IT and Business Insights for SMB Solution Providers

Digital Disruption Challenges = IoT Opportunities in Retail

Solutions combining sensors, tags, motion detectors, and cloud-based software enable store owners to prevent theft and improve customer service. By Ellen Muraskin

IT’S HARD TO FIND AN INDUSTRY MORE CHALLENGED by “digital disruption” than retail, judging by the tumbleweed blowing through many malls. E-commerce and online orders have ramped up the pressure on stores and restaurants to price competitively, engage actively, and stock with clairvoyant accuracy.

The remedy for these pressures lies in more digitization, say vendors of IoT solutions. Retailers know it, too. Approximately 50 percentof them have already adopted some kind of IoT technology, according to Gartner. Nearly 70 percent, moreover, are ready to make the changes needed to prepare for IoT by 2021, according to a study commissioned by Zebra Technologies Corp., of Lincolnshire, Ill.

Where to begin? The most valuable data comes from IoT-generated real-time alerts, according to a recent survey of retailers conducted by RSR Research. Bryan Amaral, president and CEO of Atlanta-based retail tech consultancy Clientricity LLC, cites a solution deployed by a major department store as an example of what companies can do with such information. The system uses motion sensors, pressure mats, cameras, and an IoT hub to analyze customer movements and send alerts when it spots either shoplifting or opportunities for customer engagement.

A similar solution, FlorLink SmartHub from Natick, Mass.-based LNL Systems, runs on Windows 10 and the Microsoft Azure public cloud—a feature Amazon-averse retailers appreciate, according to CEO Michael Barnes. The rules-based appliance dissuades would-be thieves by playing a welcome message over the nearest loudspeaker when their presence is detected, letting them know surveillance is underway. If the camera detects significant “dwell time” by a shopper, it alerts nearby sales staff and prompts their assistance. Trial deployments resulted in an 18 percent drop in theft by “organized retail criminals” and a 27 percent lift in customer satisfaction scores by mystery shoppers.

IoT can also help retailers get maximum impact from limited staff. “Most big-box store shopping is a self-service experience,” says Amaral. “But you have certain areas of high-margin, high-ticket items—in this case, office chairs—where sales can really move the needle.” Using cameras to inform the few sales associates on duty via two-way radio when a customer spends significant time standing in the office chair section allows them to create a high-touch engagement.

IoT Apps Produce New Channel Opportunities

One of the earliest and still most needed IoT retail solution involves temperature monitoring for energy management and food safety. Channel-focused packages including sensors, gateways, connectivity, and cloud-based applications are available from several vendors, such as Philips Lighting, Zebra Technologies, and SensorWorks.

Asset tracking is another IoT opportunity. Yesterday’s brick-and-mortar shopper may have been content to wait for back orders if a store was out of stock, but today’s omnichannel customers just click somewhere else. They also expect online orders to arrive within 24 hours and demand the flexibility to pick up products bought online in a store, reserve products online and purchase them in person, or have products paid for on-site delivered to their front door.

All these variations make real-time, chain-wide visibility into inventory critical, and RFID tags and readers provide that more quickly and accurately than humans. Zebra’s SmartLens suite of products, released last year, combines sensors, RFID readers, hubs, video integration, and software to track the location, movement, and direction of tagged merchandise, assets, and people. It’s now being trialed with multiple retailers, according to Thomas Moore, Zebra Technologies’ industry lead for retail and hospitality.

Sensing Stolen Merchandise

Systems like SmartLens and FlorLink look for all types of suspicious and opportune conditions. “In a loss prevention scenario,” says Moore, “it can track the individual who has a specific item and provides a visual. We’ve had customers who’ve found people who go into a dressing room and put on seven pairs of jeans. That’s pairing an asset—a pair of jeans—with video.”

The system can also automatically alert staff to the situation so they can take action before the merchandise walks out the door. That’s but one example of how retail IoT solutions eventually pay for themselves many times over.

Opening image: Pixabay

About the Author

Ellen Muraskin is a freelance writer based in Morris Plains, N.J.

 

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