've had these concepts in my mind for 
years, and strongly believe they are attainable with the technology 
available now and what should be coming along in the new future.

There have been predictions identifying ten uses for computers in the home 
­ control lights, heating, entertainment center, etc.  An auto I recently 
purchased has three remote control buttons built into the visor that allow 
me to open gates or garage doors, and even turn on my entertainment 
center.  And there are systems that will control electronics in your 
home.  Some manufacturers are looking at self-diagnosing appliances, where 
your refrigerator or washer can determine if there is a problem, and 
automatically dial service, where a repair person can fix it remotely. Then 
there is every bachelor’s fantasy where he turns the lights on and the 
sliding arc-shaped doors open to reveal the bar and entertainment center, 
complete with soft lights and mood music.

What about groceries?  I see a Kitchen Intelligence Transceiver (KIT) with 
a cupboard that has intelligence to know when you place groceries in and 
take them out.  That intelligence tracks your usage, and accumulates 
statistics.  For example, when you open a box of cereal, it knows the 
weight of the box, and when you put it back, it determines how much was 
used (maybe even calculate the calories) and, based on usage,  knows when 
to reorder.

Refrigerators will need to have the capabilities of weighing produce, as 
well as scanning the sensor device on products.  Notice I didn't say bar 
code.  I believe bar codes will be a thing of the past, replaced by a radio 
frequency ID code.

Dinner Party.
What happens when you have company, and plan a dinner party?  You ask KIT 
for help.  You tell KIT how many people you are having, and what cuisine 
you want.  KIT comes back with suggestions, including matching your 
inventory with the required groceries available, along with suggestions of 
what you can prepare with what you have, and a listing of recipes,  in 
order by the least amount of groceries needed.  Or maybe by price or exotic 
entrée, for when you want to impress that special someone.  Perhaps you 
would rather that KIT discuss the alternatives with you , to which you can 
tell KIT the one you want.  Or, maybe you'll just say “surprise me” and let 
KIT do all the planning for you.  Don't forget KIT also has some built in 
expertise on preparing meals ­ intelligence he gained from you and from 
global chefs.

A dinner party doesn't only have dinner.   What about 
wine?  Music?  Atmosphere?  By saying what theme you are seeking, KIT 
automatically selects the wine, based on what you have in inventory, and 
with suggestions for others. Again, the wine selection is done based on 
what you finally select as a recipe, e.g., exotic entrée to impress that 
special someone.

KIT then talks to the Entertainment Center Transceiver (ECT) to select the 
proper mood music from the vast selection it has at it’s disposal from the 
millions of songs available, globally, online.  If you want a special song 
played for that special occasion, you tell ECT, and that is included, 
including when you want it to play.  For example, when the guests arrive, a 
particular song should play.  When you’re ready to pop the question, you 
need that special song ­ your song.

Keep in mind that KIT gathers his personality from you.  So, you have to be 
careful.  Can you imagine KIT saying “you’re not going to serve that wine 
with this meal are you?”

Retail.
What does this have to do with retail?  For this concept to be successful, 
your grocer needs to have online interaction with your cupboard, along with 
the capabilities to react quickly.  For example, when you discovered that 
the recipe you selected for that special dinner lacked some ingredients, 
your grocer needs to be alerted and be able to deliver quickly.

Under normal circumstances, KIT calculates your economic ordering quantity, 
based on your usage, inventory space available and budget.  It then alerts 
your grocer when it is time to order, along with best times for 
delivery.  The grocer can then plan staff for filling orders and delivery.

Yes, online grocery ordering has been tried and it has failed a couple of 
times.  However, what was missing in their business plan was the fact that 
the customer still had to place the order, which saved no time at all.  If 
they were smart, they would have provided the consumer with a scanner which 
they could then use to scan the barcodes into an inventory system, which 
could then be managed automatically.  And reordering can be just as easy as 
described herein.  The software is not that difficult.  Give or lend a 
scanner which links to their computer which links to your store.  Think 
about the lifetime value of the customer!

