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INTERNET OF THINGS – IoT IN RETAIL

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For Exclusive Use, 2016 S P Jain Institute of Management and Research GROUP 5 March 3, 2016 Author – R Jayaraman, Professor, Operations Management, SPJIMR, Mumbai Co-Authors – SubhaSarkar(PGPM15-078), MBA Participant, SPJIMR, Mumbai SahilSingla(PGPM15-078), MBA Participant, SPJIMR, Mumbai ShreyasSrigandha(PGPM15-078), MBA Participant, SPJIMR, Mumbai PrateekVyas(PGPM15-094), MBA Participant, SPJIMR, Mumbai Abhishek Kumar (PGPM15-078), MBA Participant, SPJIMR, Mumbai INTERNET OF THINGS – IoT IN RETAIL "[T]he Internet will disappear. There will be so many IP addresses, so many devices, sensors, things that you are wearing, things that you are interacting with, that you won't even sense it. It will be part of your presence all the time. Imagine you walk into a room, and the room is dynamic. And with your permission and all of that, you are interacting with the things going on in the room." Eric Schmidt, Google chairman, on a panel at the World Economic Forum The Internet of Things (IoT) is a network of devices and other physical items, primarily embedded software, sensors, and network connectivity. This enables collection and exchange of data. IoT enables seamless sensing and controlling of objects which creates a plethora of opportunity across businesses. This allows the world today with an opportunity to integrate the physical and virtual web ( read computer systems) to enhance the businesses at all touch points. With the sensors and electronic systems marrying the internet world – cyber-physical systems – augments greater efficiency and thereby improved sales or any other horizontals of an organization. At an instance this amalgamation facilitates identifying and interoperation within the Internet infrastructure. The term Internet of Things was coined by Kevin Ashton in 1999 while working at RFID 1 . Ever since, this disruptive technology is fast catching up in all industries (See Exhibit 1 for the expenditure in IoT in $ US billion). Internet of Things basically showed how it can create more value for people and make better business while at the same time contribute to a more sustainable society. The problem of Logistics in Operations is the live case that is yet to be solved and it intrigues a business mind how it can be tweaked to obtain better operational efficiency. Its impact has been proved time and again with the rising use in Retail sector. However, much needs to be done to use IoT effectively, to ensure and achieve seamless operations. IoT, therefore, is the next big thing in the retail industry. It may help the retailers achieve – Inter connections and inter-operability Better customer experience and customer loyalty Effective marketing and advertising Better inventory management Mobile payments
Transcript

For Exclusive Use, 2016

S P Jain Institute of Management and Research

GROUP 5

March 3, 2016Author – R Jayaraman, Professor, Operations Management, SPJIMR, MumbaiCo-Authors – SubhaSarkar(PGPM15-078), MBA Participant, SPJIMR, Mumbai

SahilSingla(PGPM15-078), MBA Participant, SPJIMR, MumbaiShreyasSrigandha(PGPM15-078), MBA Participant, SPJIMR, MumbaiPrateekVyas(PGPM15-094), MBA Participant, SPJIMR, MumbaiAbhishek Kumar (PGPM15-078), MBA Participant, SPJIMR, Mumbai

INTERNET OF THINGS – IoT IN RETAIL

"[T]he Internet will disappear. There will be so many IP addresses, so many devices, sensors, things that you are wearing, things that you are interacting with, that you won't even sense it. It will be part of your presence all the time. Imagine you walk into a room, and the room is dynamic. And with your permission and all of that, you are interacting with the things going on in the room."

— Eric Schmidt, Google chairman, on a panel at the World Economic Forum

The Internet of Things (IoT) is a network of devices and other physical items, primarily embedded software, sensors, and network connectivity. This enables collection and exchange of data. IoT enables seamless sensing and controlling of objects which creates a plethora of opportunity across businesses. This allows the world today with an opportunity to integrate the physical and virtual web (read computer systems) to enhance the businesses at all touch points. With the sensors and electronic systems marrying the internet world – cyber-physical systems – augments greater efficiency and thereby improved sales or any other horizontals of an organization. At an instance this amalgamation facilitates identifying and interoperation within the Internet infrastructure. The term Internet of Things was coined by Kevin Ashton in 1999 while working at RFID1. Ever since, this disruptive technology is fast catching up in all industries (See Exhibit 1 for the expenditure in IoT in $ US billion).

