Category Archives: Consumer

Wi-Fi 6: is it really that much faster?


Illustrator by Alex Castro / The Verge

The next generation brings more than just faster speeds

By Jacob Kastrenakes, Reports Editor for The Verge | @jake_k |  Feb 21, 2019, 9:45am EST

 

Wi-Fi is about to get faster. That’s great news: faster internet is constantly in demand, especially as we consume more bandwidth-demanding apps, games, and videos with our laptops and phones.

But the next generation of Wi-Fi, known as Wi-Fi 6, isn’t just a simple speed boost. Its impact will be more nuanced, and we’re likely to see its benefits more and more over time.

This is less of a one-time speed increase and more of a future-facing upgrade designed to make sure our speeds don’t grind to a halt a few years down the road.

Wi-Fi 6 is just starting to arrive this year, and there’s a good chance it’ll be inside your next phone or laptop. Here’s what you should expect once it arrives.

What is Wi-Fi 6?

Wi-Fi 6 is the next generation of Wi-Fi. It’ll still do the same basic thing — connect you to the internet — just with a bunch of additional technologies to make that happen more efficiently, speeding up connections in the process.

How fast is it?

The short but incomplete answer: 9.6 Gbps. That’s up from 3.5 Gbps on Wi-Fi 5.

The real answer: both of those speeds are theoretical maximums that you’re unlikely to ever reach in real-world Wi-Fi use. And even if you could reach those speeds, it’s not clear that you’d need them. The typical download speed in the US is just 72 Mbps, or less than 1 percent of the theoretical maximum speed.

But the fact that Wi-Fi 6 has a much higher theoretical speed limit than its predecessor is still important. That 9.6 Gbps doesn’t have to go to a single computer. It can be split up across a whole network of devices. That means more potential speed for each device.

Wi-Fi 6 isn’t about top speeds

Instead of boosting the speed for individual devices, Wi-Fi 6 is all about improving the network when a bunch of devices are connected.

That’s an important goal, and it arrives at an important time: when Wi-Fi 5 came out, the average US household had about five Wi-Fi devices in it. Now, homes have nine Wi-Fi devices on average, and various firms have predicted we’ll hit 50 on average within several years.

Those added devices take a toll on your network. Your router can only communicate with so many devices at once, so the more gadgets demanding Wi-Fi, the more the network overall is going to slow down.

Wi-Fi 6 introduces some new technologies to help mitigate the issues that come with putting dozens of Wi-Fi devices on a single network. It lets routers communicate with more devices at once, lets routers send data to multiple devices in the same broadcast, and lets Wi-Fi devices schedule check-ins with the router. Together, those features should keep connections strong even as more and more devices start demanding data.

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Wi-Fi’s weird naming scheme:

Until recently, Wi-Fi generations were referred to by an arcane naming scheme that required you to understand whether 802.11n was faster than 802.11ac, and whether 802.11ac was faster than 802.11af, and whether any of those names were just made up nonsense. (Answer: sort of.)

To fix that, the Wi-Fi Alliance decided to rename Wi-Fi generations with simple version numbers. So the current generation of Wi-Fi, 802.11ac, turned into Wi-Fi 5. This new generation, previously called 802.11ax, is now Wi-Fi 6.

You probably won’t hear the Wi-Fi 5 name used very much since it’s been around for five years and just got that name in October 2018. For Wi-Fi 6, you might see the 802.11ax name here and there, but companies largely seem to be on board with using the simplified naming scheme.

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Okay, so how fast is each device?

Unfortunately, there’s no easy answer here.

At first, Wi-Fi 6 connections aren’t likely to be substantially faster. A single Wi-Fi 6 laptop connected to a Wi-Fi 6 router may only be slightly faster than a single Wi-Fi 5 laptop connected to a Wi-Fi 5 router.

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The story starts to change as more and more devices get added onto your network. Where current routers might start to get overwhelmed by requests from a multitude of devices, Wi-Fi 6 routers are designed to more effectively keep all those devices up to date with the data they need.

