Retail demands interoperability

Devices embedded with the ability to communicate with each other are already here. Shijo SunnyThomas writes about the impact, not just on the supply chain but on the entire gamut of retail customer experience

It is predicted that by 2020, over 25 billion devices will be Internet connected thereby interacting with each other to provide a range of services to its users. This will lead to the creation of new business processes, business models and also a new dimension to how much technology will impact all aspects of our daily lives. Machine to Machine (M2M) communication is said to be a disruptive innovation and holds immense benefits for companies that take advantage of it.

The term ‘Internet of things” refers to an ecosystem of devices built on the foundation of M2M communication, which connect, interact and interpret with each other. Devices and consumer electronics products will be manufactured with a standard capability to uniquely identify themselves and also communicate with other devices in its environment. These devices will also have the capability to store certain amount of data and take certain decisions based on the data received from its surroundings. The usage of such devices is already seen in industries such as automotive and healthcare.

What was an academic concept a few years back is now a full-fledged activity in many large organisation’s research and development units. There are committed investments in terms of infrastructure and people who are already churning out implementable business cases for M2M communication. The rate of advancements in storage and processing power, coupled with the drop in hardware, storage and processing costs is powering the rate of adoption of M2M technologies in a much faster manner.

Organisations in some sectors have already started implementing M2M application in some business areas, such as automobiles providing real time information on all operational performance to a service center. Meanwhile, many industries are contemplating much wider and revolutionary business usage of M2M communications.

A lot of the basic components required are already in place and have achieved a fair mind share with retailers, technologists as well as the consumers. The devices will generate a constant stream of a variety of raw data which will need to be recorded and analysed. If you feelthe most credible case for big data was social media activity, then wait till you hear about the intricacies of handling and utilising machine generated data. The analysis of M2M big data requires a high degree of processing power and real time decision enabling. In memory processing and analytics technologies in play today offer businesses the ability to make real time decisions at much lower costs.

Scalability at the lowest costs is also a major factor, considering the proliferation in devices, data streams and usage. Cloud infrastructure, processing and applications provide a fillip to these requirements by offering unlimited scalability. The cloud also functions as an integration layer to connect diverse set of applications.

RFID & M2M Communications

The retail world is already familiar with the ‘Internet of things’especially within the supply chain function. RFID tagged items have started offering real business advantages in terms of supply chain visibility and responsiveness. RFID tagged items offer a wealth of data on item location, quantity, characteristics, velocity and ambience. This information can be captured to analyse and trigger supply chain activities such as automated replenishments, reject damaged or perished items, improve lead times etc.Significant RFID innovations have taken place to create tag types based on product characteristics, multiple tag sizes and improved durability through the use of washable tags. Added with falling prices of RFID tags, will highly increase and improve the applicability of its use within retail.

The most exciting cases of M2M applications in retail will be around customer facing business processes. Retail devices communicating through the Cloud to sense and respond to shopper or public devices will shape the future for M2M communications in retail. Through these, M2M will highly improve the predictability factor of the retail business. Retailers can quickly sense shopper actions and sentiments to conduct real time actions and improve the sales. Customer buying preferences can be sensed in real time, making it easy for retailers to position products and prices in the most profitable manner.

Consumer mobile devices will be the first and logical sensors that retailers will use to completely tailor the shopper experience based on shopper preferences. Mobile device data can be accessed by in-store devices to identify the shopper and suggest offers and promotions. Sensor based displays in trial rooms or product sections can display product images and videos of those products that the shopper picks up for trial or inspection.

Real time pricing can be accomplished by taking into account all store factors, environment attributes and product characteristics. The information from all store locational sensors can be transmitted to an analytical engine which in turn transmits the information to electronic shelf edge labels.

Digital Signage

Digital signage has helped retailers better communicate with shoppers. The messaging on the digital signage can be tailored in real time by leveraging various data such as foot fall, ambience, location characteristics, time factor and video feeds. This information can further be leveraged by energy devices within retail stores to adjust consumption based on store demand, resulting in energy savings costs. The information can also be leveraged by workforce scheduling applications to balance the available workforce based on shopper behavior.

Store implications of M2M communications will involve sensors inputs or device inputs from multiple points within the store. People counters, store video cameras, ambience monitors, product RFID tags, shelf tags, shopping carts, vending machines, payment stations etc can all function as sense points. An important factor is to leverage and integrate all these points through a retail gateway which functions as a gatekeeper to all data that is being emitted from stores. The data is fed into large analytics platforms and responses are sent back again through the gateway, back into store devices or consumer devices.

Challenges

The biggest challenge that will slow down the rapid adoption of M2M applications will be the lack of interoperable standards. A typical M2M ecosystem will consist of hardware vendors, integration layers, application providers, infrastructure providers. To establish communication and operating standards between all players is no mean feat. M2M standards too, will go through its own phase of evolution.

The application scenario of M2M applications can be as futuristic as refrigerators sensing low stock situations and automatically triggering an order to the store. While that might take some time, sensing the presence and the needs of the customer and instantly fulfilling it, is the paradigm that needs to be adopted first. This is what the industry is shifting towards and as time progresses; the ‘Internet of things’ will become more visible in our daily lives.

Know the author:

Shijo Sunny Thomas is the Industry Lead for Retail at Fujitsu Consulting. He is an avid retail enthusiast and a technology professional.