What's Next in the Connected Retail World?
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Transcript of What's Next in the Connected Retail World?
The Internet Of Things Has Arrived
“The Internet of Things Will Transform Retail As We Know It.” Keith Mercier Global Retail Leader for IBM Watson
“[The Internet of Things] will be bigger than anything that’s ever been done in high tech.” John Chambers, Executive Chairman of Cisco
IoT has piqued the interest of mainstream consumers
Worldwide Google search activity for “Internet of Things,” January 2008 – June 2015
Source: Google Trends
Why Now?
Source: Goldman Sachs, Cisco, IoT Analytics, GK Digital Media
Adoption of Mobile Devices
Cost of Sensors
Cost of Bandwidth Cost of
Processing
Shrinking form factors
Big Data tools + Infrastructure
Emergence of IoT
So, what does the term actually mean?
The Internet of Things (IoT) (n.) “Sensors and actuators embedded in physical objects are linked through wired and wireless networks, often using the same Internet Protocol (IP) that connects the Internet” IoT enables multi-way communications between objects and brands, objects and consumers, objects and objects. The result is a virtuous cycle of value improvement.
Source: McKinsey, HBR
Sensors
People & Processes Connectivity
IoT
The Internet of Things Consortium (IoTC) is comprised of more than 60
leading hardware, software and analytics companies – in areas including
home automation, wearables, connected cars, smart cities, 3D printing, and
virtual/augmented reality.
The IoTC is dedicated to the growth of the internet of things marketplace and the development of sustainable business models.
The Internet of Things Consortium
The impact of IoT The internet of things is revolutionizing our daily lives.
• Safety in our homes
• Commute to work
• Delivery of goods and services
• Health monitoring
• Improving the efficiency of industrial machinery
• City infrastructures
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Enhancing customer experience
Improving operational efficiency
Enabling creation of new channels + revenue streams
How IoT will play into Retail
IoT will…
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Enhance customer experience
Improve operational efficiency
Enable creation of new channels + revenue streams
IoT Impact on In-Store Experience
Personalized Shopping Experience Beacons
Wearables
Contactless Checkout Smart vending machines
Retailers are already setting up tech open houses
Target’s Open House provides a hands-on demonstration so consumers can truly experience how technology will improve their lives on a day-to-day basis
Baby’s cry is detected by onesie, alerting a
mother’s phone
Coffee maker is activated, and sound is piped in to
confirm the brew
Temperature adjusts and lights dim when
consumers lie on beds
Retailers are offering more connected touchpoints to simplify consumer shopping
The on-the-go shopper expects no hassle “in-and-out” experience
Push Notification Sent Upon Entering Store
for Latest Offers
Digital Signage for Additional Information
Contactless Payment During Checkout
What’s to Come (Part 2): Virtual and Augmented Reality
Neiman Marcus’s smart mirrors allow shoppers to compare several outfits side-by-side and share photos with friends
American Apparel’s shopping app transforms a physical product in-store to an informative, custom digital experience
Virtual Dressing Room Augmented Shopping
What’s to Come (Part 3): Connected Packaging and Buttons
SMART PACKAGING
Placing RFID chips on the package to learn more about the product or send special offers when the item is running out
Johnny Walker Smart Bottle
EXTENDING CONNECTED EXPERIENCES
Create added value experiences through augmented reality that provide either inform, entertain, or delight the user
Heinz Trivial Pursuit
HOME REPLENISHMENT
Provide consumers a personalized home inventory management device that replenish consumer goods automatically and on-demand.
