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Nov.14, 2016

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SUPPLY CHAIN LINKS 36 THE JOURNAL OF COMMERCE www.joc.com Jerry Peck INSPIRING INNOVATION IN MAY, I wrote about a land-based delivery robot being tested in cit- ies across Europe and the US as a green solution for the "final mile" of the transportation supply chain ("Delivering on the Broadband of Things," May 30). The McMil- lon Family Retail Innovation and Technology Lab, located at the Sam M. Walton College of Business on the University of Arkansas campus, in Fayetteville, Arkansas, is leading the testing in the US. Named after its benefactor, Wal- Mart CEO Doug McMillon, the lab's mission is to explore emerging tech- nologies and innovative applications within the retail environment. "The lab will provide students and faculty with an opportunity to plan, execute, and analyze various retail designs and services to better understand how technology is changing the retail landscape," an initial press release stated. "Initial projects will be related to lighting, music, or store aesthetics; experiments with supply chain pro- cesses including drones and scooters for delivery of online orders; and dem- onstrations of new technology such as holograms and augmented reality." In September, I enthusiastically accepted an invitation by interim director Clint Johnson for a private tour of the studio. Upon entering, one of the first things I encountered was a curious shelving display con- taining 10 large jars of peanut butter, each with a smart phone attached to the shelf directly in front of each jar. As I approached the display, Johnson asked if I noticed anything unusual about the labels? After a thorough investigation, I gave up. Johnson explained that to the human eye, you simply see a jar of peanut butter and its label, but to a machine, the labels prove an invis - ible wealth of information. This is because these are no ordinary labels. Designed by a company called Digimarc (www.digimarc.com), the entire label essentially acts as a giant barcode, thus making it machine- readable from any angle, driving faster checkout times at the register. So what about the smart phones? This is where it gets especially inter- esting. By using a Digimarc-enabled app on a mobile device, Johnson explained, customers can scan packaging, on the shelf or at home, to receive interactive mobile con- tent, including audio-video product information, special offers, recipes, and more. And because these barcode pat- terns can be printed onto virtually any surface, this experience could be replicated across a wide range of goods, such as wearing apparel, handbags, and shoes. (I thought of a potential role this might play in thwarting the counterfeit goods market where annual losses to own- ers of intellectual property rights reportedly exceed $450 billion). It came as no surprise to learn that the lab works nearly exclusively with millennials, which by defini- tion includes those born between the mid-1990s and early-2000s. As the emerging "shopping class," there is a keen interest in understanding their buying patterns and habits, what inf luences their purchasing decisions, their preferred method of payment, and, particularly, their second-nature use of smart technol- ogy and supporting apps. For example, as part of the growing Internet of Things, the lab contains a "smart" appliance sec - tion that features a Wi-Fi-enabled refrigerator encompassing a 21.5-inch touch screen, together with three internal cameras that monitor its con- tents for automated replenishment orders. While the refrigerator can be purchased today, Johnson said it's used to provide students an opportu- nity to field-test existing technology and products with encouragement to explore expanded uses and what- if applications; perhaps an equivalent "smart pantry" for tracking canned and dry goods, or even individual "smart containers" for monitoring levels of key consumables such as milk, cereal or washing detergent. It will be interesting to see what concepts come out of the lab, as well as what impact this growing segment of technology — combined with its influence on the shopping behavior of millennials — could have on future logistics and distribution models. For instance, are the days of the weekly stockpiling trip to the grocery store being replaced by a series of smaller, just-in-time orders delivered to your door? Or what about virtual reality headsets (also currently available) to enhance online shopping, and their potential impact on brick-and-mor- tar retail shops? Johnson concluded the tour by showing a segregated area dedicated for holding creative brainstorming sessions. Dubbed the "You-niverse" by the lab's students, the name appropriately captures how these students perceive their individual empowerment to drive change in an increasingly connected world. I applaud the lab and its students, and will be following them closely. JOC Jerry Peck is a GTM systems integration and trade and customs specialist with Hitachi Consulting. Based in Dallas, he can be contacted at 469 400 5402, or at jerry.peck@hitachiconsulting.com. NOVEMBER 14.2016 It came as no surprise to learn that the lab works nearly exclusively with millennials.

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