Internet of Things basically showed how it can create more value for people and make better business while at the same time contribute to a more sustainable society.

The problem of Logistics in Operations is the live case that is yet to be solved and it intrigues a business mind how it can be tweaked to obtain better operational efficiency. Its impact has been proved time and again with the rising use in Retail sector. However, much needs to be done to use IoT effectively, to ensure and achieve seamless operations.

IoT, therefore, is the next big thing in the retail industry. It may help the retailers achieve –

Inter connections and inter-operability

Better customer experience and customer loyalty

Effective marketing and advertising

Better inventory management

Mobile payments

For Exclusive Use, 2016

INTERNET OF THINGS – IoT IN RETAILThe significance of IoT also becomes of interest in Operations, with the rising giants like Amazon, Flipkart, Myntra, Trent and others moving towards Omni-Channelism, as a strategy to tap the growing diamond of the middle class. IoT is a potential promise for these to come to profitability.

In 2015, the total expenditure on IoT in the retail industry was $ US 14.28 and this is expected to grow uniformly till 2020 where it is expected to reach $US 35.64 billion. (See Exhibit 2)

Retail environments are broadly physical spaces where consumers meet producers in commerce—purchasing goods or services or even considering the same. This includes: -

Traditional stores Department stores Grocery stores Showrooms Bank branches Theaters Sports arenas.

The case in point observes and analyzes only the environments where IoT can be deployed and for the time being online retailing has been kept outside the purview of the same. Environment in the Retail Business has had a paradigm shift with the infusion of technology over the past 2 decades and has the potential for further disruption – like the shift to e-Commerce but it can also provide a competitive tool to the physical store retailers in this fast changing business world.

Few scenarios that may be implementable in the near future with the help of IoT are listed below: -

Guide the shopper to the product in the store Text her personalized coupons to incentivize the buy Optimize layouts Enable fully automated checkout Optimize inventory

These and other possible innovations can enable new business models and also allow retailers to improve productivity, reduce costs, and raise sales. It is estimated that the use of IoT in retail may have an estimated economic impact of $US 410 billion to $US 1.2 trillion per year by 2025.(See Exhibit 3)

Connected devices aren’t just changing the way consumers live, work and play—they’re dramatically reshapingentire industries. Adding more intelligence and moreconnectivity to the objects that surround us—everythingfrom utility meters to home thermostats—will produceenormous amounts of data that companies can leverageto improve their operations, serve customers better,and create entirely new ways of doing business.The Internet of Things (IoT) is driving innovation and newopportunities by bringing every object, consumer andactivity into the digital realm. At the same time, leadingbusinesses are making similar changes within theirenterprises by digitizing every employee, process, productand service. The proliferation of connected devices coupledwith improved, less-expensive technology platforms and adoption of common standards will only increase the rapid growth of IoT-enabled capabilities across industries. The IoT will be particularly disruptive to the retailindustry. Already, we’re seeing retailers experimentingwith ways to use intelligent, connected devices tooffer new services, reshape experiences and enternew markets by creating digital ecosystems.The IoT movement offers retailers opportunities in three critical areas:customer experience, the supply chain, andnew channels and revenue streams. While the IoT may seem like science fiction, it is becoming reality faster than most of us can comprehend. Retailers that hesitate to develop and execute an IoT strategy will open the door for competitors—old and new alike—to swoop in and capture early IoT mind share and market share.