Each of those devices’ speeds won’t necessarily be faster than what they can reach today on a high-quality network, but they’re more likely to maintain those top speeds even in busier environments. You can imagine this being useful in a home where one person is streaming Netflix, another is playing a game, someone else is video chatting, and a whole bunch of smart gadgets — a door lock, temperature sensors, light switches, and so on — are all checking in at once.

The top speeds of those devices won’t necessarily be boosted, but the speeds you see in typical, daily use likely will get an upgrade.

Exactly how fast that upgrade is, though, will depend on how many devices are on your network and just how demanding those devices are.

How do I get Wi-Fi 6?

You’ll need to buy new devices.

Wi-Fi generations rely on new hardware, not just software updates, so you’ll need to buy new phones, laptops, and so on to get the new version of Wi-Fi.

To be clear: this is not something you’ll want to run out to the store and buy a new laptop just to get. It’s not that game-changing of an update for any one device.

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Instead, new devices will start coming with Wi-Fi 6 by default. As you replace your phone, laptop, and game consoles over the next five years, you’ll bring home new ones that include the latest version of Wi-Fi.

There is one thing you will have to make a point of going out and buying, though: a new router. If your router doesn’t support Wi-Fi 6, you won’t see any benefits, no matter how many Wi-Fi 6 devices you bring home. (You could actually see a benefit, though, connecting Wi-Fi 5 gadgets to a Wi-Fi 6 router, because the router may be capable of communicating with more devices at once.)

Again, this isn’t something worth rushing out and buying. But if your home is packed with Wi-Fi-connected smart devices, and things start to get sluggish in a couple years, a Wi-Fi 6 router may be able to meaningfully help.

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What makes Wi-Fi 6 faster?

There are two key technologies speeding up Wi-Fi 6 connections: MU-MIMO and OFDMA.

MU-MIMO, which stands for “multi-user, multiple input, multiple output,” is already in use in modern routers and devices, but Wi-Fi 6 upgrades it.

The technology allows a router to communicate with multiple devices at the same time, rather than broadcasting to one device, and then the next, and the next. Right now, MU-MIMO allows routers to communicate with four devices at a time. Wi-Fi 6 will allow devices to communicate with up to eight.

You can think of adding MU-MIMO connections like adding delivery trucks to a fleet, says Kevin Robinson, marketing leader for the Wi-Fi Alliance, an internationally backed tech-industry group that oversees the implementation of Wi-Fi. “You can send each of those trucks in different directions to different customers,” Robinson says. “Before, you had four trucks to fill with goods and send to four customers. With Wi-Fi 6, you now have eight trucks.”

The other new technology, OFDMA, which stands for “orthogonal frequency division multiple access,” allows one transmission to deliver data to multiple devices at once.

Extending the truck metaphor, Robinson says that OFDMA essentially allows one truck to carry goods to be delivered to multiple locations. “With OFDMA, the network can look at a truck, see ‘I’m only allocating 75 percent of that truck and this other customer is kind of on the way,’” and then fill up that remaining space with a delivery for the second customer, he says.

In practice, this is all used to get more out of every transmission that carries a Wi-Fi signal from a router to your device.

Wi-Fi 6 can also improve battery life

Another new technology in Wi-Fi 6 allows devices to plan out communications with a router, reducing the amount of time they need to keep their antennas powered on to transmit and search for signals. That means less drain on batteries and improved battery life in turn.

This is all possible because of a feature called Target Wake Time, which lets routers schedule check-in times with devices.

It isn’t going to be helpful across the board, though. Your laptop needs constant internet access, so it’s unlikely to make heavy use of this feature (except, perhaps, when it moves into a sleep state).

Instead, this feature is meant more for smaller, already low-power Wi-Fi devices that just need to update their status every now and then. (Think small sensors placed around a home to monitor things like leaks or smart home devices that sit unused most of the day.)

Wi-Fi 6 also means better security

Last year, Wi-Fi started getting its biggest security update in a decade, with a new security protocol called WPA3. WPA3 makes it harder for hackers to crack passwords by constantly guessing them, and it makes some data less useful even if hackers manage to obtain it.

