Retail of the future

Combining IoT technologies with edge solutions will transform the world of retail. New ways of interacting with consumers are emerging, not to mention means of streamlining retail processes.

Together, the Internet of Things (IoT) and Artificial Intelligence (AI) form the technological backbone of the future of retail. Only appropriately digitalised and interconnected stores will be able to offer customers an ideal shopping experience. And make their processes as efficient as can be.

“In terms of the development of smart stores, the retail sector is currently undergoing a conceptual and setup phase. And is actively seeking out solutions for appealing to customers with personalised offerings and for reinventing retail processes with AI and IoT,” explains Xenia Giese, Industry Solution Executive Retail & Consumer Goods at Microsoft Germany.

According to a joint study conducted by consulting firm BearingPoint and the IIHD Institut, this is accompanied by a relocation of information processing from the back end to the front end. After all, edge solutions have the advantage of being able to depend on the required computing resources being available. But, not only that. They also enable extremely fast response times with their low latency. Data are processed wherever the consumers themselves are before any decisions or actions are initiated. This is reflected in a considerably higher response speed.

A personalised experience

Personalised offerings and product recommendations are an established means of customer communication in online retail, yet these methods have previously been off-limits to stationary retail, due in no small part to a lack of solutions for identifying individual customers. Yet this is now possible with IoT and edge solutions. To name one example, customers visiting the German branch of BASF Wein are presented with an individualised assortment of products on a digital shelf, all of which are tailored to the tastes and preferences saved to their customer profile. Important consumer data can be recorded, while product ranges can be better coordinated with one another.

Originally founded in 1901 exclusively for the company’s own employees. The wine retailer now delivers around 700,000 bottles annually to over 40,000 customers in more than 50 countries.

The flagship H&M store on Times Square in New York hosts another example of an improved customer experience. What the company claims is the world’s first voice-controlled, interactive mirror. It does not interact through touch input, but rather using vocal and facial recognition. Customers can generate mirror-cover selfies for “My H&M Cover” and also get fashion inspiration. After scanning a QR code, the mirror suggests outfits to the customer that can be purchased immediately. What is more, personalised discounts are awarded during “mirror shopping”. The mirror’s selfie function has been greeted with enthusiasm by customers. Because, 86 per cent of customers scan the QR code to download the cover. While 10 per cent of them subscribe to the H&M newsletter afterwards.

Paying without queuing

Paying is personnel-intensive, with waiting times making the process a frequent gripe among customers. The “Seamless Checkout” provides a solution. In this case, customers identify themselves with a customer card or app before making purchases or even entering the premises. After this, they can simply remove the products they want from the shelves. And pay for them automatically through their customer account when they leave. However, this requires the smart store to know which products are in the basket.

Congatec is a leading provider of industrial computer modules. It has worked with camera manufacturer Basler to come up with an answer to this conundrum. The deep-learning application shows how the retail check-out process can be made far simpler with vision technologies. In this case, all the customer would need to do is put the products in the basket. The trained neural network subsequently detects those products via a video stream – in the same way that facial recognition works. Finally, the total to be paid for the purchases is displayed. A so-called SMARC module underpins the system. This is a specification of the Standardization Group for Embedded Technologies for “computer-on-modules”. SMARC computer-on-modules are specifically designed for the development of extremely compact low-power systems.

Autonomous outlets of retail

California-based AiFi goes one step further with its autonomous or unmanned outlets.

A huge amount of technology is concealed under one microscopic roof in AiFi’s NanoStore. Cameras with embedded systems communicate with a central node and “share” with it the products that customers have added to their baskets. When leaving the shop, all customers need to do is pull out their credit card or enter details into an app. Confirm the items that they want to purchase and leave with a receipt – and their purchases – in their hands.

The basis of this flexible-use shop system is a standard container that can be easily expanded to include additional modules. In the shop, customers are guided through the purchasing process by artificial intelligence, which involves tracking visitors, stock levels and purchasing behaviour with machine-vision technologies. The results give employees an idea of what is working well – and what is not – in real time. Upon entering the “smart” shop, customers can identify themselves using an app or a credit card before putting their shopping in a basket as they normally would. This identification process means that they no longer have to wait in a queue; the system analyses the shopping in the basket using Seamless Checkout when customers leave the store and only charges for what is actually in there.

The digitalisation of retail is leading to a realignment of central retail processes such as product-range and stock management, store design, store operations and also customer communication. Kay Manke, a partner in BearingPoint, has the following to say: “Two of the main hurdles in the implementation of IoT are the scalability of IT infrastructures and the necessity of higher investment. Nonetheless, commercial enterprises should already be doing the groundwork that will enable them to realise the full potential of IoT.”


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