IoT in retail is a very big topic for the industry. What applies to the retail industry in general, is particularly true for the food retail industry. Being driven by cost and customer satisfaction, many retailers recognize that they can improve their cost-efficiency and in-store customer-experience with IoT use cases. In light of this, there is a rising interest for retailers to digitize stores and create smarter processes. In the following, we give an overview of the current digitization trends in the food retail industry and how it can benefit from new IoT technology.
White paper "The connected retail store"
Based on discussions with our customers, we have written a white paper on how the IoT helps retailers to improve operational efficiency, customer experience and to build a connected store.Download white paper
Even though retail digitization efforts started quite some time ago, the areas of application are getting more diverse. Traditionally, digitization efforts in food retail evolve around optimizing logistics and in-store processes. The goal here is to be able to deliver products to consumers as fast as possible, reduce heating costs, avoid food spoilage, comply with legislation, and much more.
Today, we see that food retailers are aiming to improve the customer in-store shopping experience. The retail market has traditionally been a cost-driven industry. However due to competitive pressures from online-shopping and low-cost providers, retailers are looking for ways to offer a better customer experience. For instance, how they can reduce waiting times at the reverse vending machine or at the checkout.
Edge and cloud computing for IoT
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Smart technologies enable IoT use cases
One reason we expect digitization in food retail to accelerate is that device connectivity is becoming pervasive in the retail industry. For instance, thanks to smartphones, staff can be automatically notified anytime and anywhere within the store or back office. This is particularly helpful when it comes to optimizing in-store operations. Remote monitoring of devices and notification of equipment errors are some examples. Store equipment, such as refrigerators and reverse vending machines, is being equipped with sensors. This makes it easier to create a connected store. Finally, edge computing is making it easier to connect different store equipment with cloud computing. This makes it possible to create new processes and applications for the store.
IoT for food retailers: from WiFi to process automation
We talk a lot with different food retailers in order to get a feeling of how far they are in the digitization process. What makes the discussion about digitization quite challenging is that the retail market is very fragmented. Although some retailers are organized with a central headquarter, most of them are operating as a decentralized cooperative, which makes a cross-regional digitization approach difficult. For every retailer, food and non-food, IoT and digitization mean something slightly different. It often raises the question: what is “IoT in retail”?
For some food retailers, IoT and digitization merely means to renew the equipment in their store, establish a reliable WiFi connection or install electronic shelf labels.
Other companies are talking about “real” IoT use cases. They plan to connect their entire store to make their equipment ‘smart’. From the connected equipment, they will be able to collect and aggregate the device data that can be used to create dashboards and visualizations. Other food retailers consider this level of visualization only as the first step. For them, the long-term goal is the automation of certain in-store processes triggered by connected devices.
IoT for food retailers: bringing together different device manufactures
One major challenge for food retailers is that their store equipment is provided by a collection of different hardware vendors. There are cooling devices, bake-off stations, temperature sensors, air-conditioning, store lightings, reverse vending machines, and many others. But even within one IoT use case, retailers need to connect devices from various hardware vendors.
Connecting devices from different vendors, requires the retailers to individually negotiate with each vendor for the same use case. Also, every one of these vendors will bring their own dashboard to visualize and analyze the data. If a store manager has a problem with the cooling unit of one vendor, he or she needs to login to the vendors’ dashboard. For another cooling unit, he or she will have to login to a completely different platform. This can create an enormously complex environment for a store manager.
In order to solve this complexity, food retailers require a solution that is able to communicate with all the different vendors and allows them to monitor different hardwares from a single dashboard. They require one platform, which enables them to control the complete hardware environment in one store.
This brings about the long-term goal of some food retailers. They require a solution that allows them to monitor all devices and machines, and automatically triggers action in case a pre-defined situation occurs.
One example might be the reverse vending machines. Once the machine becomes 80% full, the system sends a push notification via email, text message or via a mobile app to the employee of the retail store. It informs the employee in advance, so he or she is able to empty the reverse vending machine before a queue forms. Instead of waiting for a failure alarm, the solution is able to foresee a malfunction up front. This increases the efficiency of the entire process and thereby increases customer satisfaction.