The IoT bottom line
How can retailers optimise stores with IoT technologies to impact the bottom line? David Morgan, VP Customer Value Propositions at SES-imagotag, explains
Retailers are under pressure to cut costs due to food inflation and the broader cost of living crisis, but they’re also still seeing a demand from consumers for quality produce and a growing desire to meet sustainability and nutritional objectives. This has left them struggling to manage conflicting needs – how can they continue to provide the right products and shopping experience while also trying to protect their margins?
The answer lies in turning physical stores into high value digital assets; utilising advanced technologies to create synergies between processes and insights.
Set to reach $177.90 billion by 2031, the global retail IoT industry is growing rapidly. Innovative technologies such as sensors, digital signage, and electronic shelf labels, are unveiling new opportunities for retailers to better manage, optimise, and customise their stores.
Visibility of shelves
Retail digital transformation starts at the shelf – automating price and promotions and with real-time visibility into shelf stock status via Computer Vision (CV) and Machine Learning (ML) technologies. With constant monitoring and instant detection, retailers can access valuable insights around position, price, stock levels and promotional execution (“proof of play”).
Live alerts can trigger automatic replenishment tasks for out-of-stock items, meaning retailers can prioritise key, high value, high margin and promoted products, maximising their availability, driving further sales, and ultimately improving customer net promoter scores (NPS).
Increasing the efficiency of replenishment and order picking can also help retailers meet their sustainability goals. With clear insight into which products are popular, how frequently they are purchased, and when sales are slowing down, retailers can reduce over-ordering on certain items, and together with optimising in-store production meet demand, avoiding excessive mark downs and waste.
Triggering purchases when they matter
In addition to using IoT devices – and the data they generate – to ensure products are available on the shelf and displayed as per planogram, retailers can also use them to engage the shopper at the point of decision. Electronic Shelf Label (ESL) technologies, for example, have key features to digitise physical commerce.
Not only do ESLs effectively eliminate pricing errors and time spent on manual paper ticket updates, they better impact shoppers’ decisions at the shelf via the availability of timely, relevant, and impactful information. They can understand the provenance of products, their efficacy and sustainability, and the value of any promotions and offers.
Retailers can also deploy ‘spotlight’ messaging to better inform customers, engage them in local community initiatives, highlight key attributes, and even drive direct contribution to charities.
Digital media at the shelf and in aisle showing video content synchronised between devices and with price and promotional information, key messages and attributes further enhances the impact to drive sales and is providing additional tools for the retailer to improve the shopping experience.
Optimising with AI-driven analytics
With deploying a greater number of IoT technologies comes a wealth of data. When accessed, managed, and analysed correctly, this data can be turned into valuable, actionable insights. Retailers can then utilise these insights to optimise pricing, stock levels and other key metrics and compile data from the aisles to generate recommendations on the most critical areas for tangible improvement to the bottom line.
Such approaches provide greater opportunity for collaboration with brands and, with the benefit of computer vision technology, to get that “proof of play” of promotional execution while getting access to data to improve performance and experience for all stakeholders.
Kavanagh’s of Belsize Park recently became the UK’s first fully ‘IoT powered’ “360” grocery store – combining ESLs, computer vision, sensors, video rails, analytics and cloud technologies to achieve huge time savings, greater efficiencies, higher turnover, and an improved shopper experience.
Since deploying the technology, the in-store team now better utilise at least ten hours a week that would normally be spent changing and managing paper tickets. Automated shelf monitoring and alerting has also saved the staff up to two hours per day, and the tech delivers at least 2% higher sales due to better availability, clear customer information and timely executed campaigns.
By utilising IoT technologies, retailers can revitalise their stores – turning them into powerful digital assets that are efficient, data-driven, and connected. Vital information is readily available, meaning more informed and considered decisions can be made based on actual insights and appropriately monetised.
In making stores more efficient, omnichannel, and sustainable, retailers can enhance their overall business model and profitability while also future proofing themselves for whatever lies next.