Supermarkets: an unexpected sector for a tech arms race

When you think of a supermarket, you may think of fresh fruit, the fish counter, and the frozen foods section. You might not necessarily associate supermarkets with technology innovation. Yet, behind the scenes, the evidence suggests this is exactly what supermarkets’ research and development teams are working on.

Some of the technologies that come out of R&D are what you would might expect supermarkets to be exploring. For example, Ocado is championing the use of cloud, robotics, AI, and IoT to revolutionise the running of its warehouses. Having originally led the charge in online delivery in the UK, it seems like Ocado is pushing forward as a disruptor. Earlier this year it showcased a warehouse almost entirely run by collaborative robots, technology that it plans to sell on to other retailers.

Innovations such as these could be seen as a shrewd move to compete against competition from non-traditional supermarkets, such as Amazon, which has been ramping up its worldwide online grocery delivery service this year. Of course, Amazon had already demonstrated its credentials for innovating physical commerce as well as e-commerce, having previously opened a checkout-less store.

However, other supermarket chains are working on technology that does not seem to be so immediately relevant to a supermarket. Earlier this year I discussed the inroads Walmart has been making into the fintech sector. Walmart has also recently applied for a patent for robotic bees, to help compensate for the declining insect population to fertilise crops. While surprising at first glance, it seems that the company is exploring ways to futureproof itself against the challenges of environmental change, making sure there will always be sufficient crops to supply its stores’ grocery sections.

The value of IP for supermarkets

Supermarkets cannot patent a business method, such as a faster checkout, more efficient delivery, or a better-stocked warehouse. But they may well be able to patent the new technologies that are making all those things possible.

Just focusing on technology that improves the customer experience of supermarkets, it is quite easy to see the potential for extensive disruption. Look how the internet has changed consumers’ interactions with retailers over the past 10 years. Furthermore, looking outside of the retail sector, disruptors such as Uber have demonstrated the willingness of consumers to embrace new technologies over longstanding practices if it increases convenience, even if only marginally. AI, robotics, fintech, VR – any of these has the potential to alter the supermarket industry in exactly the same way.

Customer experience is only one aspect of the supermarket that could be altered. Returning to the Walmart example of the robotic bees, inventions that increase the means of production could give a supermarket an extreme advantage over the competition. The supermarket chain that holds the IP, and potentially the ability to prevent third parties from using the same technology, could gain a major competitive advantage in the market.

What IP strategies should supermarkets be taking?

Those who invest the most into technology R&D are likely to come out of the blocks first, leading the industry of tomorrow. For some supermarkets, adopting this “innovation first” stance may require a cultural shift towards innovating new technologies. Aside from safeguarding any investment into R&D, IP may provide a secondary benefit of functioning as a potential bargaining chip in case of future disputes.

Many companies will, understandably, decide to play more of a reactionary role to changes in the market rather than dedicate hard-earned resources to R&D. Smaller supermarket chains, for example, may not have the same resources to pursue advanced technology. This is where a defensive IP strategy can come into play.

If they are not doing so already, supermarkets should be paying close attention to the patent filings made by their competitors, since this may provide a clue as to the direction in which that business may be heading. This will help inform R&D strategies, so that a comparable or alternative option can be offered to consumers if another supermarket has developed a new technology. Moreover, this can inform a defensive IP strategy, as action can be taken to prevent competitors from acquiring IP rights that have the potential to cause harm to your business. Such action is commonly taken by filing third party observations or oppositions against a competitor’s IP.

The technological innovations coming out of the supermarket industry today could completely alter our experience of shopping in the future. Whether they are leading the charge, or looking to compete in a quick-moving environment, supermarkets need to carefully prepare their IP strategy.

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