Store IoT platforms are set to go mainstream

Photo: Getty Images/ipopba
Sep 29, 2020

Through a special arrangement, presented here for discussion is a summary of a current article from the blog of Oliver Guy, Senior Director, Industry Solutions, Software AG.

The real-time store Internet of Things (IoT) platform is moving into the mainstream, climbing out of the “trough of disillusionment” into the “slope of enlightenment,” according to Gartner’s “2020 Hype Cycle for Retail Technologies” report.

These platforms “monitor, analyze and display store activity through dashboards using a real-time data infrastructure, via signals and alerts from real time data sources that are available within the retail store,” according to Gartner.

Few, if any, existing in-store technologies enable retailers to reap the benefits of the “network effect.” Within an IoT context, the network effect connects multiple individual initiatives together holistically to benefit from their synergy.

More than this, it enables an automated and rapid response to events within the store or supply chain: adjusts lighting in response to in-store traffic; automatically adjusts a promotion in response to unforecasted demand; proactively deploys staff based on projected need; replenishes product on shelf, just-in-time — the list goes on.

Gartner considers this approach “essential for unified commerce execution in a digital business environment.” Significant benefits cited included:

  • Increased sales, margins and customer service through improved availability, merchandising, pricing and staff deployment;
  • Reduced costs through improved task management and reduced energy consumption.

Another area highlighted due to recent events is monitoring and ensuring social distancing for both associates and customers.

Gartner considers the application of this technology to be transformational — enabling “new ways of doing business … that will result in major shifts in industry dynamics.” Given the potential to increase operational efficiency through insight-driven automation — and that this would be a key data input for the autonomous supply chain — it is not difficult to see why.

The report acknowledges that there is no single platform that can handle all the components needed within a real-time IoT platform. To benefit from the network effect, they must be connected together.

The study arrives as COVID-19 lockdowns, subsequent restrictions and changes to operating practices has further squeezed grocers’ lean operating margins. Technology offers the potential to double store profitability but also deliver a harmonized customer experience — and now really is the time.

DISCUSSION QUESTIONS: Will or should the pandemic accelerate the use of IoT-type technologies to drive increased productivity through insight and automation for grocers?  Is there sufficient understanding of the potential for “network effect” synergies?

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"Many retailers – especially grocers – operate on thin margins and will be hesitant to invest. This is a bit ironic as technologies such as this can, in fact, improve margins."

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13 Comments on "Store IoT platforms are set to go mainstream"

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Suresh Chaganti

In-store technologies and their potential benefits have their place, but in terms of impact there are far more attractive ones to invest in currently. BOPIS, curbside pickup and MFC capabilities have become far more critical and urgent than IoT.

Bob Amster

BOPIS and BOPAC are not technologies, though, they are concepts aided by technology. Often, that technology is IoT…

Suresh Chaganti

BOPIS and BOPAC need technology to enable them. The point is they take money, technology, resources and mindshare. Available capital is finite, and it is always a matter of priority. In-store IoT, in my opinion, does not rank high enough for many retailers during these times.

Michael La Kier

The pandemic has accelerated everything for retail — sometimes upward and sometimes downward. Retailers seek increased productivity and efficiency throughout their operations. IoT solutions are a potential game-changer but, like everything with retail, it will come down to a cost-benefit analysis. Many retailers – especially grocers – operate on thin margins and will be hesitant to invest. This is a bit ironic as technologies such as this can, in fact, improve margins.

Oliver Guy

Completely agree with your ‘ironic’ comment.

Bob Amster

IoT technology’s direct effect in retail is to streamline processes and, therefore, increase productivity. Networking of IoT-type technologies is the next frontier. The COVID-19 pandemic continues to accelerate the development of enhanced technologies and the re-engineering of many in-store processes. One unforeseen positive consequence of an otherwise disastrous pandemic, is that many a crawl to implementing new IoT technology in the retail industry have now become a dash to get existing solutions in place, and to to creating new solutions. This is the silver lining under an otherwise dark cloud.

Raj B. Shroff

Retailers should have been thinking about this before the pandemic. It might accelerate it but those on its trajectory had already see its potential for improving efficiency and experience.

As for potential understanding of network effects, in theory they do, it’s a basic concept. The challenges will be implementation due to cost, existing legacy systems and general understanding of tech by senior management. New upstarts with tech savvy founders would bake IoT into their infrastructure and try to leapfrog many technologies used in retail today.

Harley Feldman

The pandemic will accelerate the use of IoT-type technologies due to consumers’ increased demand for store purchases and the need to move more products through the stores in shorter time frames. The stores need additional help in ordering replacement products, stocking the right shelves and doing in-store shopping for online orders. IoT sensors provide valuable data helping stores manage and execute the increased pace of activities.

The network effect synergies are much harder to accomplish since different vendor systems and applications will need to have their data integrated for the network effect to occur. Skills will be needed in the individual applications, knowledge of the data produced, and how these disparate pieces of data need to be integrated, a complex task not well trained for by many technical people.

Nikki Baird

I think retailers consistently underestimate the value that digitizing all kinds of information could have for them, and the black hole of stores is one area where it is particularly disregarded. I’m hoping someone decides to take the leap and light up a whole bunch of stores AND dedicate people and analytics to understanding what can be learned – because you need both halves to really get to the value. But I fear the long term impact of the pandemic will be that this takes much longer to get to than Gartner is saying.

Brent Biddulph

IoT (or Edge) has already gone mainstream with retail leaders (winners) – even and especially with grocers and mass merchants. The value proposition (ROI) to leverage IoT to improve in-stocks, enable in-store/micro fulfillment, ensure merchandising compliance, even cost offset via data monetization with trading partners (network effect) is no longer an experiment – it is happening today.

Ken Morris

The pandemic has the potential to take three to five years out of the adoption curve for IoT. The challenge we face is putting together the infrastructure to enable this paradigm shift. To take full advantage of the “network effect” we must orchestrate the disparate islands of automation into a sense and respond, real-time entity. Real-time retail is something I have been preaching for over 10 years but the adoption has been slow. Leveraging IoT has the potential to put hard savings into the ROI calculation by reducing headcount. It is hard to justify infrastructure investment but adding something other than increasing sales into the ROI changes the equation.

Ken Lonyai

I’m a technology guy — but what does retail IoT mean? It’s such a vague phrase like “I ate food” that there’s no real depth to discuss here. I can think of “IoT” shelf technologies that can help retailers in any economic environment with things like real-time inventory, but I don’t see much cost/benefit argument specific to a pandemic economy. When the pandemic crunch hit, anything/everything was getting bought, [even if only for home delivery] and supply chains were breaking. So although I can talk about the benefits of cool tech all day long, without some specific, validated use case, pandemic economics dictate better areas to focus time/money on. One “low tech” example: drastically improving the UX of Whole Foods third rate web ordering/fulfillment.

Ananda Chakravarty

Regardless of its attractiveness, IoT Platform solutions are relatively unproven, with a limited set of select cases that add value for retailers. Costs can be enormous, and retailers don’t know what they’re getting. Select cases can be developed for fractions of the cost of a full IoT platform (rare) and deliver outstanding results, but as soon as they’re integrated with other solutions the costs increase multifold.

It would be great to see IoT become mainstream, but there’s some time to go before this happens, including better standardization, clearer use cases, and execs who are willing to be first movers with limited capital that could be spent on anything but the shiny new (or is it old now?) object. Lot of risk, not enough reward (yet).

"Many retailers – especially grocers – operate on thin margins and will be hesitant to invest. This is a bit ironic as technologies such as this can, in fact, improve margins."

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