How will the IoT impact retailers
Advanced developments in Internet of Things technology is providing retailers a slew of benefits, from faster product replacement to product performance, and is increasingly being embraced by household brands to boost operational efficiencies, compliance and marketing promotion.
Yet it's more than likely many retailers still don't realize the value of IoT and may harbor a skewered view of cost and deployment, said Steve Hornyak, CEO of Trax Americas.
"Many retailers see IoT and AI as providing additional 'deeper' information but the reality is they are already drowning in data and do not need more," Hornyak told Retail Customer Experience in an email interview.
"IoT devices are fundamentally different in that they provide new or much more granular data, such as blue tooth-enabled cameras that can replace expensive and slow manual audits," he said, noting some Trax clients are using first-generation fixed cameras on end-caps to track shelf activity and that allows them to relocate available stock and save lost sales while also boosting revenue.
"Another misconception is that IoT technology is slow to implement and requires significant IT resources. In fact, many solutions can be implemented as a pilot roll out in a matter of weeks," he explained, adding many retailers are likely unsure of total cost of ownership and associated ROI.
"Speaking only of Trax solutions, we take the data and convert it into actionable insights to reduce costs and increase revenue, mitigating the need to analyze 'piles' of data. The TCO and ROI, especially with the radically decreasing costs of IoT sensors and associated operational benefits, is clear," he said.
Trax's solution captures images and data from store shelves via IoT devices, which include phones, tables, smart shelves and now even robots. Artificial intelligence is applied to the data to provide real-time insight on how products are selling, what steps a retailer can take to boost that sales pace, stock replenishment and how products are performing against a competitor's product.
The potential impact is wide ranging — from increasing revenue to decreasing operational expenses to driving a better customer experience.
"The highest velocity products, such fast moving consumer goods and end-caps, are the same products that provide the highest revenue, and are the products with the highest probability for out-of-shelf. Keeping those products on the shelf increases revenues and improves customer experience. It’s a win-win," said Hornyak.
At this point, according to Hornyak, some IoT solutions are established and expanding while others are just taking root.
For example, people-tracking sensors have been in place in big box retailers, malls and grocery stores for a decade and beacon advancements are expanding such capabilities.
"The use of beacons for marketing is still early but will soon reach mainstream," predicted Hornyak.
Emerging markets for IoT include battery-powered blue tooth low energy devices, he noted.
"Batteries will enable faster, no wires and low cost deployments. They run on the stores core network and can provide real-time information. These small form factor (matchbook size), low-cost, disposable cameras, coupled with image recognition and artificial intelligence, can digitize shelves providing real-time product, promotion and pricing metrics," said Hornyak.
While declining to name specific brands and retailers, Hornyak shared a substantial list of ROI achievements Trax clients have attained. The list includes an international beverage brand increasing monthly store visits by 300 percent and sales volume by 10 percent; an international CPG brand reducing out-of-stocks by 11 percent and an international snack CPG slicing average audit time per store by 50 percent.
Such benefits should prompt retailers to assess benefits of IoT technology, said Hornyak.
"Customers clearly benefit when retailers collect and use data effectively, especially for out-of-shelf alerts, incorrect prices and highlighting the most popular products on the shelves," he said.
Judy Mottl is an experienced editor, reporter and blogger who has worked for top media including AOL, InformationWeek and InternetNews. She’s written everything from breaking news to in-depth trends. She loves a great pitch so email here, follow on Twitter and connect on LinkedIn.www