Guest Column | June 23, 2016

Why The ‘Internet Of Things' Is Driving Infrastructure Spending By Retailers

6 IoT Predictions For 2015

Featuring Todd Cripe and Velda Goodin

There is a lot of buzz today about the Internet of Things (IoT)—but is it a small wave to let pass, or is this a “big one” that RSPA members should be ready to ride out?  This technology trend touches many parts of the retail IT market and is expected to be a bigger part of retail IT budgets in 2016 and 2017.  In this article, Todd Cripe of Best of Breed Solutions and Velda Goodin of ScanSource explore what’s driving these expenditures and how RSPA members can benefit from these trends.

What is the definition of the ‘Internet of Things’ (IoT)?

TC: IoT or IoE (Internet of Everything) can be defined as enabling physical objects in the real world to be visible in the virtual world.  The phrase Internet of Things was originally coined in 1999 by Auto-ID labs during an RFID project.  Devices that enable physical objects to become virtual include passive sensors that allow a one-way monologue or active sensors that offer a two-way dialogue. 

Is IoT all hype or is it soon to become table stakes for Retailers?

TC: IoT is absolutely being hyped today, just like NFC was being hyped a few years ago. Fortunately, IoT doesn’t have the same drama surrounding it that NFC did a few years ago where the payment and telecom stakeholders engaged in battle over secure element schema adoption. There are multiple real world usage cases for IoT that will potentially become table stakes that don’t require industry or vendor hype in order to be recognized by Retailers and VAR/Resellers as having significant value.

What is keeping Retailers and VAR/Resellers from deploying IoT solutions?

TC: There are four barriers to IoT deployments:

Marketing – Understand the benefits IoT provides to the Retailer and their customers.  

Technology – Learn how it works and what an installation looks like.

Financial – Understand the tangible and intangible ROI. 

Operations – Operations and marketing executives need to align their interests and goals.

You get past these four barriers and not only will stakeholders care about IoT, Retailers will deploy the enabling infrastructure needed for the deployable solutions that provide the benefits they’ve been sold on.

What does an IoT infrastructure consist of? Is it realistic that RSPA members can participate in IoT infrastructure deployment?

TC:  RSPA members can absolutely get involved in this. We are going to limit the scope of IoT infrastructure to RFID in order to provide a clear and short response.  There are a number of RFID vendors that would love to partner with RSPA members. In particular, RSPA members Zebra Technologies and Intel have RFID solutions, as do a number of smaller vendors. RFID infrastructure deployment is not all that different from deploying WiFi in a store. The components required vary by vendor and scope of capabilities desired.  Of course, the RFID infrastructure is of little value unless the products the Retailer is selling have RFID tags.

What are the first steps for VARs/Resellers to have discussions with customers on IoT solutions?

VG: The success of current IoT technologies in business starts with the ability of the VAR to provide a secured wireless infrastructure. Mobile devices, customer devices, communication devices, POS Systems, payment terminals. Someone will provide it so let it be YOU! Evaluate customer needs: Bandwidth needs, security issues, enlisting cybersecurity for data, options of utilizing 4G to send data. There is a lot of opportunity for providing consultant services and managed services. Opportunity = margin.

  • Learn and evaluate your customer’s current needs and the technologies being used before trying to determine the wireless solution needs. Who is the internet provider? What’s the speed? Capacity?

  • Future proof for additional bandwidth needs and factor in the other devices within the space: back office and customer device utilization of the network. They eat up a great deal of bandwidth as well as introduce possible security issues. 

  • What level of security needed? Is this a chain of stores? Is there a cyber security provider to work with? FCC #1 focus for 2016 and 2017 is IoT/Big data security and introducing governance legislation. Be that advisor and address these issues.

  • Will data be filtered onsite (Cisco Cloud), sent via 4G, or raw data sent via internet. Understand and introduce options

What if providing wireless infrastructure and services isn’t part of a VAR’s current offering?  What are the options for selling wireless network services? 

VG: Many VARs currently provide and manage the networks (a revenue stream) as-a-service.  If this isn’t within your current expertise, enlist the assistance of a trusted Reseller who understands enterprise level network products and can evaluate, integrate and support the network on your behalf.  A third option is a hybrid model of VAR providing enterprise hardware and then enlisting a network firewall/security service to monitor and manage the network. In each case, the VAR is the one-point supplier of the IT for its customer.  Again, someone is providing the network: it should be YOU.

VAR ownership of the secure network is crucial to maintaining the integrity of your customer’s experience as well as insuring the other products and services you provide in the Retail space will operate within a secure environment.  Solutions are effective when implemented in an environment with ample the wireless bandwidth.

Are there any technical issues with the wireless network to consider with CX solutions/implementations?  Can they interfere with the wireless infrastructure in a Retail location?

VG: There are so many CX solutions available and most are either Bluetooth, LE Bluetooth, existing wireless or a solution utilizing a hybrid of more than one technology to collect information. I personally installed a customer analytics solution consisting of proprietary APs which made a “mesh network” within the store. Very slick. Using a map of the layout of the store, complete with designated zones, these APs were strategically placed, plugged into a standard outlet and began sending information of dwell times, traffic, zone information, etc.  It was a very robust solution with a very comprehensive cloud based dashboard analytic tool.

Network interference can be a significant issue with these types of installations. In the installation above, the APs initially “pulled” some of wireless access points within the area to join the network, which caused the system to go offline. Some of these wireless access points being effected were inside another office, thus making this a complicated issue to solve. This is why it’s so crucial that VARs have knowledge and control of all areas concerned with the technologies within the customer’s environment. when implemented in an environment with ample the wireless bandwidth.

Does IoT have the ability to impact Customer Experience (CX)?

TC: Absolutely. Retailers still care about the same things they’ve always cared about: more customers, increased basket size, increased customer frequency, more profits.  The intersection of IoT and CX promises to offer a rich experience that enables Retailers to provide consumers with a reason to get off the couch and come in to their store.  I shop here because they know who I am, what I want, and don’t spam me about things I don’t care about. 

Why should a Retailer care about IoT?

TC: The best answer to that question is to provide a current usage case.  Today, some clothing segment retailers have embraced an RFID solution where 100% of items are tagged allowing realtime visibility into item-level inventory location from the time a garment leaves the manufacturer to the time it goes out the front door of the store. Accurate perpetual inventory position has enormous benefits for omnichannel order fulfillment. One simple example is increased sales when the store associate can immediately locate and sell that pair of 32X34 Wrangler jeans that shows in inventory but is buried in the Levi’s pile.

The intersection of IoT and CX promises to offer a rich experience that enables retailers to provide consumers with more reasons to come in to their store.  In the next issue of connect Magazine, we will be discussing in more detail how the IoT can drive improvements in Customer Experience and Customer Satisfaction.