Future of Retail - Part II - The Smart Store

JB continued after the short break, "I had a long day in office and by the time I finished work it was too late to visit the store. I was tired, not because I had a hard day at work, but because I was thinking about Mike and the store at Lee Road all day long. Have they figured out all my secrets? Do they know all my banking passwords? Have they hacked into my email account? What will be my experience in the store? Is it a trap? Such thoughts, and more, were going through my mind. I couldn’t sleep well that night. I knew "Better than Best Buy" stores open 6 a.m. in the morning. This is their USP to hold their leadership position in the market. I woke up at 4 a.m. and got out of home at 5 a.m. It was a Saturday and cloudy. I was prepared to wait at the parking lot till the shop opened. My family did not know when I got back the other night and when I left in the morning. I parked my car and saw it was 6:03 a.m. I got out and started walking to the store. As soon as I entered, a store representative approached me and said, "Good Morning Mr. JB, you are our first customer this morning." I smiled and looked at him, he seemed German by his looks, tall, well-built, handsome, and spoke with an English accent. I started walking inside but stopped short. How did he know I am JB ? He was walking alongside, I looked for a badge with a name but couldn’t see one. “Excuse me, what is your good name please ?”, I said. He stopped walking, turned around, looked at me and said, “You want to know my name ?”. I thought to myself, what is so difficult about my question that he needs to confirm, I just said, “Yes”. “My name is Albert”, he replied. There was an awkward silence for some time and then he said, “Shall we look around Mr. JB for your desired items?”, he asked. I was half expecting that he would know what I want but still asked him, “How do you know what I am looking for?” He replied, “My colleagues communicated to me your current interests”. I was getting a littler impatient now and said, “Look, I am not sure what you have been communicated but I have a lot of questions that I need answers to. I am not sure if you are the right person”. He nodded his head and said, “Okay, let me get you in touch with one our specialists, please follow me.”

Albert took me to a glass room that had a giant screen and said, “Please sit down and make yourself comfortable.” “Crap !”, I thought to myself, I need to wait here doing nothing for a specialist to show up and God knows when that will be as today is a Saturday. “How long do I need to wait?”, I asked. I made sure that my voice had a distinct tone of discontentment. “You don’t need to wait Mr. JB, I’ll put you in touch right now”, he told me with the same expressionless tone that he had been speaking with, ever since I arrived. He switched on the projector and dialled a number on the phone. I saw a phone ringing on the giant screen. The call got connected and a hawk-faced, clean-shaven gentleman appeared on the screen. “Good Morning PS, this is Mr. JB and he has some questions for you, is there anything you need from me?”, Albert asked the man on the screen. “Thank You Albert, you may leave, I’ll take over from here”, came the reply. Albert turned towards me and said, “It has been a pleasure Mr. JB, we appreciate your business, please call me if you need my assistance, thank you”. He nodded and left. I turned to PS, he was grinning at me, “He seems almost like a robot”, I said. “He is a robot Mr. JB, pat came the reply from the giant screen. I wanted to say something but didn’t know what to say, "Is he like what we we see in the Terminator series", I knew it was a foolish question and regretted asking. PS laughed aloud, "Well not exactly, he is not as advcanced as Arnold Schwarzenegger but a humanoid robot like him." I just kept looking at PS, “So, Mr. JB, you have a lot of questions right? I was requested by Mike to take all calls from the Lee Road store, and if it were you, then I needed to be the one answering your questions. Else, i could delegate the call to some other specialist. I am glad that you did not make me wait very long on a Saturday after I waited for you the whole day yesterday. Firstly, I must tell you I am impressed by how calm you are. Usually customers like you freak out in these situations”, PS was now smiling at me. “Well, I think it’s just that I don’t get surprised with surprises”, I tried to say something impressive, why should they have all the fun!"