Current devices and routers can support WPA3, but it’s optional. For a Wi-Fi 6 device to receive certification from the Wi-Fi Alliance, WPA3 is required, so most Wi-Fi 6 devices are likely to include the stronger security once the certification program launches.

Wi-Fi 6 is just getting started

Devices supporting Wi-Fi 6 are just starting to trickle out. You can already buy Wi-Fi 6 routers, but so far, they’re expensive high-end devices. A handful of laptops include the new generation of Wi-Fi, too, but it’s not widespread just yet.

Wi-Fi 6 will start arriving on high-end phones this year, though. Qualcomm’s latest flagship processor, the Snapdragon 855, includes support for Wi-Fi 6, and it’s destined for the next wave of top-of-the-line phones. The Snapdragon 855’s inclusion doesn’t guarantee that a phone will have Wi-Fi 6, but it’s a good sign: Samsung’s Galaxy S10 is one of the first phones with the new processor, and it supports the newest generation of Wi-Fi.

The inclusion of Wi-Fi 6 is likely to become even more common next year. The Wi-Fi Alliance will launch its Wi-Fi 6 certification program this fall, which guarantees compatibility across Wi-Fi devices. Devices don’t need to pass that certification, but its launch will signify that the industry is ready for Wi-Fi 6’s arrival.

Correction February 22nd, 2:10PM ET: WPA3 security is a requirement for Wi-Fi 6 certification, but it may not be included in uncertified devices.

2019 sports industry game-changers

Pete Giorgio

Pete Giorgio, principle with Deloitte Consulting LLP, leads Deloitte’s US Sports practice

Sports trends expected to disrupt and dominate

Like most other industries, sports are being disrupted by technology advancements and cultural changes. How can sports executives capitalize on these industry changes in 2019? Our annual report explores eight trends that could redefine the sports industry in the year ahead.

 

Our starting lineup for 2019

2018 was an exciting year for sports. France beat out Croatia in a goal-filled match to win the World Cup. Simone Biles took home six medals at the world championship. The Red Sox won their fourth World Series title in 15 years. And the Capitals took home the Stanley Cup for the first time in team history.

Off the field, we’ve seen athletes grow as spokespeople for causes, front offices overhauled to bring in even more analytical rigor, and streaming media options grow in prominence. What trends will we be scouting this year? Our 2019 sports industry outlook covers eight trends to watch:

 

sports and digital icons

Athletes as content creators

Gone are the days of sports fans needing reporters to get news about their favorite players. Over the past few years, athletes are increasingly becoming content creators in their own right—be it through Instagram, Twitter, or long-form stories on websites like The Players’ Tribune.

While the athlete’s role as an individual content creator serves as a small complement to traditional media, this trend—buoyed by stars who were raised in the digital age—could become even more impactful and important in the coming years. This platform will enable further expansion and value of personal brands while also opening the door for the next generation of athletes to build their brands before they become household names.

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“The fewer barriers there are between athletes and fans, the more commercial opportunities that will materialize. The value in having fans relate to their favorite players is immeasurable.”

Brian Finkel, Deloitte Sports Research, Deloitte & Touche LLP

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virtual reality headset

Augmented and virtual reality

As technology advances, the challenge of keeping fans constantly engaged has become more and more difficult. Any lull in the game leads to fans diverting their attention to their phones and consuming content from other venues.

However, the growing integration of augmented and virtual reality is transforming the customer experience by giving fans the opportunity to get “closer” to athletes while having a single platform to access a wealth of data. While there are still some kinks that need to be worked out, this is a time where prioritization of customer experience is at an all-time high.

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“VR brings the best of the stadium into the home, while AR brings the best of home into the stadium.”

Allan Cook, digital reality leader, managing director, Deloitte Consulting LLP

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football plays on a chalkboard

The offensive revolution

Few ideas are as widely accepted among sports fans and players as the old adage that offense sells tickets, but defense wins games. As we watch shootout after shootout across professional sports, during the regular season and the playoffs, analysts are beginning to wonder whether times have officially changed.

