THE FUTURE IS JUST
AROUND THE CORNER
There's nothing like starting your morning by hearing that
you will soon be obsolete. That's what happened to me last week.
"Yep, we're a dying breed," announced Ralph (not
his real name, but it should be), who is the General Manager of a variety
of retail stores that I've owned and expanded in the last 35 years.
"If we don't adapt, we're going to be as extinct as dinosaurs,
milkmen and video rental stores."
He had just returned from The National Retail Federation's
trade show in New York. He slapped a pile of brochures and pamphlets on my
desk, and announced that our days are numbered.
"Well, we had a good run," I replied as I
casually perused the material about Artificial Intelligence (AI),
robotics, 3D printing, mobile apps, social media, virtual reality, and
countless other innovations I knew little about.
Obviously, this news wasn't a complete shock. Online sales
have been increasing every year since the advent of the internet, and
brick and mortar stores have been feeling the pinch. What was shocking was
the speed of the changes that are happening.
"Read the book 'The 4th Industrial Revolution,' "
Ralph suggested in that irritating tone when someone tells you to read a
book. "We don't have a lot of time."
I checked out the book, written by Klaus Schwab, and it
wasn't hard to grasp the point. I longed for the days of the first
non-industrial revolution, when we went from foraging to farming thanks to
the domestication of animals. I could handle that.
Or the first industrial revolution, which was inspired by the
invention of the steam engine and railroads. It lasted from 1760-1840,
plenty of time to make a few changes and adapt. Same with the 2nd, when
electricity and the assembly line allowed for mass production. Slow and
Even the 3rd Industrial Revolution, which began in the
1960's with the computer and culminated with the explosion of the internet
in the 1990's, gave us time. I happily evolved, moving from cash registers
to point-of-sale integrated systems where every piece of inventory is
tracked, along with sophisticated purchasing and accounting.
The 4th Industrial Revolution, however, which began not very
long ago with smartphones and mobile apps, is going to create more
obsolete professions than all of the others combined (think Uber and
driverless vehicles), and the trick is to not be one of them. It won't be
easy, because it's happening so fast.
It's one thing to shop online, which will continue to do its
damage. It's another for a customer to walk in a store, see a product that
is of interest, punch it into their phone, get comparison prices, and
order it remotely at the least expensive price and have it delivered by
drone to their home within hours. Not a good scenario for the brick and
mortar store, which might as well be renamed the blockhead store.
"Got any ideas?" I asked Ralph as I estimated
how much I would save by laying him off. "You spent three days in New
York---I hope you came up with something to stave off our
He went into a long speech about how retail needed to
become more entertainment oriented, how we needed to create loyalty, how
every store had to become a mini-community where people gathered in a
social setting, much like the proverbial coffee house.
"There will always be impulse shopping," he
added. "We've just got to make sure we maximize it."
He could tell he was depressing me. Desperate, he
flipped through the material he had gathered from the New York show and
pulled out his ace in the hole. "Meet Pepper," he announced.
A robot. Pepper is a robot that scoots around the sales floor
of your store and engages the customer with narrative on featured products
and helps them decide what to buy. It also gesticulates 17 different ways,
and can identify joy, sadness, anger or surprise from the customer and
"How much does Pepper cost?" I asked, already
hating the idea.
"You can lease him, or her, for about $500 per
month," Ralph responded. "It's the kind of thing we need to do
if we're going to adapt to the 4th Industrial Revolution."
I looked at Pepper's picture in the brochure. Cute
little thing. I wondered how he or she would react when I dumped the
brochure in the wastebasket. I know I felt joy.