PS laughed and continued, “Let me start from the top. 3 years ago, our CEO gave us a vision, a Smart Store with hundred percent automated operations, without compromising the customer experience. We have seen that 90% of sales above $5000 happen at the store and not online, 75% of the times items above $1000 sell when a store representative reaches the customer within 1 - 2 minutes of his reaching our big-ticket items isle. So, our business still needed store representatives in the smart store to maintain our sales volume. However, we couldn't have humans in the smart store. The only way that was possible was to have robots as store representatives. I was made the chief Architect of the programme. We have used advanced robotics, cognitive technologies, machine learning algorithms, internet of things and blockchain to build such a smart store."

"When you arrive within 500m of the store, our internet of things ecosystem identifies your mobile number and searches the customer database. If it finds a match, it feeds the mobile number to an artificial intelligence engine named 'DeLa', that pulls your data from various systems, including customer profile, past purchases, visit history, browsing history, life events and additional information available about the customer and and his family in the social media. These are the inputs that the engine then feeds to a deep learning system composed of a multi-layered artificial neural network. Each input is assigned a weight and the machine has its own weight determination process for every input parameter. Each layer extracts various features of the buying behaviour and interests. The results from each layer is passed onto the next layer to refine the features and ultimately provide an output that consists of 3 parts: the propensity to make a purchase during the visit, the probably items of interest and recommendation if a humanoid robot in the store should be directly assigned to the customer or not."

"If a humanoid robot is assigned, it pulls up the images associated with the customer, scans the visitors entering the store, uses visual recognition technology to identify the target customer and approaches him once he finds a match. It then uses the customer profile data and the outputs from 'DeLa', to have a personalized conversation with the customer. So, that should answer your question about how Albert recognized you on this visit. Do you have any question so far JB?", PS asked. I said "Yes, this deep learning system 'DeLa' or whatever you call it, how did you build it ?" PS replied,"It's actually simpler than what you think. We have been studying consumer behaviour for more than 2 decades now. We already have the statistical methods of classification, regression, clustering, decision trees etc. to identify various patterns that relate to customer buying behaviour. The challenge was that all these techniques catered to specific aspects. We did not have advanced techniques that can assimilate these specific behavioural aspects, arrange them in logical segments and filter through various conditions till we arrive on the prediction of your buying interest. Once the techniques evolved and our team of distinguished engineers devised the algorithms, the machines underwent various forms of supervised, unsupervised and reinforced learning to reach the maturity that they have today. They are not hundred percent accurate all the time, but they are near perfect most of the times. They undergo continuous learning with every transaction and adjust the weights and input parameters to align the neural networks with changing consumer behaviour patterns. They improve their cognitive reasoning abilities through the same pattern recognition techniques that a human brain does", PS paused.

I was now seriously impressed. However, I still had questions. I tried to keep a straight face and said,"OK, I understand all of that, but, how did you manage to transform these humanoid robots into humans?" PS smiled, "Yes that was difficult at the start but turned out to be quite simple at the end. We started off with design workshops, built a few prototypes, rejected all of them and were struggling for ideas. We needed to do something different. I started cycling to work at 6 a.m. every morning, stopped chasing my tail, and I don't have a lonng one anyway, and started to unlearn complex design patterns, diverse integrations, cool UIs. I learned to think simple. I thought let me see what we already have and what is the delta that we need to build. When I started to think in this manner, I got phenomenal results. Have you ever worked with 'LeeLa' JB?", PS asked. "You mean your chatbot on the web?", I asked. "You are absolutely right, I have been associated with 'LeeLa' ever since we released its beta version when it would just fetch you answers from a repository of curated content for the questions that you ask. 'LeeLa' has gone through the cognitive continuum of answering questions to managing human conversations. LeeLa has capabilities for natural language processing, speech recognition, personality insights, tone analyzer and various oher cognitive functions that are required for conversations. She has learned to learn, think and decide, just like what we do. So, I realized, that if I made minor modifications in 'LeeLa', I can have it as the brain for these humanoid robots, and then I would have a close-to-human store representative, and that's all we did JB!", said PS.

