Real-time store Internet of Things platforms are climbing out of the hype-cycle “trough of disillusionment” as stores prepare for a new future.
Operating margins for in-store grocery retailing typically run at between 2% and 4%. The impact of Covid-19 lock-downs, subsequent restrictions and changes to operating practices has put this under greater pressure. As a response to this, retailers are focusing even more efforts on digital transformation and are driving interest in innovative technologies.
I have discussed before how retail is going to change forever – I believe this pandemic will galvanize the retail industry to create an unprecedented burst of innovation and technology adoption. In groceries, in particular, stores are crucial as they become multi-purpose locations for not only in-store shopping, but also as picking locations for online orders.
Therefore, as a store owner, you must become more resilient; making your merchandising and supply chain execution more bullet-proof, making processes more efficient. Technology has potential to double store profitability but also to deliver a harmonized customer experience - and now really is the time.
This is why the real-time store IoT platform is moving to the mainstream, climbing out of the trough of disillusionment and up into the “slope of enlightenment,” according to Gartner’s 2020 Hype Cycle for Retail Technologies.
Monitor, analyze, display
According to Gartner, these platforms “monitor, analyze and display store activity through dashboards using a real-time data infrastructure, via signals and alerts from real time data sources that are available within the retail store.”
While multiple technologies have existed in stores for years, there are few, if any, cases where retailers are managing to reap the benefits of the “network effect.” Within an IoT context, the network effect connects multiple individual initiatives together holistically, to benefit from their synergy.
But more than this, it enables an automated and rapid response to events within the store or supply chain: adjust lighting in response to in-store traffic; automatically adjust a promotion in response to un-forecasted demand; proactively deploy staff based on projected need; replenish product on-shelf, just-in-time – the list goes on. Gartner said this approach is: “...essential for unified commerce execution in a digital business environment.”
Gartner also noted significant benefits in areas including:
- Increased sales, margins and customer service through improvements in availability, merchandising, pricing and staff deployment
- Reduced costs through improved task management and reduced energy consumption.
Another area highlighted due to recent events is monitoring and ensuring social distancing for both associate and customers.
Gartner said the application of this technology to be transformational – enabling “new ways of doing business … that will result in major shifts in industry dynamics.” Given the potential to increase operational efficiency through insight-driven automation - and that this would be a key data input for the autonomous supply chain - it is not difficult to see why.
The difficulty is connecting discrete technologies together. Gartner acknowledge that there is no single platform that can handle all the components needed within a real-time IoT platform. To benefit from the network effect, they must be connected together.
While there are vendors providing point solutions in this arena, only one can give you the ability to benefit from the synergies of the network effect – connecting to drive actionable insight. That is Software AG.
Learn how Software AG is applying IoT experience from multiple industries to help retailers deliver a real-time store IoT platform, driving operational efficiency and automation as part of the truly connected enterprise.