NRF highlights promise of IoT in retail in a post-beacon world

It was only a couple of years ago that Bluetooth beacons looked to be the future of the bricks-and-mortar shopping experience. However, enthusiasm has waned and adoption has been slow, leaving retailers looking for alternative technologies to combat their losses to online sales. The National Retail Federation’s convention was the stage for a number of announcements that illustrate the potential of the IoT here.

But to quickly recap Bluetooth beacons, a technology pushed by Apple and then seized by a raft of startups, the stumbling block always appeared to be the integration of the beacon experience into the two major smartphone platforms – Android and iOS. The beacons themselves, small Bluetooth-equipped boxes that could beam messages to nearby users, seemed quite capable, even in their early iterations. However, it was the problem of connecting nearby shoppers to them in the first place that was the biggest stumbling block – a problem that is still largely unsolved.

Downloading an application for a store or mall would be one way to do this. The app would then enable stores to advertise promotions or discounts to the users of the app, which in turn should drive footfall and hopefully sales. But that experience is a long way off the vision of the future that many entertained, mostly because this sort of application can’t go far enough.

Apple’s control of its iOS ecosystem means that it can carry out touch-free transactions in some its beacon-equipped stores, where shoppers can walk into an Apple Store, browse products, be pushed information on these products, and then pay for these products through their iPhone, before leaving the store – without having to interact with staff or queue at a checkout.

Android hasn’t taken similar integration steps, meaning that the retailers are confined to the rare shopping-center application or building their own, and both of these haven’t exactly taken shoppers by storm. Consequently, their enthusiasm for beacons has given way, even though the technology itself has many uses outside of retail. For these retailers, image-based analytics seem to be the hot-new-thing.

This brings us to NRF, a business convention attended by some 38,000 people, which claims to be the largest retail conference in the world. Held in New York, over three days, the most notable IoT-related announcements came from the usual suspects – ARM, Intel, and Microsoft. Diginomica has a good round-up of the top-level concerns for most of NRF, should you want a wider-angle view.

ARM’s pitch was that its shiny new Pelion IoT platform could be used by retailers to unify their data siloes, to better understand their customers. Combining data from online transactions, customer details, and other such sources, with data generated by in-store components, could lead to better marketing, customer services, and store layout optimization.

And so, ARM has a new retail offering to bundle these capabilities together, combining Pelion and the Customer Data Platform (CDP) that ARM acquired along with Treasure Data, recently. ARM has also partnered with Reflexis, a retail execution software specialist, to generate more ‘actionable’ data, such as displaying in-store adverts based on a shopper’s online browsing history.

ARM points to a study from eMarketer, which found that while online retail grew nearly 25% last year, physical stores still generate 90% of global retail revenue. It cites another report from SJC, which finds that these physical stores are being equipped with sensors, beacons, and cameras, all of which will be generating valuable in-store data that needs to be processed – which is where ARM Retail comes in.

So ARM hopes to snare retailers looking for a way to make sense of all the data they currently have, and any future sources they might want to add to their locations – whether that’s simple motion sensors to measure footfall, or advanced vision-based systems that use cameras to determine how a shopper behaves. It continues ARM’s strategy of moving up the stack from the low-power chip designs it has specialized in, and under new parent SoftBank, we expect this expansion to continue apace.

Intel has also been on the expansion path, and has made a big song and dance about drones – mostly because ARM threatens to diminish its sales in laptops, potentially too in data center CPUs, and because the rise of GPUs and specialist AI-focused silicon has slashed projections for growth in the high-performance computing market. Intel has determined that automotive and drones are strong candidates, but of course, ARM fancies those markets too.

Regardless, Intel has been showing off drone designs in its keynotes for the past couple of years. At NRF, a partnership with Pensa was on display, where a small drone could be used in stores to check shelf-stock and optimize replenishment. Intel reckons that the shelf blind-spot problem is a trillion-dollar issue for retailers, and so it believes there’s great opportunities for the likes of Pensa, backed up by an Intel platform, and augmented by its AI forays.

The Pensa drone forms part of Intel’s decade-old retail division, which will be launching the Open Retail Initiative, later this year. Similar to ARM’s plan, the project wants to help retailers unlock the value in their data, using open source technologies. To this end, Intel is going to be collaborating with the Edge-X Foundry, as well as a pretty long list of its own partners: Canonical, Dell, Envirosell, HP, JD, JDA, Petrosoft, RetailNext, SAS, Shekel Brainweigh, Suse, Toshiba Global Commerce Solutions, Verifone and VMware.

Microsoft is absent from that list, most likely because it has plans for its own retail platform offerings. At NRF, it unveiled a partnership with US grocers Kroger, to test a connected store experience that the two companies will then jointly market. Kroger has built its own systems, pairing in-store sensors with Microsoft’s Azure cloud platform in the back-end.

Shelves equipped with digital labels have been given the rather grandiose name Edge Shelf, for Enhanced Display for Grocery Environment, with the goal of better advertising promotions, prices, and nutritional information. The shelving system also offers staff a lighting cue, termed pick-to-light, which Kroger says will speed up its collection service – where customers place an order online, staff bag up the order, and then hand it over to the customer once they have arrived at the store for collection.

The Edge Shelf also provides a way for Kroger to sell digital advertising, where the ad-placement is influenced by in-store video analytics. Customer demographics can also be used here, for the purpose of placing very precisely picked adverts, for maximum impact.

So while the idea of adverts following you around a grocery store might sound somewhat hellish, there is the distinct possibility that stores like Kroger would be able to provide a much more personalized shopping experience to their customers, which should help keep them loyal and engaged. Boosting per-trip spend or customer satisfaction is of great importance to retailers, and Kroger and Microsoft reckon they have something that many such shops will happily pay for.