The retail industry is witnessing a natural evolution to smarter solutions. In this article, we take a look at some of the latest trends and applications in this space while trying to understand how they benefit retailers.
Izvor: a&s International
Retail, today, is all about the experience. Gone are the days when a customer walked into a store only for the sake of buying a product. Today’s customers are looking for the experience of buying a product as much as the product itself.
To this end, the latest technology has helped retailers provide an enhanced experience to customers. Making this possible is the all-pervasive Internet of Things (IoT). According to MarketsandMarkets, the global IoT in the retail market is expected to grow from US$14,280 million in 2015 to $35,640 million by 2020, at a CAGR of 20 percent.
“IoT in retail is majorly used to manage inventory, track theft and loss, mobile payments, shopper intelligence, and advertising and marketing inventory,” the research firm said. “The demand for this market is driven by internet ubiquity worldwide and the declining cost of IoT components such as sensors and RFID. Cloud platform is another factor which is considered as an important driver to the IoT market.”
The entry of IoT into retail has given rise to the concept of smart retail. In a very basic definition, smart retail refers to the use of new technology and solutions to enhance the customer experience. Employing various types of sensors and the data they collect, smart retail solutions aim to enhance the experience of the customer.
HOW DOES SMART RETAIL BENEFIT RETAILERS?
The rise of connected IoT devices and access to unprecedented levels of data are taking retail from the ordinary to the extraordinary. Technological advancements are refreshing the traditional brick and mortar store experience, reimagining the digital storefront and transforming the supply chain.
According to Michelle Tinsley, Director of Mobility & Secure Payments in Retail Solutions Division at Intel, fusing environmental and customer data is leading to seamless, personalized online and in-store experiences that build affinity and delight customers. As retail becomes more smart and connected, new experiences can become second nature. such as virtual reality-enabled shopping. The emergence of the fourth channel with in-home "buttons" for instant ordering, 24/7 self-service kiosks, and e-wallet payment options. With loT. commerce may happen anywhere consumers may be browsing, waiting or dwelling - as new devices can offer goods for spontaneous purchase.
"On the backend. access to real-time insights can drive operational efficiencies. which in turn can generate more sales", Tinsley said. "The successful modern retail experience will be built upon a foundation of understanding and interpreting the shopper behavior through their journey, then enhanced by measurable and valuable data insights gained to anticipate and respond to customer needs, in real time. With the help of emerging technologies such as artificial intelligence that are showing advances in automating routine According to Michelle Tinsley, Director of Mobility & Secure Payments in Retail Solutions Division at Intel, fusing environmental and customer data is leading to seamless, personalized online and in-store experiences that build affinity and delight customers. As retail becomes more smart and connected, new experiences can become second nature. such as virtual reality-enabled shopping. The emergence of the fourth channel with in-home "buttons" for instant ordering, 24/7 self-service kiosks, tasks, sales associates can now focus on higher value activities that involve creating a more engaging customer experience. Even the roll out of pop-up stores. outfitted with technology, provide retailers a cost-effective solution to bring retail to consumers and test new markets without large inventory or real-estate investments."
Ultimately, smart retail helps retailers by first helping shoppers, and what's good for shoppers is good for business. Long gone are the days of retail's chief merchant dictating the shopping experience to shoppers. The internet has empowered shoppers like never before. and shoppers have firmly grasped control. and forever so. Their shopping journeys are now powered by unfiltered access to information and they have global shopping alternatives. Smart retail is all about being shopper-centric retail.
Ray Hartjen, Director of Marketing at Retail next pointed out smart retail is using loT to eliminate - or at least minimize - the friction points for shoppers in their shopping journeys. "Product and service information, inventory accessibility and availability, fitting room management, and queues are all long-standing opportunities that are being solved for, and the retailers that do so first and provide seamless shopping experiences for customers across all of their branded touch points both digital and physical - a re poised to become the new 'retailers of choice' by shoppers", Hartjen said.
The key factor among all this is the artificial intelligence that's poised to take over a large chunk of work in the retail space. Gary Yeh, Product Manager at IEI Integration, suggested these will reduce the operating costs, increase predictive accuracy and enhance brand image.
In many ways then, the year 2017 is going to be quite eventful for the retail industry. Quite a few changes are expected and these changes are going to lead to a transformation on how retailers themselves view the industry.
