SCO 2.0 Chicago December 11, 2018
Key Industry Metrics Snapshot 2016 2017 % Change Store Count 154,535 154,958 FLAT Inside Sales $233.0B $237.0B 1.7% Fuel Sales $316.8B $364.1B 14.9% Total Sales $549.9B $601.1B 9.3% Pretax Profit $10.2B $10.4B 1.6% Credit Card Fees $9.5B $10.1B 5.8% Employees 2.50M 2.48M (0.8)% Fuel Margin (cpg) 20.09¢ 22.02 9.6% Net of CC Fees 14.93¢ 16.57 11.0% Source: NACS Nielsen, TDLinx & EIA
Industrial Revolution 4.0 120 years 70 years 40 years 6 years (so far) Entire societies, not just products, transformed
Retail Transformation & Industry 4.0 “The evolution in consumer demand , combined with transformative technological innovations , will continue to drive fundamental changes . The boundaries of “retailer” and “manufacturer” will continue to blur , as companies evolve to meet their customers’ needs. These forces will cause the retail and consumer packaged goods (CPG) landscape to change more in the next 10 years than it has in the past 40 years .” “Shaping the Future of Retail for Consumer Industries”, World Economic Forum, January 2017 Conexxus will lead our industry through these changes
IR 4.0: Key Technologies & Drivers Platform: Moore’s Law, quantum, smaller, gigabit wireless Computer Sciences: Artificial Intelligence > Machine Learning > Deep Learning Materials Sciences: nano, atomic reformulation Data I/O: digital 5 senses, natural language Mechanization: robotics, autonomy, precision movement Big Challenges: scarcity, energy, environment, progress, conflict
Technology “Resets” Evolutionary Approach: Revolutionary Approach: Incremental Improvements Industrial Revolution Disruptors enter here
Industry Paradigms Today Tomorrow Fuel provider Energy provider Commodity driven business Service driven business Best in class shopper experience – Limited interaction with consumers (< destination that delivers convenience in 4 mins) products, food and services Tailored & personalized experiences and Offers & promotions = One size fits all services Limited assortment (coffee, tobacco…) Hyper localized assortment Location focused Omni channel, frictionless options 7
IR4.0 - Cyber Physical Systems Emerge Many individual technologies …converging to create new mature… systems that reduce friction
Narrowing Scope of IR 4.0 From This: IR 4.0 Raw To This: IR 4.0 Relevant Foundational
BI to Big Data to AI “ERP” “Rest of world” - IoT
Organizational Evolution of AI Prescriptive Predictive Insightful Descriptive Intuitive Psychic Pizza Gut Feel History as Big Data AI processing Machine future learning * Rollup Data * Multiple * Disparate * Report adjacent data data flows: Deep * Rearview views flows IoT learning * Human Bias * Test of * Big math * Relational * “Everything intuition discovery discovered & * Big known” Odds making processing * IT as a service * 24/7 * Enter Cloud scenario Machine Machine testing advises informs human Machine human does…
AI in Retail: Improvement Grow Top Line Loop I o Near future T Yesterday Management & Movement Reports Improvement Loop
13 The New Arms Race: Can We Keep Ahead of Consumer Adoption?
Consumer Aspirations Reduce Friction: 46.1% Add Value: 28.2%
Consumers and AI When Consumers Prefer AI Top AI Shopping Experiences 80% 80% 70% 70% 60% 50% 60% 40% 50% 30% 20% 40% 10% 0% 30% s k l n 20% a e o o e i o r i M t e B a c / 10% t o t r u o r G p o e s n 0% k a a T r T d Voice Send Text Shop @ Shop on Chatbot Shop o o F Search Store Mobile Online Source: PWC “Global Consumer Insights Survey 2018” , N=22,000
16 Global Consumer AI Use Cases Race for the platform: be pervasive, assist, know, dominate Who really owns the consumer relationship of the future?
Consumer AI Takeaways… • Consumers adopting AI faster than we are – “Free”, ubiquitous & frictionless – Brings order to increasing complexity – Foundation of “the new convenience” • AI will change consumer relationship – Happening with, or without us New “3 rd parties” in relationship, what is our priority? – – Reduction of irrational/uninformed choices – Reduction of immediate consumption? – Personal assistants are corruptible • Benchmark consumer, not competition
Benefits of Standards ü Scale - write once, implement many times ü Greatly reduces integration cost & time ü Frees capital for innovation ü Antitrust and IP protection ü Increases competition 18
You Have a Technology Partner… • We are independent & non-profit… – Expert volunteers, shaping the industry • We set standards… – Data exchange, security, payments • We provide clarity… – Emerging tech/trends; identifying & educating • We advocate for our industry… – Open standards, innovation & competition • We improve profitability
Conexxus History 2014 1995 2003 Conexxus Rebrand Technology PCATS Standards Project 20
Conexxus Gold Retail Members
Stay connected with Conexxus: www.conexxus.org gtaylor@conexxus.org +1 512 508 3469 https://twitter.com/Conexxusonline https://www.linkedin.com/company/10478530/ Conexxus thanks our 2018 Annual Diamond Sponsors!
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