While viewership numbers are up, purists question whether such a focus on offense has impacted the integrity of the games they love. This presents teams with a tough decision to make: Do they keep investing in offense and hope that’s enough? Or do they consider strategic defensive investments that will enable them to play a different game to compete in both the arena and in the market?

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“While increasing offense intends to sell more tickets, leagues will have to balance offense with maintaining the value of defensive skill and the historical backdrop of their sport.”

Lee Teller, specialist leader, Deloitte Consulting LLP

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sports betting app

Sports betting trends

What happens in Vegas no longer needs to stay in Vegas. With states now free to choose whether to legalize sports betting or not, many key stakeholders see opportunities to monetize, while others raise concerns about the impact legalized gambling could have on the integrity of the game, and federal and state governments consider their roles and legislative next steps.

Not only will betting impact the relationship between leagues, gambling institutions, data providers, and the government, it’s already changing the way fans can interact with games. The NBA recently announced an offering that allows fans to stream the fourth quarter of a game for $1.99. While convenient for the busy fan who is only able to watch part of a game, this is particularly notable for gamblers staking bets on real-time game lines who want to watch critical moments in the games they bet on.

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“September 2018 marked the first month of online sports betting dominance in New Jersey. With results from recent months, this trend has and will continue to be the dominant theme for the foreseeable future.”

Jamie Poster, manager, Deloitte & Touche LLP

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bubble map of sports icons

Tackling mental health

The past few years have seen an increasing number of high-profile athletes, storied franchises, and top programs publicly address a topic that affects both MVPs and weekend warriors: mental health. Many stars have offered a glimpse behind the curtain of endorsements and champion podiums into lives affected by symptoms of depression, anxiety, and other mental health conditions.

With one in four people worldwide affected by mental or neurological disorders during their lives, the notion that handsomely paid and highly visible athletes are willing to shed light on a topic historically burdened with a negative stigma is both a positive movement and refreshingly relatable. With each athlete that comes forward, it becomes increasingly apparent that the sports world’s investment in mental wellness is only just the beginning.

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“Mental health is more than a hot-button societal issue, it has the opportunity to become a key long-term competitive advantage for the teams and countries that effectively engage, support, and work with their athletes.”

Ramya Murali, senior manager, Deloitte Consulting LLP

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soccer players and goalie

European soccer reaches America

Every two years, soccer’s popularity in America spikes as fervor surrounding the World Cup spreads throughout the nation. However, recent polling points not just to cyclical interest but long-term, sustained growth. Soccer is now the second-most-played youth sport in America and more Americans between the ages of 18 and 34 name soccer as their favorite sport over baseball.

European nations have taken note of this rise and are seeking to capitalize. The English Premier League inked a deal with NBC Sports in 2015 reportedly worth a billion dollars to stream its games to American households. And investments extend to human capital as well: European clubs are increasingly looking to young Americans to fill their rosters.

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“The US market provides a massive marketing, financing, and talent opportunity for European soccer—from traditional powerhouses to lower division teams looking to regain relevancy.”

Sam Ebb, senior consultant, Deloitte Consulting LLP

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phone and video game controller icon

eSports

With the vast audiences drawn to eSports and the increasing direct ties to professional leagues, we’ve seen players, executives, and owners jumping into the arena as team owners and avid gamers, as well as a way to continue to connect with teammates and fans off the court. As leagues look to continue building and expanding their fan bases, their eSports presence will be a major part of those interactions.

Over the coming year, we expect teams and leagues will continue to embrace eSports as a part of the existing major sports leagues, including efforts to integrate eSports opportunities into the existing sports experience, from eSports lounges in Topgolf facilities to an eSports arena in the Real Madrid’s new stadium.

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“The eSports landscape continues to stabilize around the maturation of teams and leagues and increasing sponsor engagement.”

Kat Harwood, senior manager, Deloitte Consulting LLP

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bar graph and pie chart

Personalizing fan engagement

While organizations have always collected data from season ticket holders, fan loyalty programs, and other fan engagement sources, many teams house this data in disparate databases and siloed customer-relationship management systems. These organizations, though, are starting to think about the fan holistically, requiring a centralization of these touchpoints into a single source of truth that can drive deeper, more personalized fan engagement—inside and outside of the stadium.

