The Technology Driving The Growth Of IoT Retail Applications
By Rick Gretsch, Accelerated Concepts, a Digi International company
In our recent study “The Cost of Downtime: Beyond the
Bottom Line,” 72% of midsized retailers lose sales
during network downtime. The study also finds downtime severely impacts
customer loyalty, employee productivity and overall business operations.
Retailers are ramping up the use of new IoT technology and a growing number of connected devices to keep up with consumer demands, better interact with customers, conduct transactions securely and improve the efficiency of their operations.
Beyond what the customer sees and experiences, such as in-store interactions with the brand using WiFi, there is a critical connection to back office operations, often referred to as a backbone, that connects devices to each other and to backend operations to fully leverage the advantages of the IoT. One of the common examples of this backbone is the connection from sales and POS systems to inventory control systems.
Retail markets require robust IoT applications where pervasive connectivity is a must, and where a fully developed backend ecosystem allows organizations to effectively and efficiently conduct business. Key to the technology backbone and backend ecosystem are routers and other networking equipment, not the most glamorous part of retail but indispensable nonetheless.
It’s critical that routers designed specifically for the IoT ensure business continuity in the event of a connectivity outage and provide a connection to in-store third-party vendors operating ATMs, kiosks and other conveniences.
What Customers See
ATMs have been in place for decades, with increasing functionality from year to year. Kiosks are becoming more popular, driving revenue and leveraging partnerships with third-party vendors inside the store. Digital signage is making strides as more retailers embrace their capabilities to deliver advertising and other customer communications more easily and cost-effectively.
In the past, retailers would let third-party vendors use their networks, because vendors had difficulty getting connectivity in a facility they didn’t own. The days of allowing third parties to leverage in-house proprietary networks are over, and an alternative is now needed. The good news is that it can be provided via purpose-built routers and other IoT-specific equipment.
Housing this equipment in a secure location such as a back room or closet can disrupt signals and connections, so it often can be disguised as a wireless access point, with neutral colors and separate power supply.
What Customers Don’t See
One of the most important benefits of today’s retail networks is continuity and failover. A large retailer will likely have built-in redundancy and conditioned lines. But mid-size to smaller organizations generally use broadband connections, which provide significant bandwidth at low cost, but are difficult to restart after a failure.
An in-store router provides a wireline connection that can switch over to a wireless LTE connection in the event of an outage. It is a cost-effective way of insuring that the back-office connection remains intact. Typically, a metered service from a carrier isn’t ideal for long-term, since it’s more expensive, but it nevertheless provides an excellent backup. Some retailers will employ wireless LTE when first opening a store, since it can be installed quickly, then switch over to wireline for their primary connectivity.
What to Look For
Here are things to consider when implementing retail IoT technology to ensure a reliable network and avoid overbuying.
- Constant Uptime – Any loss of connectivity can cause loss of revenue and even loss of customers. Systems and services need to be constantly available, so choose a router that provides maximum speed with flexible options, such as the ability to switch to wireless LTE.
- Security – Since most retail transactions are purchases, high levels of data security and encryption, including PCI compliance, are critical. Most solutions will come with a device security framework that addresses common security vulnerabilities. This assists with customer data protection and privacy regulations.
- Remote Management – ATMs, kiosks and similar technologies are often spread across a broad geography, so look for a solution that provides a local user interface so third-party vendors can monitor and adjust routers without costly site visits.
- Room for Growth – Choose a system that allows for easy deployment and management for wherever your business grows. Many have the capability to provide connectivity throughout the U.S. and Canada, and even around the world.
As with most technology, behind-the-scenes equipment connecting a variety of hardware and software is crucial. These backend applications and services provide the linkage between customer-facing technology and the processes that must occur in order to deliver the technology’s full capability for the business.
The IoT can considerably enhance the retail industry, with millions of increasingly sophisticated transactions relying on technology every day. As the Internet handles more traffic and retailers further leverage the IoT, the technology backbone will ensure efficient operations and positive customer experiences.
Rick Gretsch is currently vice president, product management cellular networking at Accelerated Concepts, now part of Digi International. Prior to joining Accelerated Concepts, Gretsch held product management leadership positions at AT&T’s business and consumer divisions and at IBM’s Global Network. He earned a BS from the University of Arizona and an MBA from the Mendoza College of Business at the University of Notre Dame.