The possible impact of smartwatches on retail and business

Matthew Finnie CTO at Interoute has been speaking about the recently launched Samsung Smartwatch, the Galaxy Gear. Matthew has been keeping an eye on the launch of this product and considering its impact on the way we interact with technology into the future and some of the implications that has for retailers and business enterprises alike.

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Matthew, first of all, why is the Samsung Smartwatch interesting and exciting to you?

I think despite it having been received fairly negatively by the press, what we see with the Samsung Smartwatch is really the beginning of the next phase of how we think about technology and moreover how we interact with technology. To give you an example I have a 16-year-old nephew who doesn’t wear a wristwatch because he uses his phone for everything.

It is interesting to see what the Samsung Smartwatch will do because instead of having to take it out of my pocket and it having the form factor of a phone I can have a piece of technology on my wrist that can be my phone, send biometric information for sports exercise and it can be sending and receiving messages. The point being is that what is interesting about what is happening to technology is that it is less about brand and more about how we interact with the technology. You could argue will Samsung, Google etc be the vanguard of this or will they be in the future there to reap the benefits as we pour technology around ourselves or will it be someone else who understands better how we want to interact with technology and not necessarily the operating system that we use.

We often hear the phrase “Internet of Things” and it is this kind of interaction with technology that the “Internet of things” hinges around isn’t it?

I think the interesting thing about the “Internet of Things” is to really start to understand how we are interacting with technology. Internet of things understands that humans (in our old analog way) are touching technology and trying to get some kind of feedback or response. Whereas within the world of machines itself, a lot of this information can be passed on to other machines which process and present it either to another machine or back to us. So instead of predominately talking to another machine and the machine producing something back to us in some form, what we will see is a lot of intermediate processing between machines and devices as they move information around and consolidate it into the outcomes that we are trying to get.

A consequence of wearable technology is that, currently we produce a lot of content with our phones right now and so as time moves on, will be producing or using content on our wrist as well? So one of the things that you are going to start to see is the need to start organizing that because we are producing too much and we can’t find what we need. So the intermediate processing will take place, which will start to organise that. We already see that now in the Apps that you can buy for online shopping and the technology that exists within your supermarket. Your digital watch is being told offers based on your previous shopping preferences from that store. So, it is saying to it’s user things like, “there is an offer on multibuy of dishwashing tablets because you bought them last time and this time it is 5p cheaper maybe you want to take up the offer.” All these things could be going on as you are walking through the store and that is all machine-to-machine interactions.

What do you think the impact on business is going to be of technology like this, what are retailers going to have to consider?

Most of the impact will be sort of obvious. People talk about augmented reality and one of the simplest things for retail for augmented reality is the example of your furniture store; when you go to buy yourself a chair or sofa you think about what is it going to look like in your house. So what you want to do is use your camera or Smartphone and look at the room and put the chair into that room to figure out how it will look and feel.

Another example, I hear a piece of music and I want to buy that piece of music. I want to add that to my collection and so retailers could be selling that music over the air giving the customer the option to say “I want to buy what I am listening to” and it then adds itself to your cloud music collection.

The point about it is how efficient should that interaction be with the world in terms of what a customer wants and to shorten the decision it takes to look at something, make a decision and then acquire it. If you just take that as your rubric for first flush of technology then there is a whole host of things that retailers can think about. Take a shopping favourites list that is already telling me where to go and what aisle I need and what other items the retailer has an offer in that isle.

Personal shopping to some extent can become a reality and you already see it in a lot of stores who have their own online portal where if you can’t see it on the wall you can still use technology to buy it there and then. What is clever (and some retailers have set this up better than others) is the interaction between the physical and digital world and getting that right gives the frictionless commerce that most retailers are looking for.

These innovations could also change the way that people interact not only with retail but also with their jobs as well. BYOD is a real growth area and we could see devices like these creeping into the world of business fairly soon as well couldn’t we?

It could be and it is interesting that you mention that because there has been talk about the biometric sensing on the next version of the iPhone. The ideas that the device is finally secure and can be controlled in the context of your IT organization is frankly entirely the wrong way to think about it. Every one of your enterprise users is a consumer and leaves with their Smartphone and is very comfortable with the Internet as its means of access. The right way to think about it is to make the assumption that the entirety of your workforce lives in the Internet and they will have or multiple devices, which they will use to get information, to communicate, engage and do whatever they do within their job. You as a corporate entity then have to have ways of preserving data privacy, data confidentiality etc. but not as a means of ‘controlling’ endpoints.

Instead of you going into the office which puts its rules upon you to some extent, we are starting to see that in terms of efficiency and communication the enterprise now have to conform or adapt to how the workforce wish to work and not the other way round. I think that is the biggest impact on enterprises. Whether it will move or take on within the next few years we will have to wait and see, but the point is that the old model enterprise management where you can shut devices down and people can’t do stuff is not practical any more.

Looking at this in terms of cloud, how do you think changes in the way we think about and use technology will affect that’s sector going forward? Is the technology and cloud infrastructure sufficient in most cases to support these behaviors yet?

I think it is still in its adolescence in terms of how we access it. A lot of what cloud computing offers is still constrained by the limitations of the capability the organization has access to and the assets that the organization has. I think what will happen is the same as what we saw with the advent of broadband and the Internet. When you first do it people ask in the interest in the method by which they access the form and they understand the limitations etc. I think with the cloud at the moment people are starting to get their heads around that instead of it being a completely new parable where all the rules have changed. It is actually just a more efficient way of delivering computing, storage and networks than the traditional static model where people used to do it with data centers they built themselves.

I think the ‘relevance’ if you like is that the only practical mechanism for all these devices to evolve (and use a Smartphone in Europe and you get a feel for the impact of the lack of an open access to that kind of model) is that all these devices rely on the assumption that there is going to be computer storage and network available for them to use.

I think you will see a growing convergence of network computing and storage and a level of sophistication that allows people to get different levels of security and different levels of optimisation about how they build their back-end services. I think from that perspective it will be seen as a emphasis, in the same way that broadband in Europe drove the expansion of backbones in Europe largely single handedly, Smartphones and devices of that ilk are the ones that are driving the consumption of internet and driving the creation and consumption of computing and storage. They almost have a direct relationship.

What will happen is you will go through the first stage which we have just had and you will start to see people who are just starting evolving upon the key issues which are going to be how do I broaden out my computing storage so it is really highly resilient so it doesn’t go down. It may be problematic or it may cost too much or may be too slow but fundamentally it retains its form and shape 24:7/ 365 days a year. Computing and storage can evolve to that kind of level.