As sports teams and leagues build on and incorporate the successes of the e-commerce revolution, they’ll be able to connect all dots of a single fan’s journey, helping to sell additional tickets while also driving personalized connections and experiences that can increase the lifetime value of fans. Over the next year, we believe organizations will adapt their marketing functions to leverage fan data and become even more nimble and automated.

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“A key question for teams remains who is in each seat, but more importantly, focus is shifting to who engages with the brand inside and outside the venue?”

Chad Deweese, manager, Deloitte Consulting LLP

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Download the full report to learn more

 

Take a look back at previous years’ reports:

2018 sports industry trends

2017 sports industry trends

2016 sports industry trends​

 

Let’s talk sports industry trends

We believe these topics are going to impact the business of sports, both on and off the field, over the next 12 months. But invariably new stories, trends, and themes will emerge that further disrupt the industry, derail the game plan for executives, and delight us as sports fans. Please tweet #DeloitteSports to share the sports trends or opportunities that are on your mind in 2019.

football field

Get in touch

Pete Giorgio

Pete Giorgio
US Leader | Sports

pgiorgio@deloitte.com

Pete, a principal with Deloitte Consulting LLP, leads Deloitte’s US Sports practice, serving multiple sports clients including the United States Golf Association, NBA, United States Tennis Association… more

One of the world’s largest advertisers is calling for tech companies to do better


Marc Pritchard speaks on stage during the 2019 #SeeHer Creative And Media Leaders Summit
at Viacom Building in New York on March 29, 2019. 
Roy Rochlin / Getty Images file

By Claire Atkinson, Senior Media Editor at NBC News  @claireatki   April 11, 2019, 4:23 PM PDT

“We need to begin charting the course in a different way going forward,” Marc Pritchard, the chief brand officer of P&G, said Thursday.

 

Just two days after government hearings on how hate speech proliferates on social media, one of the world’s largest advertisers said it is reviewing how and where it spends its ad dollars.

Marc Pritchard, the chief brand officer of P&G, which spends billions of dollars per year on advertising, said Thursday that the continued problems of social media have created the need for change.

“Digital media continues to grow exponentially, and with it, a dark side persists,” he said during a speech before about 800 advertising executives who had assembled in Orlando, Florida, for the annual meeting of the Association of National Advertisers, or ANA, a major trade group representing the advertising industry.

“Privacy breaches and consumer data misuse keeps occurring,” Pritchard said. “Unacceptable content continues to be available and is still being viewed alongside out brands. Bad actors are finding ways to create divisiveness and social unrest.”

Pritchard’s speech adds to growing pressure from politicians, activists and consumer advocates for tech companies to do more to address issues including the spread of hate speech, algorithmic bias and government-backed manipulation.

While advertisers have in recent years grown more comfortable criticizing the major tech companies, Pritchard’s words were some of the strongest yet and included a warning that some changes were already underway.

“We need to begin charting the course in a different way going forward,” he said, noting that the consumer goods giant was forming “new partnerships with entirely new platforms and media companies that prove from the very start that their content is safe and under their complete control.”

P&G was the biggest spender on Facebook in 2018, according to data from marketing analytics company Pathmatics. Moving forward, Pritchard said the firm preferred to spend its ad dollars with those who “enable common sense moderation of comments,” versus, “disproportionately amplifying controversy or worse, hate.”

U.S. tech have faced mounting scrutiny — particularly Facebook, Twitter and Google-owned YouTube — and rely on advertising for the majority of their revenue. While the companies have faced some small advertiser boycotts in recent years, there have been few signs of a broad pullback by marketers.

Raja Rajamannar, chief marketing and communications officer for Mastercard, told NBC News he agreed with Pritchard and that major advertisers bore responsibility for pushing tech companies to change.

