Internet of Everything and the Changing Retail Experience
The retail experience has undergone a massive transition recently as digital technologies have brought the number of connections to hugely increased levels where people, process, data and things converge, what Cisco coined as the “Internet of Everything” (IoE). We see IoE applications across vertical markets, what we are calling the “Internet of Vertical Solutions” (IoVS), where all connected hardware and analytics intersect to assist a particular vertical in how it delivers products and services. The effects of the IoVS have already been seen in the retail sector.
Cisco projects that the 13 billion connections that exist today in the IoE will grow to 50 billion by the end of the decade, meaning more real-time data will be available to any particular vertical looking to analyze and act on it. Cisco also conducted a survey testing 19 shopping concepts on consumers which provided a brief overview of how open consumers were to IoE concepts. The study found the use cases tested would provide $312 million in total gross annual value opportunity (15.6 percent improvement in profitability) for a hypothetical $20 billion retailer.
So what does it all mean? A more connected retail environment will not only take full advantage of the revenue opportunity at stake, but will allow operators to build on that number. As the retail environment becomes more connected, more data becomes available. For the IoVS in retail, we see a number of solutions that could help retailers makes more informed decisions on the large amounts of data available through the IoE.
Integrated Camera Technology
As top customers enter a store, cameras with facial recognition capabilities can alert sales associates via a mobile POS device, so they are prepared with data regarding preferences and past purchases. This helps better tailor the experience to the individual customer and provide that personal touch which is especially important for high-end retailers. In addition, cameras featuring heat-mapping tech can identify high-traffic areas in-store to make recommendations on in-store advertising and upselling opportunities with the use of digital signage. Heat mapping can also recommend when to open additional POS terminals to maintain high checkout optimization and speed of service.
After entering the store, another level of customer engagement comes from beacon technologies. They are a proximity-based communication solution conducted via Bluetooth which allows retailers to offer customers discounts and product information – that is specific to their location in a store – via their own shopping network and/or mobile app. These networks are opt-in, ensuring customers only receive information and discounts relevant to them.
Shelving solutions allow for real-time price changes based on inventory and in the event an item goes out of stock, alert the retailer to ensure replenishment. It goes without saying but customers can’t buy products if they’re not in stock and empty shelves can reduce sales by up to 4 percent.
Tablets offer retailers remote store management capabilities and the ability to react to the real-time data provided by other connected devices. Operators can also pull up inventory right from the floor to check availability of different sizes and colors, increasing engagement. In addition, tablets offer mobile POS capabilities that can optimize checkout for improved speed of service and customer experience, ensuring greater ROI. Some mPOS solutions also offer integrated payment options which is important with the upcoming EMV mandate.
With the assistance of camera and beacon technology, digital signage can tailor offers to a particular customer based on past purchases and preferences. As mentioned before, heat mapping technology can inform digital signage to upsell items based on high traffic areas or push out high inventory items to ensure as much is sold as possible.
Interactive signage solutions take engagement to a whole new level – intuitive touch screen navigation can provide customers with relevant and personalized content, the ability to check inventory, speak with an associate via video conferencing as well as wayfinding information around the store. Other interactive aspects include the ability to determine the customer’s gender and make clothing recommendations on the screen for them to see in addition to makeup choices with digital signage able to scan a customer’s face for skin composition resulting in the best options tailored to them.
Smart mirror technology can scan a customer’s face at the cosmetics counter for skin composition resulting in the best options tailored to them. With interactive capabilities that act as a dedicated beauty advisor, it can diagnose skin details and log them daily to see how a user’s skin has changed overtime, making recommendations accordingly.
Despite these business optimization opportunities, retailers are not transforming quickly enough according to another Cisco report, with 55 percent of the $179.6 billion of Value at Stake going unrealized in 2013 due to inefficiencies with out-of-stocks, checkout optimization and a fully integrated omni-channel platform. However, Cisco also found that retailers were planning to invest money in creating a more connected store in the coming years in order to maximize efficiencies and capture revenue currently going unrealized.
To learn more about Panasonic’s work with IoVS, check out the below interview with Panasonic President of Panasonic Systems Communication Company, Rance Poehler at Cisco Live!
Be sure to check out Panasonic’s Retail Solutions for more about our offerings in the space.