Sizing up the IoT retail opportunity

The Internet has changed much in the last three decades. Conceived in the era of time-sharing, the Internet has survived into the era of social media.

It was envisioned as supporting a range of functions from file sharing and remote login to resource sharing and collaboration and, while it still does this, it has grown to support pervasive technologies — always on, always connected.

During the ’90s, new technologies swept in, threatening and promising to change the way people worked and lived. Such technologies became an instant priority for IT, but their multiple facets weren’t so easily or quickly mastered. Hence, some companies lavished money in creating static web sites whilst savvier companies realised that, with some careful back-end investment, the Internet could not only offer data access to employees, partners, and suppliers, but it could also represent an unprecedented transactional opportunity via e-commerce and other channels. The latter companies thrived while the others floundered.

The digital revolution continued, and the 1990s’ Internet mania was upon us once again with the growth of mobile, e-commerce and the integral adoption of social media that we see today. Networked devices save people time, simplify our lives, bring us closer to friends and family, and make our lives richer and more enjoyable. Mobility has created unique opportunities for organisations looking to stay competitive in today’s marketplace. Giving businesses and customers access to real-time data, thereby allowing better servicing for all.

Now, imagine a world where artificial intelligence interacts with human beings in such a way that its influence is unnoticed, that, by the time we recognise it, the technology is already meshed within the fabric of our daily existence.

Sounds far off? Not Really — we are somewhat there with the next wave dawning upon. I am referring to the growing popularity of the Internet of Things (IoT).

IoT is the network of physical objects such as devices, vehicles, buildings and other items — embedded with electronics, software, sensors, and network connectivity that enables these objects to collect and exchange data. This includes adding intelligence to things such as utility meters, home automation, mobile devices, coffee makers, washing machines, audio and visual devices, lighting devices, wearable devices and almost anything else you can think of.

An array of endless real life applications have been discussed and implemented ranging from smart cars (imagine your car chose the best route based on traffic, your calendar and could notify your calendar recipients of any delay in arrival etc.) to smart homes (your refrigerator or washing machine could identify you are running low on consumables and could place an order for renewal with a 3rd party etc.). That being said, IoT technologies and business models leveraging IoT are still in its infancy and targeting the right vertical and business case has been a challenge to date.

However according to Gartner, a survey of business and IT executives conducted in early 2015 shares some insight and excitement when looking forward. The article noted that manufacturing and retail verticals yielded high expectations of the IoT and judging by market activity in this space, retail and manufacturing may just hold the key to some serious disruption.

Example use cases for IoT around the home

We may soon witness the birth of a new digital eco-system where we will see relationships between people, people and everyday things, and interactions between ‘things’ and other ‘things’ (also known as machine-to-machine). There are already some notable retailers who are experimenting with innovative ways so as to offer new services, improve user experiences and overall contribute to the new digital eco-systems both inside and outside the store.

Examples of this include ways to better understand customer habits, personalising the customer experience & improving customer sentiment:

Bluetooth low energy beacons coupled with an app

1. Macy’s used the beacon technology to track movements of customers around the store, and eventually provide coupons for relevant products, discounts, and information.
2. Lord & Taylor used the beacon technology and customer spend patterns to better understand the customers trends and present options of interest to the buyer

Heat Sensors

1. Hugo Boss has already deployed heat sensors in its clothing stores to track customer movements, which helps managers place premium products in high-traffic areas

RFID Tags

1. Disney MagicBand. An RFID-enabled wristbands that provide theme park access, entry access for guest hotel rooms, and cash and card-free payment food and merchandise. All that activity is also tracked data that helps build a better picture of how guests use Disney services
2. Zara uses the technology to keep track of its stock and replenish its clothing racks more quickly

My personal favourites come from the retailing giant, Amazon:

Dash Button and Dash Services

1. Amazon introduced the Dash Button to eliminate those moments you realize you forgot to order a frequently-used household item. Things like laundry detergent, coffee etc. Leveraging Amazon’s 1-Click ordering and fulfilment system, users just press the button and an order is automatically placed.
2. Amazon is also making the service that powers the Dash Button, the Dash Replenishment Service (DRS), available for device manufacturers to build into their products thus opening up user innovation and engagement.

Alexa

1. Amazons virtual personal assistant AI is known as Alexa. The company has integrated this into many of its hardware products such as the FireTV, Echo, Dot and Tap devices. you can ask for a news update, create to-do lists, ask for facts and measurements, set timers and alarms, play music, turn off lights and even Re-order physical products you previously purchased on the Amazon website.
2. Amazon has made the voice driven API behind Alexa, Alexa Skills Kit (ASK), available to developers to create new voice-driven capabilities for Alexa. Developers should be able to integrate existing web services with Alexa or build entirely new experiences designed around voice.

I leave you the reader with this. In our fast-paced world, take time to pause and consider this famous quote:

“We don’t learn from experience. We learn from reflecting on experience.”
— John Dewey

Just as you had to do in the 90s, you must focus on what aspects of digital best serve your business requirements now, and recalibrate them periodically. Yes, the Internet of Things are still in the very early stages of adoption and yes there is much debate surrounding the possible security and privacy violations the eco system may generate, but those Retailers who navigate the hurdles now and develop an IoT strategy will definitely be positioned well in the future.

An unmistakable opportunity to increase revenue and better serve your customers awaits. Are you ready for disruption?

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First posted on LinkedIn by Zaheer Hamza, Senior Solution Architect, Tigerspike