“We have a significant purchase power as an industry,” Rajamannar, who is also the president of the World Federation of Advertisers, said “The key thing, we have to be able to work to develop with the platforms and keep working towards a solution. This is something we as marketers care about very deeply and if it’s not happening we’ll have to keep relooking at our space.”

Bob Liodice, chief executive of ANA, said that companies including P&G are discussing the creation of norms that would hold social media companies to a set of standards around privacy and civility.

Another group, the World Federation of Advertisers, a global trade association for advertisers, issued a statement in late March at a global marketer conference calling on members and brands to take action and, “to put pressure on platforms to do more to prevent their services and algorithms from being hijacked by those with malicious intent.”

Facebook has made a series of announcements about new programs and changes meant to address the issues on its platform. While the company has at times pushed back against certain critiques, it welcomed Pritchard’s comments.

“We applaud and support Marc Pritchard’s sentiments for again making a bold call for our industry to collectively do more for the people we serve,” Carolyn Everson, Facebook’s vice president of global marketing solutions, said in an email. “We continue to invest heavily in the safety and security of our community and are deeply committed to ensuring our platforms are safe for people and safe for brands.”

Delivery robots are poised to invade our cities, but are we ready for them?


Photo credit: FedEx

John R. Quain

John R. Quain, Contributor to Digital Trends @jqontech Posted on 04.14.19 – 1:00AM PST

 

Gaggles of delivery R2D2’s scurrying down suburban streets? It sounds like a technological nightmare worse than an e-scooter infestation. But the concept of robot messengers got a major boost recently when FedEx announced plans to start testing such a service this summer, and for smart cities, it may not be such a crazy idea after all.

There are already several pilot robo-delivery projects running in the U.S.

Nuro, for example, recently announced it’s moving on from Arizona and expanding its delivery partnership with grocery giant Kroger to four Houston zip codes. Nuro’s vehicle is more of autonomous compact car than a rolling robot, but so far people seem happy to pay the roughly $6 for the self-driving silver surfer (probably because they don’t have to tip the car).

Nuro Delivery Robot
Nuro

The 7,000-pound gorilla in retail, Amazon, is reportedly testing a sidewalk-crawling delivery bot in Seattle. The project looks like a more practical service for suburbs — especially compared to drones, which are restricted or outright banned in many urban areas.

Most recently, FedEx has announced that it plans to begin testing its own autonomous delivery robot in Memphis, Tennessee. And while there are other delivery bot tests underway in addition to the ones mentioned, the entrance by the preeminent delivery service in the U.S. into the self-driving space represents something of a milestone.

Hitting the streets sidewalks

FedEx isn’t talking about autonomous vans and trucks — at least not yet. And the challenges facing even mainly on-the-sidewalk robots are legion. Weather, uneven terrain, traffic, poor cellular network coverage, and humans behaving badly are just a few of the headaches facing programmers. However, FedEx’s partners and its own delivery infrastructure imply that it may be uniquely positioned to overcome those obstacles.


The delivery bots, for example, are designed in partnership with Dean Kamen’s DEKA Development & Research Corp. Kamen is best known for developing the Segway and the iBot Personal Mobility Device, a wheelchair that can climb stairs. The latter demonstrates that DEKA’s engineering skills will probably be able to help FedEx surmount some of the navigation issues for door-to-door delivery. Indeed, the fully electric FedEx SameDay Bot is based on the iBot, with some additional technology that makes it autonomous, including lidar, radar, and video cameras to assist in navigation.

According to Kamen, the SameDay bot can run at about 10 miles per hour, “which won’t disturb pedestrians.” Kamen made the remarks during a presentation to announce the new partnership. The inventor said the SameDay Bot’s speed limiter means it won’t cause the kinds of problems associated with cyclists and messengers who hop onto sidewalks — but it will still be able to handle round trips of up to eight miles relatively quickly.

