Blockchain in 2021 and Beyond
Will blockchain technology gain more traction in 2021? At least one expert thinks it will, based on what he sees as “good ROI” and a growing demand from the legislative and regulatory perspective. Sergei Beliaev is chief strategy officer and EVP at Toronto-based blockchain provider DLT Labs, but he also happens to be a former CIO for Walmart Canada.
At Mississauga, Ontario-based Walmart Canada, DLT Labs used distributive ledger technology to help the retailer achieve a 97% reduction in discrepancies/disputes with its network of trucking carriers. Its full production solution pilot with Winnipeg, Manitoba-based Bison Transport was deployed in two months, and since then, more carriers have been signing on to the platform.
“It was good to have Bison as a success story right away,” says Beliaev. “Based on that success, we were able to demonstrate immediately to other carriers the value, and the value is very simple: If you sign up for the platform, you get paid faster. For transportation companies, sometimes an invoice could be hanging in dispute for up to eight months. So with this, trade finance is facilitated as well.”
Traceability is another important area where blockchain can help, he adds, pointing to the FDA’s Blueprint for Smarter Food Safety and its specific mention of blockchain as a tool. “The FDA is looking to build collaboration throughout the supply chain, from the field to the consumers, to provide traceability so that if there is any kind of outbreak anywhere, it’s easy to identify where the breakup is, and it’s easy to correct it,” he says.
As the world becomes increasingly digitized with scanning technology, Internet of Things (IoT) technology, sensors and other smart solutions, Beliaev sees blockchain as an “underpinning” that can allow data to be managed effectively, securely and safely. “You can use blockchain as a fabric that captures all those business events in an immutable, tamper-proof manner,” he explains, “and now it’s in real time and sharable. So companies can use it to collaborate.”
Eventually, as blockchain becomes a more widely used technology, Beliaev envisions an internet-like structure of interoperable blockchain systems that are “equally immutable and equally secure.
In 2021 and beyond, expect to see more grocers tapping into the intelligence of technology companies, specifically regarding automation and artificial intelligence, while also rolling out more micro-fulfillment centers in an effort to get products to their shoppers more quickly and efficiently — whether those shoppers want their groceries delivered at home or are willing to pick them up at their local store.
According to Jordan K. Speer, research manager, global supply chain at IDC, a global market intelligence firm based in Framingham, Mass., new research from her firm suggests that increases in curbside pickup and BOPIS (buy online, pick up in-store) will persist, and that on-site or nearby micro-fulfillment centers will proliferate to alleviate pressure from stores and to make sure inventory is available.
“In our 2021 FutureScape, we predict that by 2023, 75% of grocery e-commerce orders — which will represent 15% of sales — will be picked curbside or in-store, driving a 35% increase in investment in on-site or micro-fulfillment centers,” notes Speer.
Contactless Pickup Gaining Ground
In September, IDC conducted consumer research showing that shoppers are warming up to in-store or curbside pickup, observes Speer. “Almost 45% of shoppers say they have started ordering groceries online since the pandemic, and more than 26% are picking up in the store,” she says. “Furthermore, almost 32% expect to continue their new COVID-induced habits even after the pandemic is long gone.”
The research suggests that these low- or no-contact offerings make some consumers feel safer during the pandemic, she adds.
“This research really says a lot about customer expectations and fulfillment demands, and what retailers are going to need to do to respond to that,” notes Speer.
Peter Leech, partner, digital e-commerce at The Partnering Group, sees a similar trend. “We’ve seen the rise of click-and-collect as a response to COVID,” he says. “This has created an immediate need for ramping up operations in the store to pick from store shelves for e-commerce orders. There’s just tremendous pressure on the retailers, because the aisles are getting more and more full of pickers, and there’s a greater need for efficiency in picking, in both speed and accuracy. Out-of-stocks and substitutions have been pretty big. We’ve seen numbers reaching into the low double digits in some cases.”
Because of these pressures, Leech says that his Cincinnati-based firm is working to help grocers deliver a better e-commerce experience. “We’re spending time as a consultancy working with retailers to find quick wins to improve units per hour, or how many units can be picked for an order per hour,” he explains. To do that, The Partnering Group is borrowing some best practices from the United Kingdom, where retailers are about five to 10 years ahead of U.S. companies in this area.