Amazon Dash
IoT will…
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Enhance customer experience
Improve operational efficiency
Enable creation of new channels + revenue streams
IoT will…
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Enhance customer experience
Improve operational efficiency
Enable creation of new channels + revenue streams
Monetization of IoT Data
OPPORTUNITY
INDUSTRY EXAMPLE
IoT – through data sales – becomes its own profit center
Tesco works with Dunhumby to sell its purchase shopping data and analytics platform to CPG
suppliers for them to better understand behaviors and segmentation
OPPORTUNITY INDUSTRY EXAMPLE
Service Based Business Models
Industrial Printer 3D Printing Service
Shift focus from expenditures to pay-by-use model In order to drive sales of consumer 3D printers, Staples invests in a 3D printing service to get users comfortable
with the technology and software before purchasing
New Pricing Models
360pi IBM Real Time Pricing Intelligence Dashboard
OPPORTUNITY
INDUSTRY EXAMPLE
Dynamic pricing models based on customer preference supported through micro-segmentation
Ace Hardware catalogs inventory into IBM 360pi’s real time pricing intelligence tool to power dynamic pricing based off zone rather than setting a national price
Beacon Networks
OPPORTUNITY INDUSTRY EXAMPLE
Creation of a cloud-based beacon network Swirl’s cloud-based software allows retailers and marketers to plan and assemble on-premise ad campaigns. The ad format
appears as a full-screen takeover that auto-launches on a user’s phone when they are in the range of a beacon — which can be
as close a proximity as a certain aisle or even an area of a shelf.
Where do we go from here?
• Tweak behaviors, don’t reinvent them
• Consider the platform
• Start small, but keep an eye out for expansion
• Integrate technology and standards
• Partnership is key
• Think beyond the smartphone
• Consider new revenue streams
• Focus on data integrity
Help define future consumer experiences
Build an infrastructure for IoT
Call to action: 4 ways to get started now
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Upgrade Your Registers to Enable
Digital Payments
Deploy Smart Vending
Machines
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Make Your Shelves Smarter
with Sensors
Offer Personalized Messages at Home, in the Car, at the Store and On
the Mobile Device
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THANK YOU Greg Kahn [email protected] @GKmediaBUZZ
Sources Google Trends “Internet of Things,” January 2008 – June 2015 McKinsey Quarterly Insights and Publications, “The Internet of Things” HBR: Hui, Gordon, “How the Internet of Things Changes Business Models,” Harvard Business Review, July 29, 2014 Center Electric 2015 Goldman Sachs Global Investment Research Cisco Consulting Services, 2015 Higginbotham, Stacey, “Target opens up a new store in San Francisco to try out smart devices”, Forbes, July 9, 2015. Eliot, Lance, “Retail's new reality: Invisible shopping centers and virtual assistants,” CNBC, April 24, 2015. Quirk, Mary Beth, “Neiman Marcus, Nordstrom, & Other Retailers Trying on Smart Fitting Mirrors,” Consumerist, May 11, 2015. Takahashi, Dean, “Thinfilm’s smart bottle tells you if your Johnnie Walker scotch has been opened before,” Venture Beat, February 25, 2015.
“QR Code Review Heinz Trivial Pursuit,” Scan This Guide, July 22, 2014 Perez, Sarah,” What’s It’s Like to Use Amazon’s Dash Buttons,” TechCrunch, August 3, 2015 Karlin, Sarah, “Staples 3D Printing Service Has Arrived,” Fast Co Create, May 5, 2014 “360pi And IBM Collaborate To Help Retailers Price Competitively In Real-Time,” Innovation Retail Technologies, September 30, 2014 O’Reilly, Lara, “Beacons can finally become massive deal, thanks to Twitter,” Business Insider, April 23, 2015 Desarnauts, Bernard, “Wristley Apple Insider’s Report #16,” Medium, August 18, 2015 Smith, Cooper, “How beacons – small, low cost gadgets – will influence billions in US Retail Stores,” Business Insider, February 9, 2015 Bacheldor, Beth, “NeWave Sensors Solutions Unveils Smart Shelf To Track High Volume, Fast Moving Consumer Goods,” RFID Journal, March 6, 2014 Kasznik, Efrat, “5 ways the ‘Internet of Things’ transformed the vending machine,” The Business Journals, April 10, 2015