"Hey, but 'LeeLa' is not as matured as us, I mean, yes, she can hold simple conversations, but to engage with a customer in a store, understand his requirements, sort out his questions and to convince him for a sale, it is beyond 'LeeLa' at the moment", for the first time I sounded confident in the discussion. "You are absolutely right JB, 'LeeLa' still has a long way to go to be a human. Hence, 'LeeLa' calculates a confidence score for each and every response it provides to a customer. It does so by capturing a video of the customer response, that includes not just what the customer said, but also his facial expression, his gestures etc. The video is sent to another deep learning system called 'ReLa' that calculates a confidence score and tells 'LeeLa' if the customer was happy with the response provided. When it starts getting low confidence scores, the humanoid robots bring the customer to one such room as this, where the customer has a video conference with a human to do things that are beyond 'LeeLa' at the moment", PS stopped.

"Ah so just like on the website when the chatbot cannot answer a question it forwards it to a call centre agent", I blurted out. "You got it!", PS smiled. "On the website, 'ReLa' calculates confidence scores from the customer chat, in the store, 'ReLa' does so from the video of the customer. You seem to be lost JB, am I being too technical?", PS asked. "No, I am just thinking that you would have probably laid off more than half your staff with these humanoids and intelligent machines", I said. PS smiled and said, "On the contrary JB, we now have more human capital in the company than we had earlier. However, our people are doing different things today. They are not focussed on 'keep the lights on' kind of work. They are dedicated to using technology to improve our core competencies such as providing feedback to the manufacturers on product development, improving customer experience, identifying new customer segments and revenue streams, and of course, training and testing our decision science support systems like 'DeLa', 'LeeLa', 'ReLa', and other digital workers in our ecosystem, so that they can take better decisions every time. Everything else that is not a core competency, is either fully automated, semi automated or managed by a local partner for easier governance and administration. The primary focus of our human capital is to sustain our competitive advantage and realize continuous topline growth. The only challenge we have is to find better ways for the co-existence of humans and machines"", PS paused again.

"Well, PS, I must tell you, it sounds more like science fiction in action", I said. "No JB, this is augmented reality, and today it is there in every business, in every sphere of our lives. This is the progress of mankind. It was a dream come true when Man made cars and now it is a dream come true when Man made driverless cars. I think it is unfair to see that augmented reality came in existence in our generation. I would say it existed throughout our civilization, as Man augmented the quality of his life, generated after generation, and made things possible that were earlier deemed impossible."

"He is so true!", I thought to myself. "My last question PS, where do you use Blockchain in this context?", I was not sure if he had the patience to tell me more. PS smiled, "You have a good memory JB! So, when you make a purchase and in the need of a loan, our store representatives will enter your details in a system which will check your credit worthiness and the amount of loan that can be sanctioned. This is a standard service available with all retailers. However, if you confirm, and if you are a customer with one of our 10 banking partners, then the representative will log in to the distributed ledger that we share with your particular bank, and will make a transaction which will be available to both the bank and ourselves for accounting. This is a simple process that has been made possible by Blockchain technology that removes intermediaries and also eliminates the need of sharing customer and loan data back and forth with the bank. It provides greater security to your financial data, and benefits us, as well as the bank."

"Wow!", I couldn't resist putting my hands together. PS was smiling, "so you liked it JB, huh!". "Absolutely", I said, "I don't have words to describe the excellence that you guys have industrialized in your processes. Thank You for your time, I would now spend some time with Albert, have a great day." I disconnected the call. I went out of the room and joined Albert, allowed him to give me a tour of the latest products for the items that I wished to buy, bought a few items, took a loan and had a smooth checkout on the spot with Albert. There was no need to go stand in a queue. Every thing worked exactly as what PS had described. The clouds had subsided, both in my mind and in the sky. I was feeling very sleepy and decided to head home for a nice, long sleep.