WHAT TO WHATCH OUT FOR IN 2017
Perhaps the major factor to look out for in this year would not be the technology, but its implementation to provide tailored solutions. Cheerfy, a UK-based company that provides Wi-Fi based customer recognition and relationship tool suggests the key word here is "personalization" Customers are looking for an experience that's meant only for them. Tinsley agreed to this, explaining that retailers now have to make custom, personalized products through made-to-order products. She gave an example of a recently-unveiled solution by Intel and the knitting machines manufacturer Shima Seiki that can knit custom sweaters in less than an hour. Made-to-order products like these have the potential to upend the fashion supply chain and make the business of forecasting obsolete.
Elaborating more on specific solutions, Hartjen said RFID has greatly evolved, particularly with item-level ragging. With sensor fusion of a combination of technologies, it is now possible to efficiently and effectively track the movement of shoppers, sales associates and products, for the first time giving visibility to exactly what is happening in-store, from the door through the store and back out again.
Technologies to greater empower the sales associate, be it through training or just simple in-store communications, are being deployed more rapidly, and shoppers are receiving a direct benefit by being able to interact with a more informed, more connected sales staff.
Thomas Hillebrand, GM for Europe at ShopperTrak/Tyco Retail Solutions, pointed out that as omnichannel retailing is increasingly expected by customers, smart technology will become something of a necessity.
"In particular, smart technology, which looks to leverage customer devices such as smart phones will be a key focus this year; said Hillebrand. "Personal devices present a huge opportunity for retailers, as they are always at hand and offer brands a direct line of contact with the customer. There are benefits forthe customer also, as retailers can send them a welcome note as they walk into the store containing suggested items or customized offers, based on their historic purchases or related interests."
NEW TECHNOLOGIES GETTING ATTENTION
The revolution that data-centric tools will bring to retail will be what professionals and enthusiasts in this field would be keenly watching. Early this year, at a keynote speech at the National Retail Federation (NRF) conference, Intel's CEO Brian Krzanich had pointed out how innovative retailers like Alibaba are empowering customers to use virtual reality to shop anywhere in the world without leaving their home. Virtual reality will help customers and retailers use data and analytics to maximize investment and impact in retail. In Tinsley's opinion, this could be a game changer.
"VR [virtual reality] based technology, which has the potential to provide benefits for both consumers and retailers," Tinsley said." lntel has been collaborating with ShopperMX on a solution known as the TheHIVE (high immersion virtual experience), a Windows-based, 30 virtual reality solution with networked components that allow for a never-before seen immersive experience. Shoppers can now feel as if they are in a specific room in a house where they can place and remove products, and merchants can do virtual walkthroughs of store layouts and merchandising. This has taken store re-layout decisions from three to six months, to one week"
Smart scanning solutions are also enabling consumers to have their feet or body scanned in 3D to provide custom-fit shoes and clothes. Once that information has been captured, it can also be used to generate a list of retailers and products that provide a similar fit. This is a huge boon to retailers as well since it eliminates the many purchases returned due to inaccurate sizing or from not meeting expectations.
Hartjen too agreed that virtual reality and its cousin augmented reality will continue to grow in the coming year. Other technologies gathering interest include In-store, connected displays and kiosks like those popping up in quick service restaurants, and smart mirrors and other connected devices in stores. Whether it's with a shopper's own connected mobile device or a device of the store, it's essential to provide a connected experience. Shoppers are demanding it, and they have very little patience or tolerance for retailers that don't "get it".
Yeh pointed out that. in effect, all smart devices need to be easy to use and closer to human behavior. Especially, how to use the multi-function devices and the consumer behavior towards it is very important. For example, someone would try the smart mirrors once since it is new and he hasn't seen it before, but would he want to try it every time?
"We (IEI + QNAP) are developing a new smart device with intelligent voice control named AfuBot," Yeh said. "You can chat with it, discuss with it, it can even help you to search and buy things on line. In your home, it is the best butler, in the store it can be a special waitress at every table. We [also] think there are few solutions such as UHF solution and behavior predicting software for customers who are using or trying products in the retail store. IE! imports some UHF solution real cases such as clothing store, factory and vehicle parking for asset control and inventory management. It also has security alarm function."
