Will M2M / IoT be able to transform the customer retail experience?

The number of cellular M2M connections in the retail industry reached 18.4 million worldwide in 2013, according to a new research report from Berg Insight.

At this point say that Machine-to-Machine, Internet of the Thing, Big Data Analytics or Augmented reality offer great advantages in a highly competitive industry like the Retail sector is obvious and doesn´t add much value.

Many retailers have already increased efficiency in routine operations and developed innovative methods of engaging with the customer with vending machines, digital signage and mobile payment solutions, all of them using M2M technology.

Despite seeming repetitive, my opinion is that the challenge in retail sector is improve the customer experience in each interaction based on new business models and the future web of things will be a catalyst to achieve. Please do not misunderstand, of course in the customer experience I take into account other important aspects like integration of the supply chain and production plans in tune with the customer’s expectations. The retail sector, more than other sectors, is heavily dependent on a well-managed and coordinated production and distribution channel.

No matter how many sensors, devices or screens we install in a store, warehouse or in vehicles, no matter how many sensor data we collect and process; we will not leverage all potential that new uses of M2M /IoT/Big Data technologies can address unless we think in new machine to machine intelligent communication and how can be used it to offer a unique experience to shopaholics, potential buyers or loyal buyers.

Is not any more about to deploy more technology to transform our shop in the coolest smart shop in the mall or in the street; the challenge is to implement new “machine to machine to buyer” oriented processes that really influence and impact on our desire to buy.

Returning to the present reality, the main challenges facing retailers in which M2M /IoT/Big Data  can help:

  • Availability of adequate stock
  • In-store Management
  • Building relationships with customers

Lest see in more detail the three pillars of the technological changes the Retail industry is going through:

Vending Machines

M2M technology is used in Vending Machines to reduce number of visits and downtime, get real time information of products or coins and amount of cash or adjust setting or change prices. More innovative Vending Machines applications I see or read till now are provided by SAP and Axeda.

  •  Axeda has developed an application that tracks an ice cream machine’s coolest flavors, mix-ins, and total ice creams served. The application also featured a Twitter feed of consumers’ favorite flavor suggestions, so that they can meet customer needs in generating increased revenue.
  • Watch the live demo from Mobile World Congress showing SAP Internet of Things in action

Note: Take care with new use case, not all work fine in the long term. Consider the emotional attachment with the brand and customer experience.  Lesson learned by Coca Cola a few years ago: Why Variable Pricing Fails at the Vending Machine and a link to the use case http://www.slideshare.net/pranitprakash/case-study-cokesmart-machine).

Digital Signage

Digital signage is another pillar of the technological changes the Retail industry is going through. Posters are replaced by screens that can show different messages, in the shop or outdoors which change depending on the hour of the day or the kind of clients that visit the store in a given period of time. According to IMS Research, the worldwide digital signage market will total $7 billion in 2013.

I must confess that digital signage attract my attention because I feel the power to create powerful customer dialogue, influence crowd behavior and boost sales for a specific product.

Retail sector is aware of the impact of connected digital signage experiences. M2M, IoT and Big Data technology will play a key role in this market’s rapid growth as businesses are discovering the benefits of delivering real-time information to connected screens.  Innovative Solutions based on these technologies will revolutionize the sector by making it possible to alter messages on one or several screens to target customers with relevant information, eliminating time- and cost-intensive visits, or adapting content quickly to special contexts or audiences, both in-store or on outdoor digital advertising spaces.

Mobile Payment

The M2M Point-of-Sale (POS) is the clearest example of how wireless connections are becoming a day-to-day technology for retailers. As far as retailing goes, M2M POS allows shop assistants to provide a better customer service thanks to a more flexible payment method which overcomes physical restrictions and boundaries.

Berg Insight forecasts that the installed base of cellular POS terminals will grow at a compound annual growth rate of 21.4 percent between 2011 and 2017 to reach 29.4 million units worldwide by 2017.

Cashless payment by means of credit/debit cards or the NFC functionality featured in today’s mobile phones is gaining acceptance. Mobile GSM technology is also being increasingly employed in this area. This trend is being facilitated by the existence of SEPA (Single European Payment Area), a project with the aim of introducing cashless payment practices to 31 countries in Europe.

With M2M mobile payments everyone wins, consumers get enhanced flexibility to purchase using their preferred method – credit or debit card with their associated frequent purchase discounts or perks while, owners receive immediate payment with little potential for fraud, while employees are more secure by not carrying cash. Operating expenses from cash handling and distribution are also eliminated for the merchant.

Simplify the Retail Value Chain

Retailers will stand to benefit from collaboration with Mobile Network Operators (MNOs), Big Data Service Providers, Device vendors, Industry Solutions vendors, Advertising Agencies and Smart Cities Open Data services.

Their combine technical and business strength and experience will derive in value-added benefits for retailers and will facilitate new  customer shopping experience.


Cisco says retailers can exploit sensor data and device opportunity by connecting previously unused (or “dark”) data assets, such as video surveillance cameras, social media, the Internet and customers’ mobile signals. The result? Better prediction of new trends, employee empowerment and improved profitability.

Companies like Shopperception analyses the shopper’s behaviour in front of the shelf, generating metrics and real time events to drive more conversions. They use visual heatmaps based on shopper actions, discover what spaces are under-performing & dragging retailers overall revenue.

And many other start up I am talking with are developing new M2M /IOT innovative solutions for Retail sector.

To avoid that the fragmentation of IoT / Big Data industry affect the evolution of the Retail sector, I encourage Software and Device vendors, M2M Network Operator, System Integrators and Smart Cities to work together to develop innovative and integrated solutions and services that provide a secure and easier way of paying and better customer service. As Dr. Nadia Shouraboura, a tech entrepreneur and the CEO of Hointer,) said. “Improving the customer experience means people will try more items, more quickly, and go home with a higher percentage of them in a shopping bag.”

For additional information or resources please contact: francisco.maroto@oies.es


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  1. Pingback: ENTR 3130: INTERNET OF THINGS | navidhillonentr3130


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