Of course, the ordering of music is much easier, since it has a vast online 
selection to select.  That technology is available online today, e.g., 
Kazaa which is a peer-to-peer network that allows you to search millions of 
computers worldwide to find songs that you can download.  And Apple 
Computer introduced a new service that allows subscribers to download music 
from a vast collection.  If the record industry would get their act 
together, they would capitalize on this market and offer music download 
services.  What does it cost them?  Bandwidth, a collection of music and 
software to control the process.  It’s a cheap investment.

Retail Store Of The Future.
Let’s say you don't want automatic delivery, and would rather shop like in 
the old days, to see what new products are available.  In the store you 
select the goods and put them in the shopping cart, where the Grocery 
Intelligence Transceiver (GIT) scans them and matches against what you have 
at home.  How many times do we buy because we can't remember whether we 
have that product at home?  Well this intelligence alerts you if you 
already have that product at home.

When you pass certain new products GIT alerts you to something of interest 
based on your likes and budget.  For example, if you like exotic entrées or 
spicy cuisine, and a new product that you never tried is available, it 
alerts you.  If you have a budget, and that product is too pricey, it skips 
the alert.

As you select items, GIT is calculating what you have, and the cost.  When 
you return an item to the shelf, it deducts it from your cart total, and 
adds it back into store inventory.

The shopping cart is nothing like we know today.  It has compartments for 
your goods, i.e., frozen foods, refrigerated items, cleaning supplies, 
cupboard items, etc.

When you are finished shopping, you press a button and the money is 
automatically transferred from your bank account to the merchant’s.  If you 
try to go through the door without paying, alarms go off, or perhaps the 
payment transaction is completed automatically.  If your funds are short, 
it automatically goes to credit for those customers who have good credit 
with the store (like the old grocers who sold goods to local customers “on 
the arm”).  I guess GIT could go to extremes and throw a net around folks 
who try to leave without settling the transaction, but that wouldn't be 
nice customer service.

Notice, nobody packed the goods into bags?  That’s because of these new 
shopping carts.  Close each compartment, and put them into your car.  And 
these units detect the temperature needed for the goods, and adjust 
accordingly, e.g., keep frozen foods frozen and refrigerated items cold.

Back Home.
Back home you unpack the groceries and put them away, where your inventory 
is adjusted accordingly. Unfortunately, we still haven't solved that one 
major problem that bothers everybody ­ putting the groceries away!

Summary.
What happened here?

At the store:
1.	Grocers no longer need POS devices and the staff to check out and bag goods.
2.	Inventory is more accurate, and is based on projected usage.  Hence 
stores don't run out as often and they don't stock items that don't move.
3.	Since there is a reduction in staff, and better inventory control, the 
cost savings can be passed on to the consumer.
4.	Manufacturers gain valuable information on the buying habits of customers.

For the consumer:
1.	Savings with grocery shopping since the intelligence is calculating your 
lifestyle needs.
2.	More efficient use of groceries, since the recipes are planed based on 
what you have in house before ordering.
3.	Better use of time.  No longer do you have to spend the couple of hours 
a week preparing an order and shopping.
4.	

Savings all around, plus more efficient ways of living.

I won't touch the security issues, as I assume they will be nonexistent 
when this concept takes hold.

Will it happen in my lifetime?  I hope so.

###

About the author:
George Matyjewicz, PhD is Global Strategist of GAP Enterprises, Ltd. His 
dissertation “Just In Time Payments And The New Global Currency For 
Conducting Business In A Global Economy” was compiled from 3+ decades 
experience in the business world.  He was formerly President/General 
Manager of a global digital currency company with customers in 190 
countries and Chief E-Commerce Officer for a global giftware company where 
he experienced risk management issues first hand.  He was a 
Principal/Partner at a top 20 U.S. CPA/Consulting firm. He is regularly 
published as an expert on global business, finance, technology and 
implementation and writes and publishes E-Tailer’s Digest online and in 
print, which reaches retailers in 37 countries worldwide.

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