Improving the customer experience: - Many companies can already mimic customer intimacy—asseen in online ads that quickly reflect your latest purchases—but the IoT promises something much more authentic andmeaningful to the individual. What’s happening now is thatevery experience is becoming a digital experience

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INTERNET OF THINGS – IoT IN RETAILas ordinary“things” become intelligent devices. These experiences arecoalescing into what some are calling the “Internet of Me,”which describes an interconnected environment in whichbusinesses are building products and services to be designedfor, created for, and specifically centered on the individual.Consumer adoption of IoT devices is expected to rise quickly: The“State of the Internet of Things” study from Accenture Interactivefound

that nearly two-thirds of consumers intend to purchase aconnected home device by 2019, while ownership of wearabletechnology is expected to double year over year in 2016.The Internet of Things presents an opportunity for retailers todevelop a vastly improved ecosystem that connects physical anddigital worlds, allowing bidirectional, real-time interaction withconsumers both inside and outside the store. The increasinglyubiquitous smartphone will be the hub for these interactions.Retailers are slowly evolving from fearing smartphone-totingshoppers who “showroom” (browse products in-store and thenpurchase online, often from competitors) to exploring newways to connect with them to enhance the in-store experience.One way is through location-based beacon technology, whichretailers can use to interact directly with customers as they enterthe store. Department store brands such as Lord & Taylor andHudson’s Bay are already using Apple’s iBeacon technology anda mobile marketing platform called Swirl to deliver personalizedpromotions to customers who download the brand’s app. Retailers can leverage the copious amounts of data producedby these interactions to improve the customer’s in-storeexperience. Using sensors to track customers’ paths througha store, for example, can help managers improve storelayout and merchandise placement strategies. Hugo Bosshas already deployed heat sensors in its clothing storesto track customer movements, which helps managersplace premium products in high-traffic areas.

Optimizing supply chain operations: - The “Industrial Internet” has emerged as a term to describehow companies are leveraging cloud, mobile, big data andother technologies to improve operational efficiencies and fosterinnovation by tightly integrating the digital and physical worlds.The combination of the Industrial Internet and IoT devices couldadd more than $14 trillion to the global economy by 2030.Connected devices and products provide retailers withthe opportunity to help optimize operations in the faceof a more complex supply chain, increasingly importantdigital channels, and a more demanding customer. RFIDtechnologies, for example, can improve the precision ofinventory tracking. Data visualization technologies makeit easier for employees to track products across the supplychain. This service could even be extended to customers—allowing them to track, for example, where a customorder is in the production and distribution process.Managers could begin to adjust pricing in real-time, usingInternet-enabled smart tags to lower prices on promotionalor low-turnover items or increase pricing on higher-demanditems. A fully integrated pricing system would help retailers improve synchronization of prices between the shelves andthe registers and also across channels, to verify prices areconsistent between online and brick and mortar stores.Other IoT devices can be integrated within the supply chainto further improve store operations and help reduce cost. Forexample, IoT-enabled sensors confirm store managers to monitorlighting and temperature control and adjust settings to improve customer comfort and support more cost-effective energy usage.Using sensors to automate many of the functions thatemployees currently have to perform manually, such astracking inventory or changing prices on individual items,gives sales associates more time to spend interacting withcustomers—further improving the in-store experience.

Creating new channels and revenue streams: - The true power of the Internet of Things lies in the opportunities it presents to retailers to create new revenue streams or, in some cases, build entirely new channels. We’re already seeing examples of incremental revenues retailers can help achieve by expanding into new channels or creating new, high-margin product categories for the emerging “connected home.” Household appliances, home security and comfort products, even health and wellness products are all becoming part of the Internet of Things ecosystem. Retailers in home improvement or consumer electronics sectors not only can drive more sales of these connected devices—Home Depot already stocks more than 600 “smart” products in its stores—they can also tap into the data they provide to extend their touch into customers’ homes. Some retailers are taking further advantage of the wide array of connected products by becoming an integration “platform.” The concept behind these platforms is to make it easier for customers to make all of their in-home devices talk to one another. Lowe’s, for example, has launched the Iris platform, a “smart home hub” that can communicate with any device using networking technologies like Wi-Fi, ZigBee, or Z-Wave. The hub was designed with an open interface so that

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INTERNET OF THINGS – IoT IN RETAILmanufacturers could integrate their products with the platform. Iris puts Lowe’s in direct competition with telecommunicationsproviders such as AT&T and Verizon, while opening upnew opportunities for teaming with manufacturers tointegrate their products with Iris.Other platform examplesinclude Home Depot’s Wink and

Staples’ Connect. Retailers in other retail sectors, such as grocery, could potentially build or partner with these platforms as well. Connected platforms would give retailers another direct channel to customers, generating a potential gold mine of customer data—information associated with almost every aspect of the household, from utility usage to consumption trends. This information could help retailers to drive more targeted offers or, by integrating connected platforms with existing e-commerce channels, offer new services such as automated replacement of products based on the customer’s consumption or by monitoring perishable dates.