Leech’s colleague, Marc de Speville, partner, ecommerce, estimates that the current range of average units per hour at U.S. grocers is in the high 40s. In contrast, U.K. retailers average about 130-140 units per hour.
To help catapult U.S. retailers to where they need to be to match the efficiencies of their counterparts across the pond, automation is emerging as a key strategy, explains de Speville.
“The trend now is micro-fulfillment centers,” he asserts. “That’s the idea of combining the benefits of picking automation, which can potentially double or triple your picking efficiency, with being as close to possible to your customers so your delivery costs are kept under control. You’re also leveraging your fixed costs if you’re a store-based retailer. So far, we’re seeing a lot of tests going on. I’d say at this point, they’re in the advanced testing phase, and next year  is when we’re going to see this big rollout of micro-fulfillment trials, once they’ve really got the model nailed down.”
Lisa Chai, senior research analyst at ROBO Global, an index, advisory and research company based in Dallas, says that ROI is actually much more measurable on the logistics side of e-commerce, which is “a very big deal” for the Walmarts and Krogers of the world. “They love the technology, but it can be very expensive,” adds Chai. “On the logistics side, with e-commerce especially, you’re seeing what grocery is getting back.”
She continues: “There’s a big scramble right now over how to balance the in-store experience as well as e-commerce sales. Micro-fulfillment centers are very expensive to build, and that’s the downside. But once you have them and you go with a very innovative technology partner, you can solve many, many issues with these fulfillment centers.”
Automated micro-fulfillment centers also address the shortage in workers that so many industries are facing across the board — not just at grocery retail, but also in transportation and manufacturing, she notes.
The technology behind autonomous robots is improving significantly and is well suited to the type of flexibility needed for e-commerce fulfillment, says IDC’s Speer.
“The idea of being able to have robots that can maneuver around the warehouses like humans can, and see things in their way, is very useful,” she notes. “They don’t have to be attached like the AGVs [automatic guided vehicles], which follow magnetic tape on the floor. The AMRs [autonomous mobile robots] can navigate. They have sensors and camera vision, and can move around like humans can, and they can be programmed to move around independently and go get stuff.”
Adds Speer, “I think we’ll increasingly see that level of automation in warehouses and DCs and micro-fulfillment centers, especially when you consider the need for social distancing, and labor being expensive and often scarce.”
Walmart is experimenting with how new technology can create a best-in-class shopping experience in its Intelligent Retail Lab store, on New York’s Long Island. Powered by artificial intelligence, the store features weighted-shelf technology, more than 1,000 cameras with machine vision technology, and even an in-house mini data center located in the back.
Lisa Chai, senior research analyst at Dallas-based index, advisory and research company ROBO Global, says that she was quite impressed when she took a tour of the 50,000-square-foot facility at the beginning of 2020.
“What’s unique about the data center, is that while it was presumably expensive to build, it enables Walmart to gather intelligent data in real time,” she notes.
“Many of the shelves are weighted — they have sensing technologies,” she goes on to observe. “So if you take a can of soup off the shelf, it’s sending real-time data that you removed the item. Then Walmart actually complements that technology with a barcode scanner that has a machine vision camera, made by Zebra Technologies, installed on top of the ceiling, which captures and scans barcodes and sends that data to their software. It can detect what’s happening out of view from the other technologies.”
Through trial and error, Bentonville, Ark.-based Walmart has realized that it makes the most sense to use world-class technology above higher-margin items, notes Chai. High-theft items are also a good candidate for machine vision cameras, she points out.
Meanwhile, sensors placed in the meat aisle help workers know when they need to restock. Walmart was able to measure a 30% sales increase tied to the technology. The retailer even had to hire more workers to restock the section more regularly, proving that robots can work in tandem with humans without taking over their jobs, as Chai sees it.
She also got to see Bossa Nova robots in action during her tour. Since then, Walmart has revealed that it will no longer use the robots, which scanned shelves and helped manage inventory in the store.
“Feedback from some of the shoppers was that it was rather bulky, making it difficult to maneuver around the aisles,” observes Chai. “I’m guessing Walmart found other solutions that met their needs.”
Chai advises Walmart and other leading retailers to “innovate as quickly as possible” and have a long-term strategic vision in place if they want to stay competitive with Seattle-based Amazon.
“Walmart’s intelligent retail lab is one way to do pilot trials without getting a ton of attention,” she notes. “I expect Walmart to continue its partnership with other startups as technologies evolve and as the company refines its strategy.”