The Semantic Web

Do you remember when there were phone booths everywhere? When PCs had 30 Meg hard drives, 512K of memory and PC communication were 2400 bps? When phone messages came on little slips of paper? When Automated Teller Machines were still new technology? News and weather were only on TV at 6 pm and 10 pm. We were angry about gas prices going above $1.00. It was 1985 and there was no commercial Internet, no Web, and those UPC codes were not yet everywhere. Retailing had not changed much in the previous twenty years. Wal-Mart only had 882 stores mostly in the South and few thought that they would be a threat to the big five. There were no supercenter stores.

Just twenty years ago our lives were very different. We have changed how we work, how we play, how we shop. Much of the change has been due to technology developed during that same twenty years. Now most of us can't imagine living without the Web or Cable TV. We can't imagine going out without our cell phone. As workers and consumers, we have become dependent on technology that was a dream only twenty years ago. We have raised our expectations of the companies we work for and the stores we shop in. We have become very technologically sophisticated.

For about five years, the graduates of colleges and universities have entered the workforce more technically savvy than most of the companies that hired them. They got their assignments from their professors on the Intranet and turned in their work on the Intranet. When they worked on projects with other students, they were doing Web collaboration. They were using Portals. Most of them are more comfortable dealing with a video screen such as a kiosk or digital merchandising than they are dealing with a human. I think it is safe to say that they are all comfortable on the Web.

Interpersonal communications

There are about 1.5 Billion cell phones on the planet this year and they are selling at over 600 Million per year. Most of these new model phones have Bluetooth and Internet access. This means that within three years there will be a critical mass of customers carrying a device into the store that the retailer will be able to communicate with. It will change the relationship between the consumer and the retailer.

If we want to see how communications will change our lives in the short term, we should look to Japan and Korea. They are years ahead of North America in telecom. In Japan you can scan a product in a retail store with your cell phone and find out who else is selling the same product and for how much. You can then buy it in the store or order it over the Web on the phone.

Forbes Magazine's May 23rd issue has a great article on the entertainment future of these new phones but I think the retailer benefit will come from the short range communications. This won't make things easier for IT, but, it has the capability to make the shopping experience more compelling for the consumer. The issue for the retail marketing folks is, what will you say to the consumer when they are standing in the store in front of merchandise, trying to make a decision. Think of the increased complexity of promotions and merchandising for this interaction.

So how will we understand the customer well enough to create the compelling shopping experience that will cause them to travel past the competitor's store to shop your store? We will have to use technology to create and deliver knowledge. Then we will have to build an environment that can evolve into the next generation store without having to throw away systems along the way.

I am working to create a retail insight Wiki so that IBM's retail domain experts around the world can contribute thoughts, observances, happenings, ideas, and epiphanies. This would then become a living, evolving domain of knowledge that will allow us to better understand what we see happening around us. This is the new world of knowledge management.

The Next Generation Store

Many of the retail projects to build the Next Generation Store that I am aware of are working to make the store a delight to shop in. However, most of these projects are not even building the current state of the art store. If they start with the technology available now, and then take two years to roll it out, they will have a two year-old store format and may have to throw some of it away to put in the then latest technology. The best of the next generation store projects that I have seen are examining the evolution of the consumer attitudes toward shopping. If you understand how the consumer got to where they are now, you can better predict where they will be in five to ten years. The consumer will have more and different touch points than they have now. They will be much more sophisticated. They will demand more from their shopping experience.