INVENTORY OPTIMIZATIONGetting the right inventory levels is a key determinant of retailer profitability. With too much inventory on hand, stores have high carrying costs and risk being stuck with unsold items. Too little inventory results in stock-outs. In-store inventory levels can be fine-tuned using automated shelf replenishment and real-time inventory monitoring. As in the factory setting, sensors can track the weight or height of items in inventory, triggering automatic reordering based on specific conditions. We estimate that by replenishing inventory when needed, rather than using rule-based methods (once a week, for example), IoT technology could help reduce inventory carrying costs by up to 10 percent, which could have an impact of $5 billion to $15 billion per year in 2025.

Leading retailers are already investing billions in the IoT – and realizing returns that range from uber-efficient inventory management to real-time promotions that grow sales. Organization can collect real time data using IoT and can improve inventory management, IoT will eliminate manual intervention. IoT can be used as a replacement of many old technologies, such as Bar codes. The advantages of IoT over Bar code system are: -

In bar code system some operator has to take the bar code reading, which is cumbersome process. On the other hand in the RFID system in IoT the data can be gathered automatically when inventory will move from place to place. The automatic real time data gathering will improve the system performance and increase the efficiency of the organization. In this system the data will be gathered continuously, not in the specified time interval as done in manual system and also throughout the supply chain, not in a particular point such as receiving point or store entry point. So the data will be more reliable and up-to-date.

Elimination of manual system will result in less operating cost, in fact after the implementation of the system it will cost nothing to read the data. Less human interaction means less chance of human error.

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INTERNET OF THINGS – IoT IN RETAIL To read the bar code the reader should be in visual range, but for RFID it is not requiringbeing in visual range.

Inventories can be under packing also; only thing is that inventory should be in the range of the reader.

These characteristics in long run will create lots of competitive advantage, viz.-

It will be fast while reading the inventory, no need to read one by one. Lots of items can be checked in one time if it’s within the range of the reader.

The inventory can be read from any place, such as rack, big box, pile etc. without opening the box or sorting the items.

Bar code is vulnerable to dirt, weather elements etc. on the other hand RFID is not prone to this problem is integrated properly.

IoT will benefit the shipping of inventories. At present the shipper can see the materials which are at the dock, store or any other shipping point, and ready for shipment. Shipping needs lots of calculation, how many items should be shipped, in which mode etc. Now with the help of IoT the shipper’s visibility increased. He can see the item which is in transit and will need to undock and resent to new destination. So he/she can take informed decision with the help of IoT, and effectively plan and combine more goods.

The receiving of inventories in the store can be made easy with the help of IoT. Receiving involves lots of efforts and time. The store employee usually thoroughly checks each item and their quantity and then receives. With IoT by one touch he or she can receive the items and with the help of RFID the total number of items can be easily transferred to the receiver’s computer without the chance of human error.

AUTOMATED CHECKOUTThe Internet of Things has the potential to completely automate checkout by scanning the contents of shopping carts and automatically charging the sale to the customer’s mobile payments account, allowing a consumer to walk out of a store without pausing.

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INTERNET OF THINGS – IoT IN RETAILThe internet of things has a potential to deal with one of the most labor intensive and annoying problem which customers face in traditional retail stores. This is the major reason because of which customers switch to online mode of shopping, where in certain areas customers do not prefer to shop online. The automated checkout facility using internet of things would lead to hassle free in-shop shopping experience.

