Internet of Things (IoT) implementations within retail would seem to be on a strong growth path. Merchants are expected to spend as much as $2.5 billion on the technology by 2020, and as many as 70% of retailers say they are ready to make the changes necessary to adopt IoT devices. Applications including smart shelves, temperature sensors, indoor light sensors and mobile scan-as-you-shop devices are already being used to enhance in-store operations.
While leading retailers including Kroger, Tesco, Target and Carrefour already are exploring IoT’s potential, however, they remain primarily in “trial mode.” These merchants, and the larger retail industry, won’t see the big benefits that IoT advocates have been promising until they scale up their implementations — and also forge greater connections between the various IoT platforms and the retailers’ enterprise databases and control systems.
According to a 2016 Retail Systems Research (RSR) Report, retailers are enthusiastic about IoT’s potential to improve numerous operations across the enterprise, including:
Customer engagement in-store (78%);
Inventory management (76%);
Customer service and support (74%);
Store operations (74%);
Marketing communications (67%); and
Customer acquisition (63%).
With these benefits in mind, retailers have plenty of incentive to scale up their current IoT trials. Here are four examples of how retailers are effectively deploying IoT technologies within their ecosystems.
Tesco, Stop & Shop Pilot Mobile ‘Scan-As-You-Shop’
Tesco, Stop & Shop and Giant enable customers to scan product barcodes as they walk around the store, and keep a tally of how much they are spending. The system is available for use at self-service and manned checkouts, so that shoppers can pay without having to unload and scan all the products at once at a POS station.
Despite the simplicity of the mobile handheld scanners, the service is only available in approximately 350 of the 6,500+ Tesco stores across the UK. Stop & Shop and Giant have scanners in approximately half of their approximately 600+ combined stores, but the technology hasn’t taken off in the U.S. despite its benefit of shortening checkout lines.
Grocers likely haven’t scaled the tech for one major reason: often, people forget to scan a particular item, and the loss prevention techniques used by stores can alienate honest customers. Some stores will randomly check shoppers’ baskets to make sure that they’ve scanned everything, which can feel invasive for the shopper.
“[Customers] fear that they will be checked and will be assumed a thief by the checkout assistant,” saidBarry Clogan, Senior VP of Business Consulting Services at MyWebGrocer in an interview with Forbes. “If you have one irregular check you are more likely to get audited again on future shopping trips.”
Smart Shelves Automate Pricing, Track Inventory For Kroger, BASF
As with self-scanning solutions, successful smart shelf technology should remain fully respectful of customers’ privacy. In a report titled: The Second Era Of Digital Retail, Intel said the best smart shelves offer sophisticated sensors, local intelligence, and better cloud connectivity and services. Sensors may include 3D cameras, microphones, proximity or touch-based technologies so that the shelf can detect the product it is holding and interact with the shopper.
Smart shelf applications offer a number of features, including:
Automated pricing changes that could save labor costs;
On-demand product display or nutritional information updates;
Closer monitoring of potential shoplifters; and
Real-time inventory updates to measure inventory life or identify when shelves are running low on product.
BASF’s Wine Cellar includes a smart wine shelf that links to tablets within the store, allowing shoppers to enter their taste preferences. The bottles that match those preferences then light up on the shelf. The company can accumulate data from these interactions, such as which wine bottles shoppers linger by most often and how long they dwell there.
Kroger is testing smart shelves in 14 locations, using sensors to offer consumers personal pricing and product suggestions through its mobile app. But the testing has rolled out at a slow pace since 2015, when Kroger introduced the shelves in an Ohio store.
“Merely reporting on-shelf availability data to a management…