The road ahead

FedEx plans to work with retailers including AutoZone, Lowe’s, Pizza Hut, Target, Walgreens, and Walmart to perform, as its robot’s name implies, same-day door-to-door deliveries. Customers can open the bot using a smartphone app, or have it opened by a remote operator. Those operators will also control the bots should the machines encounter situations they don’t recognize.

robot delivery dog ces 2019 continental pp cube robodogs
Continental’s delivery robot concept

“It’s a way they could take on Amazon,” Gary Goralnick, a shopping center developer, told Digital Trends regarding self-driving technology. Goralnick said integrating online ordering and same-day delivery, for example, has helped brick and mortar retailers turn the corner and compete against Internet-only outlets.

Still, others note that such self-driving solutions beg for an infrastructure solution.

“You have to redesign the city before you layer in the technology,” Duncan Davidson, a technology investor with Bullpen Capital, told Digital Trends. Davidson pointed to examples such as e-scooters causing problems in Los Angeles and Uber cars causing additional congestion in New York City as ways in which technology can wreak havoc in cities — unless it’s supported by the right infrastructure changes.

None of these robo-delivery services will work unless consumers embrace the concept

Autonomous cars and delivery vehicles, for example, may need their own dedicated lanes. Making such changes could improve safety and help reduce traffic. And there are many ways in which same-day delivery in underserved areas could help home-bound individuals who suffer from chronic illnesses or other restrictions that prevent them from getting outside.

Indeed, Hyundai has a program called Elevate to develop an autonomous vehicle that can navigate rough terrain and even climb stairs to reach customers. And Dean Kamen’s iBot was originally designed to help people such as disabled veterans get around on their own. (The partnership with FedEx should help make the iBots more affordable for those who need them, according to Kamen.)

Ultimately, none of these robo-delivery services will work unless consumers embrace the concept. As long as they steer clear of scary robots, like Boston Dynamics’ headless Spot Mini, and focus on friendly delivery devices that look like R2D2, it may just work out.

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Digital-Native Retailers Are Giving Physical Stores a Radical Makeover


Photograph by Thomas Barwick

By Flavio Palaci, Ramy Sedra, and Anand Rao all from PwC  January 18, 2019

Online brands are opening brick-and-mortar shops, using technology and data-driven customer insights to transform the in-store experience.

 

On Black Friday in 2018, online spending in the U.S. leapt 24 percent from the previous year. By contrast, in-store sales fell by 7 percent and footfall was down 9 percent. These numbers might give the impression that brick-and-mortar stores are losing relevance with consumers, but several successful online-only retailers are actually opening physical shops — and traditional brands can learn from them by looking at why and how they’re doing it.

There are many reasons for online-first retailers to add an offline presence. For one thing, physical retail still accounts for about 85 percent of global business-to-consumer commerce. And although digital retail is growing, so is in-store retail. PwC’s 2019 Global Consumer Insights Study — to be released soon — shows that 24 percent of consumers regularly used mobile to shop in 2018, compared with 11 percent in 2014, and 49 percent regularly shopped in a physical store in 2018, versus 36 percent in 2014. Stores allow consumers to experience and engage with a brand, its products, and its culture. Buying in a store is also sometimes faster and more convenient than online shopping. And new technologies enable retailers to gather insights from in-store video and audio data in ways that have never before been possible. Finally, physical stores provide online retailers with local distribution centers for their products.

Digital natives apply their pioneering spirit to the physical world, using their inherent data-led knowledge of customer behavior and their comfort with technology to rethink and remake the experience shoppers have in their stores. And they’re showing the way forward for some of the savviest older retailers and brands. Here are some of the lessons bricks-first retailers are picking up from their digital-first peers.

Create a frictionless store. Online retailers have to focus on user experience and customer journeys to succeed. Shoppers are easily distracted from an online purchase by the ping of an arriving email or a flurry of social media likes. Each click away from the page could cause them to ditch their carts, so e-commerce strives to be as frictionless and engaging as possible.

And now, some online retailers are applying the same thinking to physical stores. Amazon Go grocery stores, for example, have resolved a major pain point: the checkout. Instead of paying traditionally, customers scan their Amazon Go app as they enter, their purchases are recorded by sensors throughout the store that are supported by artificial intelligence (AI) and radio-frequency identification (RFID), and their accounts are automatically charged when they leave.

