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| Kang Hak-dong |
The number of smart devices in your home, on your body and around your office is increasing every day. By 2020, there could be as many as 30 billion devices hooked up to the so-called Internet of Things, or IoT.
Presumably, this massive network of gadgets, household appliances and even jewelry, will know a lot about your life. A wristband for your smartphone, for example, might take your vital statistics, which would be transmitted to your doctor in nearly real-time. If your blood pressure is high, the doctor could instantly order a prescription for you, which might be delivered to your door within 24 hours. The information gathered by the IoT will probably change no less than how we eat, date, study, work, talk, exercise, travel and shop.
As far as business goes, few industries will be more profoundly affected by the IoT than the retail sector. Some people may abandon brick-and-mortar shopping completely. Others will use applications to help them spend their money more strategically.
Ahead of the upcoming Thanksgiving holiday in the United States, there are a number of services to reduce the stress of shopping. Black Friday and Cyber Monday became a shopping event that is attracting attention not only in the U.S., but also around the world. Stitch Fix, for example, an online “personal styling service” tries to gather as much information about the customer’s personal taste as possible and sends boxes of clothes or accessories every month based on each customer’s style.
Watson, a cognitive system designed to read and understand large amounts of data, and then find answers to almost any question posed in natural language, could be a game changer in this arena. Watson already proved itself when it competed (and won) against “Jeopardy!” champions back in 2011. Since then it’s been embraced by the health care, travel and financial services industries, among others, and is now putting its stamp on retail by helping retailers get insights faster and make them scalable across the organization.
North Face, an outdoor equipment retailer, is experimenting with Fluid on a Watson-based shopping concierge. Instead of randomly searching through pages of merchandise for a snow tent, an online shopper could tell Watson that he or she is planning to camp in Vermont in February, for example. Watson could immediately anticipate the camper’s needs, likely suggesting supplies for the trip that hadn’t even occurred to them.
In the case of Korea, there are movements from the local fashion industry to implement big data analytics to cope with the so- called “fast fashion” of foreign SPA brands. Uniqlo, Zara and H&M are the three major SPA brands that account for one-third of the overall local SPA market. The industry urges for a new marketing strategy based on big data to find a solution by leveraging various trends in the fashion market.
Watson’s ability to understand natural language, read and understand vast amounts of data, and then engage a consumer by answering questions with relevant personalized responses has the potential to change how consumers engage with their favorite brands to buy products and services.
This isn’t just a way to get people to spend more money ― it’s a way to help customers get exactly what they need, and at the same time, gain a better understanding of each customer’s interests.
Retailers are about to get hit with a tidal wave of data. The use of cognitive systems such as Watson could guarantee an easier, more profitable relationship with customers. In order to get there, retailers must foster those relationships now. Consumers, on the other hand, are about to witness the golden age of retail. The beauty of this new era is that the only thing that is asked of consumers is that they be willing to share what they want. Given the benefits, it seems a fair trade.
Regarding the importance of IoT to both retailers and consumers, it is becoming more important than ever for the upcoming shopping season.
By Kang Hak-dong
Managing partner of global business services, IBM Korea
