Innovation: Copying Is The Sincerest Form Of Flattery

Innovation happens in two ways — the hard way and the easy way. The hard way involves insight, contemplation, inspiration, and the luck of the universe. Sir Alexander Fleming determined that dirty, dangerous mold could, in fact, if grown in a certain way, be the wonder drug penicillin. Sir Isaac Newton sat under a tree and, when an apple fell on his head, realized that what was missing in the current understanding of the universe was gravity. These "hard way" innovations are important, but unpredictable and infrequent.
So what's an industry to do? We, in retail, need innovation. We need to find ways to improve the customer experience, to decrease our costs, to improve our position as brands. Can we innovate in an easier way? Yes — we can copy. We can look to other industries and take what they have already innovated and bring it to retail.

Let's look at three outside innovations that could be game changers for retail: 3G cell phone telephony, cloud computing, and robotic software.

How Can The 3G Cell Phone Impact Retail?
In Japan and Korea, much more can be done on a phone than in the United States. There, people watch TV regularly, pay for items at vending machines, use GPS, do work, and do commerce on their phones. The phone, for many in Japan and Korea, has replaced the PC. The phone becomes the scanner. The phone becomes the mobile kiosk. The phone becomes the retail payment system.
Another innovation that will make its way to retail is cloud computing. What is the cloud? Cloud computing is using the computing power of the big guys (i.e. Google, Yahoo, Microsoft) to run your applications. Processing power and application software is pushed to the centralized servers. You can have a $199 laptop with very little software and run everything by logging on to the Internet and doing your applications online.

For retail, the cloud makes changing applications easier. It drops cost out of the system. It allows the retailer to manage less hardware. It pulls software out of the store. It may well allow the cost benefits of centralization with the flexibility of easily modifiable applications.

The last innovation is robotic software. In the past 50 years, the robot has made as much progress as humans did in our first 800,000 years. Robots can build cars better than humans. For example, just go to a Mercedes factory in Germany; you will find only a few humans. Robots can now be put in a room and, with their visual simultaneous localization and mapping software, figure out where they are plus or minus five centimeters.

How Will Robots Impact Retail?
Packaged goods can be recognized by robotic software by their packaging alone, no UPC required. No more bar code scanning, just the package, please. Scanning will change as more automation and less human involvement is possible at the front end. Shelf compliance will change, as shelves can be monitored for out of stocks from a distance, automatically. Shrink will go down. If cameras can recognize packaged goods from a distance, then fewer items will leave the store on the bottom of the basket. Sweethearting will be outdated. You didn't scan it? That's fine. We scanned it for you from the ceiling 20 feet away with a camera. This is possible today, and coming soon to a retailer near you.

So let's think about innovation. The "hard way" will happen in retail. Look at all the great technologies we invented: the bar code, the POS system, the format of retail itself. But the "easy way" will impact retail faster. Invention from other sectors will migrate to ours. Let's be ready. Let's take advantage of the invention and shape a more customer-focused, brand-conscious, lower-cost experience for our customers.