Can the Internet of Things Finally Deliver on the Promise of Frictionless Retail?
The recent growth of the Internet of Things (IoT) has brought the elusive concept of “frictionless retail” closer than ever before. By digitizing business processes through connecting smart devices and sensors at the network’s edge and applying advanced analytics, retailers can reduce or eliminate points of friction that negatively impact customer experience, sales or operational efficiency.
Retailers and their partners are using IoT technologies to remove friction at every point throughout the supply chain, beginning with product design and manufacturing. Using edge devices like IP video cameras, weight sensing shelves, beacons, and mobile devices, retailers are turning their stores into living laboratories that generate insights on how customers interact with merchandise displays, products and packaging. By communicating these insights up the supply chain to their partners, retailers are playing a more active role in improving product design and can enable manufacturers to make rapid adjustments, such as ramping up production to account for unexpected demand.
In warehouses and distribution centers, IoT technologies such as connected forklifts, drones, voice-activated order picking solutions and sensors on trucks and loading docks are enabling retailers to track timing of key deliveries and avoid bottlenecks. By providing real-time information and improving efficiency in warehousing, these IoT technologies are helping reduce the need for stock checks, automating resupply and enabling retailers to keep customers better informed of when specially-ordered items will arrive.
While IoT technologies can certainly remove friction in the supply chain, it’s the consumer’s in-store shopping experience where IoT truly delivers on the promise of “frictionless retail.” IoT technologies are eliminating checkout lines, providing frictionless payment methods, helping customers find products, delivering personalized service and more.
For example, one of the greatest sources of friction for shoppers is the checkout line. Using IP cameras, video analytics, sensors in parking lots and on shopping carts, retailers can predict when there will be a rush on the checkout as much as thirty minutes in advance and open additional registers before a line ever forms. Retailers can use mobile analytics technologies to automatically recognize a customer by their mobile device when they walk in the store and remember their payment information, allowing the customer to pay with a single click on their mobile device at the point of purchase.
Other retailers are using IoT technologies to eliminate the frustration customers experience when they’re not able to find the right product in the store. Fashion retailer F&F Clothing allows shoppers to use their mobile phones or digital kiosks placed throughout the store to scan barcodes on clothing tags in order to find additional sizes or colors online. The customer can order the item for next-day delivery and leave the store satisfied rather than disappointed that the item they wanted was not available.
Denim brand True Religion recently equipped sales associates in select stores with Apple watches, allowing them to bring up real-time inventory information while they’re assisting shoppers. Associates can cast their screens onto larger digital screens in the store so shoppers can see what they see. Within just a couple weeks, managers noted an increase in sales because associates can order items for shoppers on the spot instead of sending them online or to another store.
Lowes is testing the use of robots to help customers locate items in its stores. Customers can tell the Oshbotwhat they’re looking for or hold up an item to the robot’s 3D sensing camera. The Oshbot identifies the object, then guides the customer to its exact location in the store.
Even after consumers get their purchases home, the Internet of Things continues to eliminate friction from their lives. Smart pantries and tools like the Amazon Dash buttons enable easy or even predictive and proactive ordering so consumers never run out of their favorite items, and smart appliances can automatically schedule service and maintenance calls when needed.
While the concept of frictionless retail has been a goal for several years, it has mostly remained out of reach. Today, as the Internet of Things continues to grow and connect more people, processes, systems and data throughout the retail supply chain, the benefits of Frictionless Retail are becoming real. By digitizing business processes and adopting IoT technologies including mobile, edge analytics and cloud computing, retailers can not only improve customer experience and loyalty but also gain operational efficiencies and increase sales.
Shaun Kirby is chief technology officer of rapid prototyping at Cisco, where he is responsible for sensing and evangelizing the key trends that will disrupt and transform the business work. Prior to his role as CTO, he led Cisco’s Internet business solutions group innovations architecture practice, which developed robust reference architectures for visionary solutions.