The process requires high initial investment but it would lead to cost savings in long run. The process can start with digitizing the retail stores with the help of sensors and radio frequency identifier (RFID) scanners, where the customers need to put all the desired products in the cart and pass through RFID scanner installed at the checkout kiosk and all the products will be scanned and the bill amount will be debited from customer’s mobile payment wallet.

The purpose of IoT applications is to connect physical and digital world, RFID is one of the methods for automatic identification and data capture, which uses electromagnetic fields to identify and track the tags attached to the item. Information about the product is stored in the tag in electronic form.

As per MarketResearchReports.Biz, “Total RFID Market was worth $10.1 billion in 2015, up from $9.5 billion in 2014 and $8.8 billion in 2013. This includes tags, readers and software/services for RFID cards, labels, fobs and all other form factors, for both passive and active RFID. RFID forecast that to rise to $13.2 billion in 2020.”

The advantages of implementing Internet of things in automated checkout process are as follows:

Speedy checkout: The checkout process is really fast and smooth, customer just need to pass through the designated scanner for combined checkout and payment process. This saves customer’s as well as retailer’s time and effort.

Control in customer’s hand: With automated checkout facility, the control over overall shopping duration and purchase is with customer. It provides advantage to the customers who want to spend minimum time inside shopping centre and want to buy a particular product.

Customer loyalty: Retailers with automated checkout facility; especially the early adopters observe a greater customer loyalty, as a large group of customers enjoy the facility of automated checkout.

Privacy: While using automated checkout facility, customers would observe a greater privacy and less disruption in terms of what items they are buying and unnecessary suggestions by staff, however customers can approach the staff whenever they require assistance.

Efficient manpower allocation: Automated checkout enables retailers to efficiently allocate the manpower. The requirement of cashier staff drastically decreases and the staff can be utilized in other tasks such as inventory management.

Automated checkouts using RFID scanners will minimize the risk of shoplifting, which increased during semi attended checkout process in which a customer was required to scan an item manually. With RFID scanners, once an item passes through the scanner, it is sold and bill is generated.

The key challenges faced in implementing automated checkout process are as follows:

Digital transformation: Digital transformation in retail industry is about creating a connected environment and redesigning processes as per IoT framework and for automated checkout. Redesigning the whole environment is a real challenge for traditional style retailers.

Large investment: Technology adoption for ioT involves high investment, although the investment can later be recovered with increased customer base, improved efficiency and manpower cost, still retailers are reluctant to adopt IoT in their business.

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INTERNET OF THINGS – IoT IN RETAIL Change management: The retail industry is undergoing rapid change with adoption of IoT technology, with

automated checkout facility the number of electronic devices will further increase, the challenge for retailers would be to provide adequate training to operate new electronic devices.

Improper recognition of item: One of the challenges is to register all the items available in inventory correctly, as there are numerous items; there is a chance of interchanging of barcodes within the items, leading to price change. In traditional shop, this kind of mistakes can be monitored but during automated checkout the retailer would not realize the mistake.

LAYOUT OPTIMIZATIONBy studying the location and movement of shoppers over time, IoT data can be used to optimize a store’s physical layout. We estimate that layout optimization can lift productivity by 5 percent, leading to a total potential value of $79 billion to $158 billion in 2025(Exhibit-4)

ENERGY MANAGEMENTUsing sensors and predictive algorithms, smart thermostats can detect when no one is home and adjust the temperature to conserve energy.

Over time the smart thermostat could learn about usage patterns and adjust heating or cooling to have the home at the right temperature. Connected washers and dryers (working with smart meters installed by utility companies) could get information about energy prices to delay cycles during peak energy consumption periods.

IoT-enabled energy management applications could have an economic impact of $50 billion to $110 billion globally in 2025 through savings on heating, air conditioning, and overall electricity use.

IoT devices could help reduce electricity bills by ensuring that devices are powered on only when necessary and by reducing usage when energy is most expensive.

Energy harvesting is one the most sort after technology today as population and space required to generate the energy requirement for the population is ever increasing. With increased penetration of cheaper and affordable Internet technologies and wireless sensor network now world is more concerned about energy harvesting and proper utilization due to advancement and scope of tremendous growth in this field.