Ralf Kodritsch, Director and Segment Manager of RFID Solutions at NXP Semiconductors, said smart shelves are another means to increase inventory accuracy and improve shopping experience." These intelligent shelves allow stores to continuously check the items' position and provide alarms when items are misplaced," Kodritsch said. "Such shelves can also be equipped with electronic shelf labels, whose display content (the price of the item) can be easily changed depending on market dynamics. Should another store or online channel offer the same item at lower prices, the retailer can swiftly react to that. In addition, the electronic shelf label may contain an NFC tag, by tapping it. The consumer can get product and brand information of the item of interest"
GROWING WITH THE EVOLVING ECONOMY
The global economic situation is ever-evolving, with several new concepts making an entrance. One of them is the concept of sharing economy. In what can be called collaborative consumption, sharing economy or peer economy refers to economic transactions wherein owners rent out something they are not using, such as a car, house or bicycle to strangers through the Internet.
While we haven't yet seen its impact on the retail sector, it could only be a matter of time before it exerts its influence. And when that happens, will smart retail solutions have a role to play too?
"With so many choices, customers can buy what they want, when and where they want it, anytime, anywhere - and the sharing economy will only increase those choices," Tinsley said. "The differentiator for retailers then comes down to data. Retailers need to put that data to work, delivering real-time insights that enable them, for example, to eliminate frustrating out-of-stock situations, personalize ads and offers, optimize inventory, and introduce products and services that unlock new value. Technology platforms that combine loT and cloud technologies to connect in-store experiences with back-end supply chains make this transformation possible, and will enable retailers to deliver consistently great experiences, building long-term brand loyalty."
Clearly smart retail solutions have a key role to play in the future of brick and mortar shops. Regardless of what direction the economy, business nature and customer interests take, smart solutions would strive to make that time you spent in a shop worth it. Again, this brings us back to the initial concept we discussed, that of shopping becoming more about the experience than the product itself. With personalization and customization, and the technologies that we discussed, this would become the priority for retailers of the future.
Smart Retail and Smarter Security
Advancements in the retail space have given rise to new ways of ensuring security.
The concept of smart retail has to inevitably cover the physical security aspect as it is also one of the factors that would affect a retailers' bottom line. With the influx of sensors, security can become more sophisticated and efficient from a solution providers' point of view.
"RFID technology can provide a snapshot of the real-time location of every item in the store, and alert store associates when that item has been misplaced or stolen," said Michelle Tinsley, Director of Mobility & Secure Payments in Retail Solutions Division at Intel. "While RFID technology has been around for some time, the costs of tags and equipment have come down significantly in the past few years, making it more accessible and affordable for retailers. Intel has worked with retailers to implement real-time 100 percent coverage of RFID - which has enabled the retailers to instantly see a reduction in "Shrink" that was driven by employee theft of items. If the retailer 'sees' the item in an employee locker or storage area they can detect it before it leaves the store."
Other sensors, such as video sensors, can also provide real-time feeds of the store and inventory, enabling store owners to visually track their merchandise. Computer vision will enable retailer loss prevention departments to detect suspicious behaviors real -time as opposed to reviewing recordings after the fact. With the implementation of loT, retailers are merging the data from security cameras to inventory systems and POS activity - to draw actionable insights and reduce losses.
"Smart store solutions for security and loss prevention utilize a variety of sensor technologies including video, RFID, EAS systems and more, and the best solutions integrate a variety of different systems, including, of course, the point-of-sale system," said Ray Hartjen, Director of Marketing at Retailnext. "A key to efficient and effective deployment is real-time alerts, enabling loss prevention and security professionals to take a more proactive approach. Alerts can be sent when security doors and safes are approached or opened, or if shopper dwell times exceed a pre-determined time at a display of high-priced and/or high-theft products. Additionally, by fully understanding the movement of shoppers and merchandise In the store, anomalies can be more easily spotted, and technology tools can be utilized to conduct investigations more efficiently and effectively."
Adding smart chips to clothes tags can help monitor, track and count apparel In the store, according to Ralf Kodritsch, Director and Segment Manager for RFID Solutions at NXP Semiconductors. Solutions like RAIN RFID labels for tagging of products can help serve as theft protection, not only to determine that something was stolen, but which article was stolen exactly. Hence the replenishment process can be triggered, this very product will be re-ordered so that the next customers will also find what they are looking for.