by Tony Rodriguez, Chief Technology Officer of Digimarc Corporation
Blockchain blows up
Best known as the basis for Bitcoin, the stealthy digital currency, blockchain’s distributed ledger technology has value for tracking products throughout the supply chain. With consumer demand for greater product transparency, blockchain has the potential to add an important aspect of traceability to the foods we eat, communicating where they originate. Walmart, Kroger, McCormick, Tyson Foods and others have teamed with IBM to experiment with track-and-trace tests on Chinese pork and Mexican mangoes, and we expect blockchain to be used more prevalently in grocery, retail and other industries.
Biometrics goes big
Apple’s new Face ID system makes your mug your password, the latest in an ongoing trend toward biometric-based security features in business. Optical fingerprint scanners are used on many laptops, and gyms and fitness centers have used fingerprints to manage identity and keep track of their members for years. Retinal scanners were once the stuff of science fiction, but the technology has become more commercially popular and is now used in government agencies, prisons, banks and medicine. India already manages the world's largest biometric ID system, with nearly 1.2 billion enrolled members. Combined with a portion of the nearly 1 billion estimated global iPhone users, a quarter of the world’s population could be cataloged in a biometric database within just a few years. For retailers, widespread use of biometrics could mean faster checkout, more accurate shipping, better fitting apparel, accessories and more. Already startups are exploring facial identification services that would allow shoppers to opt in for special offers and personalized service based on a selfie.
Retail consolidation continues
The retail industry, and specifically the grocery sector, has seen substantial consolidation in recent years. Albertsons acquired Safeway for $9.4 billion in 2014. In 2016, Walmart purchased Jet, an online retailer, for reportedly $3.3 billion. Amazon bought Whole Foods for $13.4 billion in 2017. Historically known for low margins, grocers are increasingly seeking to benefit from economies of scale by growing bigger and streamlining the supply chain. We expect the consolidation to continue—even as it attracts the attention of regulators—with ethnic and specialty markets the next likely targets.
Machine learning gets smarter
Neural networks and other aspects of machine learning will be more prevalent, particularly in predicting what, when and where consumers will buy. Experts say machine learning can turn collected customer data into a variety of actionable insights that can be used to improve personalization by providing relevant product recommendations. And, none other than Walmart, still the world’s largest retailer, revealed that it is increasingly using machine learning technology to enhance the customer shopping experience in-store and online.
Self-checkout in a state of flux
The retail sector seems unsure about how to handle self-checkout. Orders for self-checkout terminals in 2016 were huge, a 155 percent increase over the prior year. But, buzz continues over the ability for shoppers to instantly checkout using an app right in the aisle, like the Scan & Go program at Sam’s Club. And, while it may have been a successful PR stunt as much as anything, the Amazon Go vision of shopping without checkout of any kind continues to capture the imagination for many. We believe that in the near-term, shoppers will scan and pay with an app, bypassing self-checkout kiosks altogether.
Voice recognition revs up
Voice-based personalization tools like Siri, Alexa and Cortana will be used more than ever in retail. ComScore, a media analytics company, predicts that by 2020, 50 percent of all searches will be voice searches. Already startups are attempting to detect a range of emotions in human speech, enabling new voice-based features. Before long, in-store shoppers will be able to speak with a virtual assistant to try on a different size, instantly reorder, ask about reviews from other consumers and more.
Alexa will start to use her eyes
With the release of the Echo Show and other forthcoming devices, Amazon’s extensive investment in vision-based product recognition efforts through its Lab 126 is coming to fruition. It follows that Alexa will start to use the camera to disambiguate between possible purchases, particularly for grocery. This will be important in on-boarding new shoppers where the machine learning algorithms don’t have the shoppers’ history modeled or when ordering a new item. In addition, devices like Show will allow Amazon to better leverage its strength in analytics to cross-sell the customer in the same fashion as the website, by showing the ubiquitous: “Customers who bought this item also bought…” options, providing Amazon more control on margins and power in the market.
Tony Rodriguez, Chief Technology Officer of Digimarc Corporation
Tony Rodriguez has been an integral leader of innovation efforts at Digimarc since 1996. Rodriguez has twenty-five years of experience in computer science and image processing research and development and is the inventor on more than forty issued U.S. patents and ninety pending patents. Rodriguez is also the author of several published papers on the topic of digital watermarking. He has a bachelor’s degree in electrical engineering from the University of Washington and completed the AeA/Stanford Executive Institute program from Stanford Graduate School of Business.