How Smart Shelves are Transforming the Retail Industry

A smart shelf is one of the emerging technologies in the retail industry, expected to revolutionize it, together with beacons, robots and digital signage. At the time when online shopping is setting new records, and brick-and-mortar locations are pressed to be fighting for their customers more than ever, these IoT connected solutions can be the solution to the woes of traditional stores’ managers.

Smart shelves enable retailers to keep track of the ongoing situation in their stock, to measure consumers’ interest in a particular item, while at the same time, to simplify their lives by providing detailed information about the products.

What is the effect of the smart shelf technology on retail? How to leverage this emerging tech and do it in the right way? Let’s check it out.

Smart Shelves Facts & Figures

The concept of a smart shelf has been on the market since 2003 and was first envisaged as a tool for assisting supermarkets and discount stores, i.e. locations where goods turn over rapidly, with stock replenishment.

However, the technology’s potential turned out to be much more than this, and, coupled with other tech advances (Artificial Intelligence, Machine Learning, Computer Vision), it has evolved rapidly and now is capable of performing a wide array of tasks.

Statistics say: a majority of retailers (77%, to be more precise) associate the future success of their business and improvement of customer experience with connected technologies, among which the smart shelf is a truly powerful one. It allows retailers to benefit from the insights into customers’ preferences and behaviors obtained via connected technologies (as admitted by 89%) and better interact with new partners in delivering products and services to their customers (for 77% of early movers).

So what can retailers get from the smart shelf technology, once they decide to invest into it?

The concept of a smart shelf has been on the market since 2003 and was first envisaged as a tool for assisting supermarkets and discount stores, i.e. locations where goods turn over rapidly, with stock replenishment.

Key drivers for smart shelf implementation are:

  • Inventory management. According to retailers, current inventory systems are only 52% accurate, thus signifying an evident urge for more advanced tools. RFID tags can be attached to literally any item in stock. Hence, it can be viewed and tracked, with results being provided in a real-time or nearly-real-time mode. Out-of-stock situations amount to billions of dollars of losses, so an automated stock replenishment alert function, associated with an intelligent shelving solution, can tackle the lost sales opportunities challenge. Also it allows to make more appropriate orders and reduce wastage.
  • Providing insights into consumer behavior. Smart shelves provide for real-time analytics of the way consumers behave, how they move in a store, in which spots they spend more time and how they engage with a certain product on sale. All in all, this results in a more consumer-focused approach of brick-and-mortar retailers.
  • Providing for dynamic and personalized shopping. Monitoring consumer response in real time leads to other advantages: with the data collected, retailers can modify their pricing strategy, make promotions customers are truly interested in, increase brand awareness, and improve new product introduction, thus optimizing revenue per square foot. Not bad for the times, when 74% of retailers think that pricing errors lead to increased costs and complexity.
  • Shrinkage reduction. This problem can be successfully tackled by the smart retail shelving system capacity to provide real-time information about immediate items or asset status. By identifying the last item position, retailers would better identify the potential source of the shrinkage and take necessary precautions.
To benefit from the technology to the maximum, it’s important to understand how exactly your business may convert it into additional – and significant! – profits and improve its performance. To help you with this, let’s have a look at the smart shelf architecture.
Have any questions? Ask our team!

RFID Technology and Other Elements at the Basis of the Smart Shelf

To form a holistic solution, one would include the following elements into the basic smart system technology architecture.
  • Radio frequency identification (RFID) system. The basic element of the RFID tracking system – an RFID tag – is equipped with a microchip antenna and integrated circuit, used to transmit data via radio signals. An RFID antenna helps detect the frequency — high, low or ultra-high.
Today RFID tags have increased sensitivity along with read ranges. There are tags specifically designed for metal, liquid, paint, and just about any other material in question. Existing in several different memory capacities and configurations, they enable their end users – retailers – to uniquely identify each tag.
  • Middleware. This software component is used to configure and control the associated RFID readers. Based on the criteria set by the retailer, the smart shelf gateway signals an alert in real time that can be sent on-site to store managers, or remotely to merchandising and loss prevention personnel, as well as suppliers.
  • Back-end IoT platform. Once the data is collected, it is transmitted to a back-end IoT platform, which analyzes the aggregated data and provides insights, which later can be turned into actionable data.
  • Connectivity. The protocol which enables communication with RFID endpoints and provides for interaction between the smart shelf system and the IoT platform, can differ depending on the project’s tech specifications, be it Bluetooth, Cellular, or LoRaWAN technologies.
These are basic elements needed to make a smart shelf work; however, the typical tech architecture can be enhanced by a skilled IoT dev services provider with additional elements, to empower full-scale communication with consumers.

So how much does the smart shelf solution cost?

According to Pavel Shylenok, CTO at R-Style Lab, the development of the above mentioned elements of the digital shelf architecture, as well as its integration with third-party add-ons like CRM or ERM solutions, would amount to approximately $80,000. Of course, a more detailed calculation will be given, once your tech vendor has all the information about your vision of the project.

Enhancing the Smart Shelf Technology

These are basic elements needed to make a smart shelf work; however, the typical tech architecture can be enhanced by a skilled IoT dev services provider with additional elements, to empower full-scale communication with consumers.
Such IoT advances as Computer Vision (CV) and Machine Learning (ML) are successfully leveraged in building smart shelves. They can anonymously capture a wide range of data on shoppers (age, gender, ethnicity) without requiring them to perform any actions manually.
  • IoT sensors. This element remains complimentary to the whole system; however, the opportunities sensors can bring to the retail sector are boundless. The most basic application is temperature & humidity measurement, helping identify the optimum storage conditions. Weight and optic sensors are also used to collect data about customer movements and translate them into actions by targeting personalized offers and ads.
  • Image recognition cameras. Camera-enabled smart shelves make it easier for customers to navigate the retail environment, as well as apply AI technologies to provide customers with personalized recommendations.
  • Digital displays. This technology is used by Kroger, the US biggest supermarket chain, which has equipped 200 of its supermarkets with digital shelves. These displays indicate all the information needed by customers, from prices to nutritional and dietary information. They can also show ads and change prices in real-time, thus making shopping more personalized.
  • Mobile and web apps. The latest generation of smart shelves allows to send notification to a consumer’s mobile phone, integrate with their shopping lists, and navigate them through the aisles, while web apps stand for data analysis.
The main advantage of brick-and-mortar retailers, helping them compete with online shopping, is the visual and sensory experience which customers can get only shopping in physical stores. Re-thinking this experience, making it as customer-centric and pleasing as possible is becoming the retailers’ main goal. Equipping physical locations with emerging technologies, first of all smart shelves, can help them keep pace with an ever growing pressure from online ecommerce.
Did you like our post?

Subscribe to our monthly IoT digest!

Please, enter a valid email address
Please, agree with our privacy policy

Check out services we provide!

Get a Free Quote Now!

Popular Posts

Link copied to clipboard

Get 3 bonuses now!

Just Share Your Project Idea
(We'll Keep It Safe!)
& Get Your Bonuses for Free!

get for free now