Originally published by Inside Retail on 18 November 2024
In an increasingly competitive retail landscape – especially where physical-first retailers face pressure from pureplay e-commerce rivals – data and security have emerged as key strategic weapons.
“Consumer tendencies are changing,” explains Mahesh Krishnan, CTO at Fujitsu Australia and New Zealand. “They are looking at things like speed and convenience, and self-checkout has become commonplace in all supermarkets and convenience stores today. So how can we continue enhancing those outcomes for clients online?”
The answer is through deploying technology to gather data and store – in a way that complies with regulations – and finding a way to replicate offline, in-store experiences online, he continues.
Krishnan was speaking with Kenny Yeo, director of global cyber security advisory and head of Apac cybersecurity practice at Frost & Sullivan, during a podcast titled
Decoding the Future, where digital transformation was described as an enabler in helping retailers interact with customers across multiple channels of interaction, be it online or offline.
“As we look to the future of retail technology, particularly from a data and security lens, it’s crucial to remember that success lies in finding the right balance between innovation and responsibility,” asserts Krishnan.
“The retailers who will thrive are those who view security not as a constraint but as a fundamental enabler of consumer trust and business growth.”
“We live in a competitive age, and so many organisations do something similar,” adds Yeo. “So what is to stop a customer from jumping from us, Retailer A, to Retailer B? We have to be jealous of our customers and protective of our cybersecurity to prevent incidents from happening.”
Hyper-personalisation is exciting but relies on data
Yeo says hyper-personalisation is an exciting trend for retailers. “You and I want our retailer to know everything about us so that they can make recommendations. If I’m buying a particular t-shirt, maybe it offers me a pair of shoes that fit with that.”
Such hyper-personalisation requires data, the key plank in any retailer’s digital transformation journey.
“Fundamentally, data is the centrepiece for many things we are doing,” adds Krishnan. “We want to start collecting information about everything, individual preferences. Hyper-personalisation, shopping preferences, habits, all those things will be really important. So you’re going to start collecting a lot of data.”
Yeo says retailers face the challenge of collecting data without breaching any permissions.
“I believe all of us want as much personalisation, convenience, and fantastic outcomes as possible. On the other hand, how do we balance that with data and data privacy?”
Data privacy and protection should be at the forefront of all retailers’ minds – not just to ensure customer trust but to comply with government regulations worldwide. While this might make life difficult for retailers, on a macro level, it’s essential to protect businesses and consumers, says Yeo.
In-store security solutions can have a dual-purpose
In-store security, says Yeo, is vital for every retailer. Where once stores had security guards at exits, now gantries that detect RFID tags and video cameras commonplace – all to prevent theft.
“Every store would have some sort of CCTV setup to differing degrees of sophistication. It could be just simply for video recording for post-event analysis, or it could be real-time using computer vision.”
He believes AI-powered computer vision technology used to reduce shrinkage will help identify instances of customers swapping cheap items for expensive ones by changing labels. It can also be used to understand better how consumers shop in stores.
AI can help with interpreting video data, but the most effective solutions use multiple tools: “It’s a combination of gantry technology, computer vision, and self-service terminals all working together. The outcome is still the area of focus that retailers should look at: they want to provide speed and convenience. They want to [help] the guy in a rush get in and out of the store as fast as possible.”
Computer vision, an enabler
Besides reducing shrinkage, computer vision is helping retailers optimise sales to various demographic groups in stores – even without deploying controversial facial recognition technology.
According to Yeo, retailers can use computer vision to identify a customer’s age or demographic range. For example, it may detect a teenager looking for a particular item in a store, and AI can use that information to change a digital display to highlight the categories that customers might like or a special offer. A retiree might be looking for something different, so again, computer vision could detect that and dynamically change the displays in the store.
“Facial recognition – identifying me when I am in a store without my permission – that’s a no. All of us will be freaked out if that does happen.”
Implementing this technology may be a challenge for some retailers, but there is certain value from a customer’s perspective. “I want that hyper-personalisation and think computer vision allows us to bridge the gap. You can get a sense – not so much of the individual – but of who the persona is so that they can influence that persona,” says Yeo.
Fujitsu has implemented Consumer Behaviour Analysis in around 75 stores for Aeon Retail in Japan. Each store has close to a hundred cameras, allowing management to monitor foot traffic through the store and then map out where people are spending more time – without any facial recognition component. “If they are reaching for things off a shelf, we can create a heat map in terms of the areas in the aisles and the shelves where people are picking things up,” says Krishnan.
These kinds of tools can help the retailer understand the customer’s behaviour when selecting an item off a shelf and placing it in their trolley – or putting it back after inspection.
The cameras and software help retailers optimise the positioning of particular products or brands within a store, which can boost a retailer’s revenue because brands may be willing to pay a premium for better positioning within the store.
“We are in a world where customer behaviour is changing and will continue to change as the new set of consumers come in,” says Yeo. “Our teenagers are going to go to work and they’re going to start spending money, and they are going to be the next generation of people that use retail stores. That means stores and retailers need to continue to innovate. They need to continue to embrace digital technologies and a digital mindset.
Technologies such as computer vision, anti-theft, and self-service counters – can only come together when retailers adopt a digital mindset. “Retailers have to embrace that change. Consumers are changing, and our technology has to change with it,” says Yeo.
• Listen to the podcast on the Website, Youtube or Spotify to hear Krishnan and Yeo talk more about monitoring shoppers’ in-store behaviour, how Fujitsu’s LiDAR technology can enhance understanding of that behaviour, how computer-vision technology can create relevant recommendations to shoppers in stores, and why cyber security is an essential consideration for any retailer today.
