the internet of everything new frontiers in retail · internet of everything: new frontiers in...

The Internet of Everything New Frontiers in Retail

Lisa Fretwell Dr. Shaun Kirby Head of Retail Chief Technology Officer Cisco Consulting Cisco Consulting January, 2015

2 © 2014 Cisco and/or its affiliates. All rights reserved. Cisco Confidential

Internet of Everything: New Frontiers in Retail Connecting dark assets in stores, warehouses and venues has led to early success in gaining valuable new insights and improving the retail value chain from operational efficiency to shopper experience. Recent advances in precision indoor location, video analytics, and sensor fusion are enabling retailers to gain new insights with unprecedented granularity. Join Cisco for a look at the next frontier of technologies that are changing the face of retail today and transforming the future.

NRF IoE Story Line: Brief


Introducing Cisco


Lisa Fretwell Dr. Shaun Kirby

Managing Director, Retail & IoE Cisco Consulting

[email protected]

Chief Technology Officer Cisco Consulting

[email protected]


Connecting Anytime,

Anywhere

STAFF SUPPLIERS & VENDORS

OMNI-CHANNEL

Traffic * Conversion * Basket * Affinity

DECISION JOURNEY

Knowing Sooner Acting Faster

RETAIL Cost Reduction OPERATIONS

Productivity

Mobility Connected Analytics

The Internet of Everything


IoE in Retail The Challenge The Opportunity The New Frontier


1.  Store “Like for Like”: Flat or Declining

2.  20% of Consumers now make 50% or more of their Purchases On Line

3.  Category Online Shift

The Retail Challenge: The Store

42% 41%

29%

18%

14%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Consumer Electronics

Apparel Health and Beauty

Home Imporvement

Grocery

“My online purchases have increased somewhat and significantly for…” Source: Cisco Global Shopper Survey 2014, US data


1.  70% of consumers visit stores at least weekly

2.  68% of consumers prefer to get post purchase help from a store

3.  65% of shoppers prefer to pick up online purchases in store

4.  61% of shoppers prefer shopping in stores rather than on line

5.  Shoppers use technology in store to shop 47% use mobiles è personal devices / wearables 40% use digital kiosks è smart, infused environment

The Retail Opportunity: The Store

Source: Cisco Global Shopper Survey 2014, US data

Shoppers want Value, Efficiency & Engagement in Store - Hyper Relevance.


Hyper Relevance Through Dynamic Experiences The New Frontier…Digitizing the Store

“48% of retail processes could be

automated”

“70% of retail respondents

prioritized digital customer

experiences”

PLATFORM

•  Insights •  Touchpoints •  Marketing

Ways of Working •  Process digitization •  Employee

collaboration •  Performance

management

Business Models •  Modified •  Net new •  Globalization

Sources: Cisco IoT value research 2014, Cisco retail solution research 2014, MIT

Customer Experience

The Internet Of Everything


What’s the Size of the Prize? Model: $20B Retailer, 900 stores, EBIT 7%

Value from • Shopper insights

for conversion • Digital offers

and loyalty • Digital service • Cross channel

selling

Customer Experience

Ways of Working

15% + EBIT

Improvement

$170M $142M

Value from • Staffing optimization • Store routine

digitization • Colleague

collaboration $312M

BENEFIT

The Internet Of Everything


Real Stories Working at the Frontier


Real Stories from Working at the Frontier Hyper Relevance Through Dynamic Experiences

BUSINESS BENEFITS

Business Models

Customer Experience

Ways of Working

Story 1: Optimizing staff across store operations

Story 2: Improving conversion through sensor fusion

Story 3: Driving sales through mobile


•  Light up Dark Assets to sense key signals: •  Entrance, checkout, and main

shopping area video analytics •  Wi-Fi location of devices / carts •  High-speed PTZ camera

with mirrors for shelf stock

•  Fuse data sources & analytics at the edge and in the cloud

•  Analyze new information, use machine learning to identify new trends & improve foresight

Story 1: Optimizing Staff Across Store Operations What We Do


Story 1: Results: Checkout Cost and Wait Time Down

An estimated annual savings of $50-$70K

can be achieved at one large store in a year

2-3 FTE Free per large store to redirect to

other tasks

95-percentile wait time cut by ½ on weekdays

Up to 50%+ reduction in average wait time

Current State New State Weekday Weekend Weekday Weekend

Cashier hours/day 150 200 140 180

Cost/day $1800 $2400 $1680 $2160

Avg. queue length 2.5 2.7 1.6 1.9

95% queue length 2 3 1.7 2.5

Avg. wait time 1:13 1:31 0:29 1:09

95% wait time 3:49 4:01 1:55 4:00

Utilization 70% 78% 77% 86%


Soft benefits include: 1)  Increased customer satisfaction from increased product availability 2)  Increased store management satisfaction from process simplification

Story 1: Results: Increased Sales, Reduced Costs

Metrics & Drivers Without Digitized Processes

With Digitized Processes Benefit

Lost Sales

•  Improved OOS forecast $100M $60M $40M

(increased sales)

Stocking Labor

•  Inventory checks reduced • False picks avoided

$80M $35M $45M (reduced cost)

Vendor Audits

• Cost of store audits $30M $0 $30M

(reduced cost)


•  Light up Dark Assets to capture previously hidden shopper behavior: •  Wi-Fi cart tags •  Precision location IR beacons •  Shopper mobile device traffic

•  Fuse with POS and CRM data for product interaction & merchandising insights

•  Conduct Living Laboratory simulations for real time improvement

Story 2: Improving Conversion through Sensor Fusion What We Do


Handbags

Women’s

Boys’