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With loads of data flowing in through the connected devices, the retailers will get to know the target segments of the customers, their preferences and trump of one product over the other or one category over the other. This would help the retailers to arrange the brick and mortar store accordingly to maximize their lead to conversion ratio.

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INTERNET OF THINGS – IoT IN RETAILInternet of Things (IoT) has taken the energy harvesting field by storm. IoT has not only liberated devices which are automated for Energy conservation from external power but also made them wireless which enabled the reach of intelligent network reach possibly anywhere and everywhere. IoT can reach any electrical or electronic device and can operate it from remote controlled or pre-defined instructions.

Along with improvement in technologies the customer attitude of using technology in day to day life has also undergone a tremendous change. As IoT can deliver a complete package of controlling energy consumption to each end user, the application of this technology to automate a home, a garage or a manufacturing plant is possible and the end user can control all the operations of the automated devices from anywhere in world just with an internet connection.

For Example consider the below IoT enabled home network which uses IoT and intelligence not only for Energy conservation and harvesting but also to be an economic saviour for home by reducing Energy bills for the owners.

Here the house is completed automated using IoT all the major electrical and electronic appliances are connected wireless through router, relays for complete automation system. The Intelligent network aided by sensors, thermostats and pre-installed operating system provides end users to automate and control the entire electric operation of their house on their fingertips.

When the system is connected to Internet, the system uses lights where necessary & shutdowns all electrical items in places where no human presence is detected or where the operations of electrical items are necessary. The system can even be programmed to run heavy duty electrical appliances such as washing machines, refrigerators, Electric water heaters and Air-Conditioners when the prices of electric units are minimum (under dynamic pricing model of electric supply companies) by using smart meters connected via IoT.

IoT not only provides end users economic and technological benefit but also helps world to counter climate changes. In today’s world the biggest emitter of CO2 are energy generators and transport which contribute 38% and 32% of total CO2 emission. With the help of IoT a better load management for energy distribution can be developed. Similarly IoT can also help in better management of traffic.

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INTERNET OF THINGS – IoT IN RETAILAutonomous intersection management can be implemented so that vehicles at the intersection can speed less amount of time waiting for signals to turn green. Depending upon the traffic density an optimal solution can be developed which can change dynamically depending upon the real time data of traffic flow. This results in less CO2 emissions from vehicles and less climate change. Along with the better intersection management since vehicles and their sensors can be connected to internet, a driver or self-driving car can decide the best route of travel depending upon the traffic density especially in downtowns and with real time data from number of vehicles already in the computed or desired route.

IoT has its application in grid management for efficient delivery of energy to consumers depending upon the real time demand analysis by the system. IoT can also reduce dependency on non-renewable energy by using “Smart Grids” which are interconnected and transfer energy generated from one station with minimal transmission loss. It is been estimated that IoT will connect 50 billion devices and it will save up to $110 billion overall to the world by 2030.

REAL TIME IN-STORE PROMOTIONWith beacons that connect to mobile phones to track customers within the store, retailers can launch custom promotions in real time. Once the customer is identified by his or her phone, algorithms can combine historical information about the customer’s preferences and lifestyle with current in-store location data to create unique offers. Over time, these systems can develop customer profiles that include not only data about what they have purchased, but also what they are willing to pay. -------------------------------------------------------------

IoT: THE FUTURE OF RETAILIoT adoption in the retail setting will depend not only on the evolution of technology (lowercost sensors, for example) but also the development of new business processes. IoT systems require modern store formats and investments in data systems and electronic payment systems. This is not an issue in advanced economies, but it could hold back IoT adoption in developing economies. Tiny independent “mom and pop” shops account for the majority of retail trade in places such as Mexico and India and provide employment for millions of low-skill workers. Some countries have adopted policies to protect these players from more efficient modern stores. Widespread IoT adoption would affect players across the value chain, including employees and consumers. It has the potential to reduce the need for labor on the selling floor and at checkout, while raising the amount of revenue per customer (increasing the “shopping basket”) through customization and cross-channel (online/offline) selling. Consumers would gain more value through convenience, time saving, and more attractive customized promotions. To remain competitive, companies would need to master new ways of operating and learn to collaborate closely with technology and data vendors. Historically, many retail companies have been slow to adopt technology due to industry fragmentation, lack of scale, and limited margins in the industry. In recent years, however, adoption of payments, security, and inventory control systems has accelerated, even among smaller companies (in advanced economies). By adopting Internet of Things technologies, retailers can improve their economics by reducing shrinkage (losses due to theft by customers and employees), lowering inventory costs, raising productivity, and improving the customer experience (see Box 7, “The store of the [near] future”). Exhibit 14 illustrates some of the applications of IoT technology that can improve the performance of retail operations, including inventory optimization, automated checkout, customer tracking, and mobile payments.

