Pattern Implementation in the Retail Domain

The chapter provides an overview of the retail domain and how IoT is set to transform this domain by enabling innovative use cases and applications. This chapter will help the reader in understanding the retail domain from a historical perspective and how IoT, along with other technologies, is expected to catapult it to another level.

The chapter also lists the challenges faced by retailers and how these challenges can be effectively mitigated by IoT. The information gained in this chapter is then used to show how a next-generation retail store can be realized, where the store, the shopper, and the merchandise are continuously monitored to gather useful insights and improve store operation.

An overview of the retail domain

The term retail transactions refers to the transactions where a product is sold directly to an end consumer for their own consumption. The retail industry is one of the fastest-growing industries and is marked by intense competition among existing players. Also, shoppers have high bargaining power due to the non-differentiated nature of the goods and the presence of multiple suppliers. All of this makes it extremely difficult for retailers to attract and retain a loyal customer base.

Another interesting aspect is the huge difference of scale at which retailers operate – ranging from tiny neighborhood mom-and-pop stores to all the way to mega stores. Another key feature of this domain is that shopper behavior doesn’t change drastically in short term, and this makes it easier for retailers to run analytics on the purchase history and provide more reasonable recommendations.

The domain has seen several transformations since its inception...

Using real-time IoT data

Real time IoT data (clickstream data from websites and footfall data from physical stores) is integrated with other systems, such as ERP, CRM, and Point-of-Sale (PoS) systems. This helps generate deeper and broader insights such as the following:

• The number of items on shelves can be determined to ensure automated inventory replenishment, and related systems (financial management, invoicing, taxation, and so on) are kept synchronized for increased efficiency and error reduction.

In addition to determining the number of products, this monitoring capability can be integrated with a pricing engine to recommend discounts on old products.

• Operational (energy consumption) and diagnostics data from retail store equipment (e.g., refrigeration, air conditioning, and lighting equipment) can be used to perform predictive maintenance, ensuring 24/7 operation.
• Sales trends and their correlation with factors such as seasonality help in redefining...

Use case – real-time tracking in retail outlets

Tracking shoppers within a retail outlet helps to understand shopper’s objects of interest and distribute the inventory and staff accordingly. Without real-time tracking of shoppers using cameras, it would be difficult to analyze the store pathways preferred by shoppers. Determining the queue length at cash counters and leveraging past data to predict waiting times helps avoid checkout delays and improves shoppers’ experiences.

Privacy concerns

Tracking shoppers can be done by performing video analytics at the edge (using a DG); however, this might result in privacy concerns. Retailers need to tread a fine line between gathering data for understanding shopper behavior/preferences and alleviating privacy concerns. Some of the mechanisms that retailers use to ensure this balance are as follows:

• Explicitly informing (and taking consent from) shoppers about the type of data being collated and its intended...

Summary

This chapter provided an overview of retail domain, the challenges faced by retailers, and how IoT can be used to transform this domain. By affixing sensors to humans and equipment, important actionable insights can be generated. Implementing data-driven recommendations enhances the customer experience and helps boost sales.

The chapter also illustrated how IoT technologies help track shopper journeys and understand purchasing behavior that is used by retailers to fine-tune marketing campaigns, resulting in an overall positive experience for the shopper.

The next chapter will start with an overview of the manufacturing domain and then discuss the role of IoT in realizing the vision of smart manufacturing.