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In the conditions of intense competition in the retail market, retailers need to look for new ways to automate business processes and improve the quality of customer service. Smartstores allow to solve these tasks. Here we look at how Internet of Things smartstores can be useful in retail, who specializes in manufacturing IT solutions for intelligent stores and where such technologies have already been implemented.
Internet of Things: use of smartstores in the retail industry
A smartstore is a concept that describes the principle of automating retail trading platforms utilizing the Internet of Things (IoT) technology. To automate these processes, RFID sensors, POS terminals, smart shelves, smart carts, video cameras, Big Data technology and many other solutions can be used. As a result, retailers gain ample opportunities to optimize their business processes and improve the quality of service to their customers. For example, by using RFID tags and specialized software, you can control in real time the types of goods that were taken off the shelf, which ones were loaded into carts, which ones were paid at the checkout, etc.
Here are some of the main benefits and shortcomings of the Internet of Things-powered smartstores that retail companies deal with:
Internet of Things retail applications: bringing the smartstore concept to life
According to Grand View Research Inc., by 2025 the global IoT retail market is expected to reach $94.44 billion USD. A significant share of these funds will account for smartstores. Among the technologies used in smartstores, the highest growth during this period will be demonstrated by Bluetooth Low Energy (BLE) solutions. The growth of the sensor market for retail chains, taking into account the compound CAGR percentage, is expected to be around 24% per year.
The key market for the Internet of Things retail solutions is Latin America. By 2025, the share of Latin America’s revenues will be more than 12% in the structure of global retail sales. Asia-Pacific region will also show a tremendous growth due to economic stability, an increase in the number of smartphones among users and a high rate of Internet distribution.
Grand View Research also reports that the relationship between IoT developers and retail companies will mainly be built on the following principles: software as a service (SaaS) and platform as a service (PaaS). At the same time, experts identify the following factors, which can negatively affect the development of the industry:
- Lack of uniform technological standards;
- Impossibility to completely protect smart devices from external interference.
The potential vulnerability of a smartstore from cyberattacks can become a real obstacle for the development of the whole industry. The Internet of Things retail devices, hardware components and software applications can be attacked at any time by cybercriminals and disrupt the work of all stores, which is a concern for many retail chain managers.
The Internet of Things in retail industry: companies dominating the smartstore market
Key players in the market are now companies such as Intel Corporation, Impinj Inc., RetailNext Inc., Allerin Tech Pvt. Ltd., and Losant IoT Inc.
However, in recent years a large number of start-ups have also appeared on the market, the products of which are often in no way inferior to the IT giants in quality. So, if you have an idea for an IoT retail solution (and provided it stands the feasibility test!), you'll be able to compete with Intel as equals!
In October 2016, CB Insights released a map showing the leading startups on the IoT retail market.
The map is divided into the following sections:
- Beacon- and sensor-based analytics. The companies in this group provide hardware and software solutions to help stores track visitors, optimize staff time, control discounts, monitor promotions, etc. Euclid Analytics, for example, provides an analytics platform which monitors the visitors and determines how the promotions affect the attendance of the store;
- Beacon-based marketing. The solutions of this group also track the customers, but use this data for marketing purposes. For example, Estimote sends push notifications about products or promotions to the phones of buyers who are nearby. Kimetric’s sensors visually track the age of buyers, their gender and clothing style to present them with an individual marketing proposal;
- Beacon analytics and marketing. The solutions of this group are aimed at correlating internal analytics and marketing research;
- Inventory tracking. QueueHop develops special sensors that are designed to protect goods from theft. Sensors automatically unclip off the goods after their purchase. Another startup, Cosy develops robots that monitor products using specialized indoor mapping software;
- Indoor mapping. These startups create detailed maps of shops and shopping malls. This allows retailers to help shoppers find the right products and get information about the current discounts or promotions;
- Service robots. Startups Simbe Robotics and Fellow Robots are developing robots that will help customers quickly find products and ensure the shelves stay stocked. Fellow Robots plans to launch LoweBot in eleven stores this fall;
- Loss prevention. Gatekeeper uses RFID tags with automatic wheel locking, so that they do not release shopping carts without paid purchases;
- At-home shopping buttons. Startups Kwik and Hiku offer specialized devices that allow users to order different products directly from home. Similar to the Amazon Dash buttons, Kwik enables customers to re-order products with a single click, while the Hiku device can scan bar codes to identify the goods for re-ordering, and can also recognize the voices of users;
- Smart dressing rooms. Letting the shoppers request new items from the store, adjust lighting in the fitting rooms, and see outfit recommendations is also a reality now. Oak Labs created an interactive, touchscreen mirror which (with the help of RFID tags) can determine which goods the buyer brought into the room and then recommend related products. The startup already works successfully with the sales network of Polo Ralph Lauren shops.
Right now, the most famous smartstores are implemented in companies Walmart and Metro Group Future Store. Walmart stores already use technologies that allow you to immediately scan all the codes of the buyer’s goods and give the final purchase price. You can pay at the exit through the application, and not wait for your turn in front of the cashier.
The largest online retailer Amazon has launched a smartstore Amazon Go, which is fully built on the principles of self-service. On the shelves in the store you can find built-in sensors with computer vision and deep learning capabilities. Thus, the system will understand when the goods are taken off the shelf, and when they are being put back. As you collect purchases, they will all be marked in the virtual shopping cart. As soon as the buyer leaves the store – the money will automatically be written off his account.
What the Future Holds…
Specialists from all over the world have already started to talk seriously about the fact that Amazon Go will become a prototype of smartstores of the future. To maintain a shopping area of 10 to 40 thousand square feet, retailers will need no more than 6 people.
In 2017, according to Vend, “seamless omnichannel strategies will once and for all become absolutely essential, and retail will propel itself into the future through implementation of experience-enhancing technology such as artificial intelligence and augmented reality.” Provided you address a reliable software vendor, allocate a sufficient budget for research and follow latest tech trends, you will succeed, too.