Pha

rmac

y Men’s

Glasses

Tops

Grocery

Girls Shoes

Girls’

Story 2: Improving Conversion through Sensor Fusion Example Results & Outcome

Max

Min

Potential Value of

Conversion Campaigns

Example Findings: § “Conversion

Cliff”

o Showrooming in Grocery

o Social media opportunity in Women’s

o Extensive search throughout


SOCIAL ENGAGEMENT LOCALISED CONTENT

LOCATION BASED CURATED CONTENT (WIFI PORTAL)

DR

IVIN

G C

US

TOM

ER

S TO

E-C

OM

ME

RC

E S

ITE A

ND

P

UR

CH

AS

ING

Story 3: Driving Omnichannel Sales Via Mobile Offers & Insights What We Do •  Wifi portal offering

tailored content combined with instore digital order point

•  Online and store Customer Offers

•  Anonymous deep dive analytics

•  Business Value Assessment


DEEP DIVE DATA ANALYTICS

AVAILABLE ON SHOP FLOOR

RE

AL TIM

E E

NG

AG

EM

EN

T ME

TRIC

S

Story 3: Results

Source: Cisco Consulting, Wittos


Average since 1 August 800 unique Customers per day 20% returning within the week

Story 3: Key Findings •  Weekly onboarding steadily

increased: overall 50% uplift over the 3 month trial.

•  Engagement with ‘Offer’ content increases when positioned early in on-boarding.

•  Customers spent between 30-50% of their physical dwell time in-store “online” on personal devices.

Source: Cisco Consulting, Wittos


£ ££ £££

£

Story 3: Outcome

Encourage App down for ongoing engagement outside of store

ON-BOARD WIFI

WIFI PORTAL

E-COMMERCE / CUSTOMER INFO

SERVICES / LOYALTY

DOWNLOAD APP

VALU

E C

RE

ATIO

N F

UN

NE

L

55% customer pull through TO ECOMM

3 content units Engaged per session

Portal increases Wi-Fi onboarding by 50%

60% customer ‘sign up’ for relevant services & offers

Loyal customers demonstrate a higher spend, hence value per customer. However the number of known loyal customers is often low.

Unknown customers represent new revenue and value creation opportunities.


Introducing New Technology Frontiers


Hot Spots in the IoE Technology Stack Architecting Dynamic Experiences Levels

Application (Reporting, Analytics, Control)

Data Abstraction (Aggregation & Access)

Data Accumulation (Storage)

Edge (Fog) Computing (Data Element Analysis & Transformation)

Connectivity (Comm & Processing Units)

Physical Devices & Controllers (The “Things” in IoE)

Collaboration & Processes (Involving people and bus. processes)

1

2

3

4

5

6

7 Data at

Rest

Data in Motion

4. Orchestration & Visualization - SPOG

1. Precision Indoor Location 2. Video - the Supersensor

3. Wearables


1. Precision Indoor Location On the brink of pervasive, precise indoor location

Strategies that Work •  Drive Mobile App /

Site Engagement •  Target Mobiles and

Wearables as the experience platform

•  Fuse with sensing across channels to achieve breakthroughs

•  Adopt infrastructure that protects from new threats and helps manage increased complexity

Scrambling & Encryption

Today: 7-10m (aisle)

2015: 1-3m (aisle)

Future: <1m (product/shelf)

Previously: 7-10m (zone)

Angle of Arrival Wi-Fi

Beacons

Sensor Fusion

Low Cost Active Tags

Device Proliferation

Rogue Beacons

Location Insight

Competitor

Crowdsourcing


2. Computer Vision and Video Analytics Cameras become the “super-sensor” and everything “sees”

Lensless Cameras Deep Focus

Deconvolution 4K / 8K

Video Understanding

Demographics •  Ethnicity •  Mood •  Body language

Eulerian Video Magnification

Autocalibration

•  Extensible with new software •  Unobtrusive and low maintenance •  Already widespread •  Transparency •  Symbiosis, not espionage

Strategies that Work •  Tap fog computing to

scale to pervasive video without drowning in data

•  Converge surveillance, security, and analytics initiatives with common infrastructure

•  Position cameras to collect multiple metrics

•  Adopt technology that can be extended with new computer vision easily

•  Look for auto-calibrating technologies


3. Wearables Free, continuous channel engagement

•  Wearables not the whole platform •  Fads vs. sticky devices •  Context and content required to

realize value

Strategies that Work •  Build audio and semantics

into apps to engage in busy store environment

•  Revive augmented reality innovation

•  Tap health data as vast new source of shopper insight

•  Crowdsource valuable insights into shelf condition, operations, and other store health indicators

•  Consider new horizons for gamification


4. Single Pane of Glass (SPOG) for IoE

?

Little Geospatial Context

Diverse Analytics Tools Complex Connections Among Previously Dark Assets

Wildly Disparate Datasets and Sources

```

TOTAL IOE Value at Stake: $19.0 Trillion

•  Visualization

•  Orchestration

Strategies that Work •  Virtualize data sources •  Adopt visualization tools

with 3D spatial capability and “infinite” zoom

•  Provide intuitive control over data

•  Embed collaboration with the SPOG

•  Focus on seamless integration of new devices and creation of new visualizations

The end of the dashboard era…Minority Report, here we come!


Breaking Frontiers


How? From PowerPoint to Proof Point….

PLATFORMS


In Summary 1.  There’s money to be had – top and

bottom line from IoE / Digitisation

2.  Agile prototyping / piloting / modeling techniques using real data in live environments

3.  Platform architecture not point solutions

4.  Open, multi-sensor data fusion approach

5.  Data at the edge and in the cloud – accessible and virtualized


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