Amazon is considering placing Go stores in the lobbies of office buildings and in airports. This fits with a growing trend for “microtrip” shopping, or short trips that take less than five minutes. According to PwC’s study, one-quarter of consumers make trips like these once or more per day.

Another point of friction for customers is not knowing whether the items they need will be in stock at a physical store. Canadian online fashion retailer Ssense has solved this problem. Its shoppers can browse 20,000 products online, and the ones they’d like to try on are then shipped from warehouse to store within an hour.

Use data to add a personal touch. Digital-native retailers are data-centric, and as a result have been able to disrupt brick-and-mortar shopping by being better at predicting customer needs and wants. In some cases, their insights reveal that customers want to see and use products in real life.

Online mattress retailer Casper announced last summer that it would open 200 stores across the U.S., after finding that sales grew more quickly in areas where it had operated temporary stores. A physical presence in a busy location can be a powerful marketing tool, too. Casper CEO Philip Krim told the Wall Street Journal the company’s stores make the brand visible, which is helpful because acquiring customers online has become more competitive and expensive.

Traditional retailers are also using data to get to know their customers better. Nike, for example, has spent a decade building its NikePlus membership program. It now has data not only on its members’ tastes in clothes and shoes but also on their exercise habits. It uses that data to curate stock at its Nike Live concept store in Los Angeles, and to offer personalized advice to ensure members have the best kit for their fitness goals.

The lessons from the Nike Live store have been used at the company’s New York flagship, where the “Speed Shop” department stocks merchandise based on online sales in the store’s postal code. And getting back to the frictionless experiences mentioned earlier, customers can also reserve the shoes they want using the Nike app and then collect them from an in-store locker, opened by the same app. They can pay for the merchandise in the app, too.

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“Data and technology are the connective tissue underlying the creation of rich, informative in-store experiences.”

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Stores are also using data on customers’ physical locations to enhance experiences. For instance, Nordstrom has experimented with a customer-tracking app that notifies staff as each person arrives, arming the sales team in advance with information about that shopper’s buying habits. For some people, this is delightful and convenient, but for others it’s intrusive and unwelcome, so data analytics is helping companies determine which customers are which, too. Of course, for these location- and habit-tracking features to work, people will have to trust retailers with their personal information — and that will be a big hurdle to overcome.

Make shopping fun. Personalization can help turn offline retail into a rich experience that consumers will seek out. And technology can enable even more ways to make shopping entertaining.

For example, French beauty brand Sephora is using augmented reality to allow customers to test makeup virtually. London fashion store Missguided’s expansion offline involved creating a flagship store inspired by a TV studio, with huge screens that stream customer-generated social media content.

The New York City location of fashion retailer Rebecca Minkoff has interactive mirrors in the dressing rooms so customers can order a different color or size with a few taps. They can also customize the lighting so it matches the environment in which they will wear the outfit.

Track different things better. Retailers have traditionally measured success by sales per square foot, and based on that formula, numerous chains have closed branches because of diminishing results. But now that people no longer have to rely on stores as the sole way to access products, this gauge of productivity looks dated.

Last year, Adobe Labs showed off new technology for tracking shoppers through a store in real time, drawing information from in-store beacons, smart shopping carts, Internet of Things sensors, and a mobile app. This technology would allow retailers to direct offers to customers about certain products even as they’re looking at them.

As these various examples show, data and technology are the connective tissue underlying the creation of rich, informative in-store experiences. Digital natives already know the value of understanding and using these tools, and it’s time for brick-and-mortar retailers to catch up. Using already-available digital approaches to capture the rich stream of information on consumers’ in-store and online behavior will turn traditional companies into data-driven organizations with an obsessive customer focus.

 

Author Profiles:

Flavio Palaci is PwC’s global advisory data and analytics leader. Based in Sydney, he is a partner with PwC Australia.

Ramy Sedra is PwC Canada’s data and analytics consulting leader. Based in Montreal, he is a partner with PwC Canada.

Anand Rao is PwC’s global and U.S. artificial intelligence leader and U.S. data and analytics leader. Based in Boston, he is a principal with PwC US.

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