By Nick Hoskins, Country Manager, Australia and New Zealand
The Internet of Things (IoT) presents major benefits to retail businesses both big and small. IoT adoption is leading to an increase in data volumes, while advancements in technology such as 5G increases network speeds that can handle the rise in data volumes.
According to the New Zealand IoT Alliance, the introduction of IoT across a range of New Zealand sectors could benefit the country’s economy to the tune of $2.2 billion within the next decade.
Successful retailers of today are implementing smart technologies into their operations, to better understand consumer sentiment and behaviour, create new business channels, empower partner ecosystems, and gain a competitive edge.
These retailers are personalising the omnichannel shopping experience and tailoring localised assortments, dynamically changing prices and promotions, and enabling agile fulfillment and streamlined supply chain management.
In the years to come, businesses must work to effectively collect, curate, analyse and act on IoT data from the edge to inside the enterprise.
The rise of IoT in New Zealand’s retail sector
According to Machina Research global market forecasts, by the end of 2024, more than 24.9 billion connections will be established around the world. By 2025, according to the IoT Alliance, 1 billion of these connections will be in New Zealand.
The lockdowns of 2020 accelerated the use of connected devices for a variety of day-to-day activities, including online shopping. A report from New Zealand Post indicates online spending has increased by 25% in New Zealand, and that 71% of all online spending is going to New Zealand retailers. Despite embracing online shopping, physical shopping remains important to New Zealand consumers, as evidenced by the post-lockdown rebound in the country’s overall retail sales volume. This reportedly rose 2.5% in the March 2021 quarter after declining 2.6% in the December 2020 quarter.
When it comes to the in-person retail experience, technology is proving a game changer. Businesses can now combine the power of connected technology with physical presence, placing beacons and sensors in stores to track purchase paths of customers by identifying ‘hot’ and ‘cold’ spots throughout the store. In addition, they can utilise facial recognition technologies to measure customer moods and sentiments.
On the supply chain front, retailers can use IoT devices to track goods, for instance embedding devices within refrigerated trucks carrying perishable foods to measure temperature and humidity.
Immediate insights with edge computing
Taking a closer look at the technology, we are seeing that as IoT advances the speed with which companies can gain insights from data is reduced dramatically. In certain use cases, businesses want to generate actionable insights immediately, and any kind of delay is detrimental.
Edge computing allows businesses to process and store data at the edge of the network, versus in a cloud environment. In this instance, companies can capture data at the source, process it and gain insights right away. This can be coupled with automation and machine learning to bring rapid and valuable knowledge to businesses in real-time.
For instance, in the retail sector, connecting to customer mobile devices through store-specific applications allows businesses to tailor real-time recommendations for customers as they are shopping, even guiding them to specific aisles based on the products they are after and sending specific coupons to their device immediately.
For edge computing it’s crucial to consider price, infrastructure, limitations and performance. For instance, cloud is often a natural extension to edge and IoT data from a compute and storage perspective, but round trips can be very costly due to the bandwidth required to do it well. Customers need to have the right enterprise data platform to support their infrastructure and know where to process and store data to get the most cost effective and fastest result, while also maintaining security.
Maximising value with a data platform
In the past, organisations have relied on data making its way into a data warehouse or data lake before meaningful analysis and analytics can occur. In addition, some companies have adopted separate tools for driving insights for streaming data.
The disadvantage with this is it creates yet another silo and new problems in figuring out how to integrate components. One solution is to utilise a platform that provides ingestion, transformation, query and predictive analytics capabilities that can be accessed by a single pane of glass and supports different cloud environments and edge computing.
The right platform will be able to capture and process data locally or move it to the cloud, depending on what makes the most sense. For instance, you can deploy hundreds or up to thousands of ‘edge agents’ to edge devices to manage them from one single location and streamline operations. The right partner will enable you to collect and process streaming data so you can react immediately to events, analyse data for future research and optimise processes to avoid common challenges.
Businesses seeking to speed up operations and utilise captured and streaming data need a technology partner that specialise in modern enterprise data cloud architecture. Other important considerations include security and governance, open standards without vendor lock-in, and functionality across any cloud – including on-premise, private cloud, the edge and public clouds.
IoT is relevant for every retailer
Today the most successful retail organisations are utilising IoT. In fact, according to PwC’s 2019 Internet of Things Survey, 58% of retailers have active IoT projects, and another 30% have IoT projects in a research or development phase. The vast majority (94%) of retailers believe IoT’s benefits outweigh potential risks and are evaluating how to incorporate it into their business.
The power of IoT is clear, and as retailers begin to invest in digital transformation and look to advance operations, the right partner can help teams to maximise these benefits.