Using the Internet of Things to Achieve “Frictionless Retail”

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Using the Internet of Things to Achieve “Frictionless Retail”

By Shaun Kirby - 06/27/2016
The Internet of Things (IoT) has finally matured to where frictionless retail is becoming real. By digitizing business processes and employing IoT technologies such as edge analytics, cloud computing, mobile, sensors, beacons and more, retailers can reduce friction and optimize everything from product design and manufacturing, to distribution, to the customer’s in-store shopping experience and purchasing processes.

One of the areas we’re seeing this transformation is in the way retailers are employing IoT technologies to turn their stores into living laboratories that generate real-time insights on how shoppers are responding to products, packaging and displays. For example, The Dandy Lab uses interactive mannequins, visual discovery engines, location analytics from shoppers’ mobile data and even video analytics from cameras aimed at shoppers’ feet to better understand how their customers interact with products and behave in store. They gain valuable insights needed to improve their merchandising displays and also share the data with their supply chain partners so product designers and manufacturers can make rapid adjustments in real-time.  In this way, IoT technologies remove the friction of needing to create test showrooms or pay fictitious shoppers in an effort to gain insights into consumer behavior and can optimize short-run manufacturing.

Moving down the supply chain, the IoT is also removing friction from the distribution process. Walmart recently announced its use of drones in its distribution centers to speed up inventory checks. Other retailers are utilizing wearable technologies, computer vision, analytics and weight sensing shelves to track inventory in real-time and better understand when products will arrive at or leave distribution centers. Distributors are attaching sensors to loading docks, truck fleets and even drivers, making distribution more predictable and helping retailers keep their shoppers better informed of when products will arrive.

Perhaps the area where the IoT is reducing friction the most is in the customer’s in-store shopping experience. Video analytics, smart shelf sensors and RFID tags help make sure retailers’ shelves stay stocked optimally, eliminating shopper frustration or abandonment and the friction of sending an associate on a special trip to pull an item from the back room when it’s out of shelf. Video analytics and sensors placed in parking lots and on shopping carts give retailers insights into how customers are moving through the store and enable them to predict as far as 30 minutes in advance when there will be a rush at the checkout so they can open more registers to prevent lines from forming. Retailers today are also increasingly equipping their sales associates with mobile point-of-sale (POS) devices, allowing the associates to move onto the floor, consult with customers, check inventory, find and purchase items available at other locations and have them delivered straight to the customer’s home.

Even after consumers get their purchases home, the IoT is still reducing friction. Retailers can take advantage of smart pantries to provide the convenience of predictive, proactive ordering so consumers don’t need to travel to the store when their commonly used items are running low.

The goal of frictionless retail has been just over the horizon for many years, but rapid growth of the IoT if finally making that goal a reality. By digitizing and automating business processes, connecting people, systems, machines and other “things” and applying advanced analytics that deliver real-time insights, retailers and their supply chain partners are able to improve operational efficiency, reduce costs and drive increased sales.

Shaun Kirby, CTO for Rapid Prototyping, Cisco

As CTO for Rapid Prototyping at Cisco, Shaun Kirby is responsible for sensing and evangelizing the key trends that will disrupt and transform the business world. Working across industries, he incubates game-changing solutions to propel customers ahead of the curve, while leading the interlock between the field and Cisco Engineering and Research and Development.

Kirby’s current role is backed by years of deep industry experience. 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.

Before joining Cisco, Kirby served as the Chief Architect for Vitria Technology's Professional Services team. Kirby has also served as a trusted advisor to CIOs, CTOs, and other technology executives, beginning with his extensive experience as a management consultant at Deloitte. Kirby holds a B.S. in Electrical Engineering and Engineering Physics from Princeton University, and a M.S. and Ph.D. in Physics from the California Institute of Technology.