Retailing giant Walmart heavily uses big data for consumer insights and store-level merchandising. The company mines social media trends to showcase types of products that are rising in popularity, and local weather data is

compared against historical sales data to boost grocery sales. For example, Walmart’s data shows sales for salad ingredients rise when the forecast suggests temperatures above 80 and light winds

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INTERNET OF THINGS – IoT IN RETAIL Nordstrom tracks pins on Pinterest to see what products are trending, and uses that on signs in-store to show

shoppers what interests their peers.

Disney has RFID-enabled MagicBand wristbands that provide theme park access, entry access for guest hotel rooms, and cash and card-free payment food and merchandise. All that activity is also tracked data that helps build a better picture of how guests use Disney services.

Online retailing giant Amazon is once again disrupting bricks and mortar retailing with the Dash Button, a WiFi enabled device that is mapped to specific consumer packaged goods products like laundry detergent. Stuck to a washing machine, all a consumer needs to do when the current supply is running low is tap the button and that generates an order, transaction and delivery of a fresh supply of detergent.

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INTERNET OF THINGS – IoT IN RETAIL

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INTERNET OF THINGS – IoT IN RETAILExhibit 1 Investment in IoT across Industries ($US billion)

350 150

3700

1200

930

1600

850

1700

740

Home Offices Factories Retail WorksitesHuman Outside Cities Vehicles

Exhibit 2 IoT expenditure over the years (E) ($US billion)

2015 2016 2017 2018 2019 20200

5

10

15

20

25

30

35

40

14.2817.15

20.5924.72

29.68

35.64

iOT in retail ($ billion)

iOT in retail ($ billion)

Exhibit 3

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INTERNET OF THINGS – IoT IN RETAIL

Employee Productivity

Improved Staff Allocation

Inventory Optimization

Energy Management

Condition Based Maintenance

Smart CRM

Inventory Shrinkage

Layout Optimization

Real Time In-Store Promotions

Automated Checkout

0 50 100 150 200 250 300 350 400

10

19

21

36

45

52

92

158

348

380

Exhibit 4 Layout Optimization Potential Value – IoT Impact (E) ($US billion)

2015

2025

0 20 40 60 80 100 120 140 160 180

79

158

US $ (Billion)

Exhibit 5: - The future of retail with IoT13This document is for the partial fullfilment of the Operations Management Course of PGPM, SPJIMR

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INTERNET OF THINGS – IoT IN RETAIL

REFERENCES: -

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INTERNET OF THINGS – IoT IN RETAILhttp://www.citylab.com/commute/2014/10/a-new-approach-to-traffic-control-put-ears-to-the-ground/382177/http://www.ae-innovation.org/CMS/index.php?m=content&c=index&a=show&catid=25&id=81The Centre of Excellence for Internet of Things (iOT) - http:// www.nasscom.in/initiatives/coe-iot Intel_IoT_Insights_2014_Web – http://intel_iot_insights_2014The CEO Perspective: Internet of Things for Retail - https:// www.sap.com/bin/sapcom/en_us/downloadasset.2014 09-sep-11-18.the-ceo-perspective-internet-of-things-for-retail- - top-priorities-to-build-a-successful-strategy-pdf.html http:// www.marketsandmarkets.com/Market-Reports/retail-iot-market-43188550.html http://www.marketresearchreports.biz/publisher/58

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