How Cellular IoT can be Used by Retail: Use Cases

By James Brehm August 23, 2017

ATM, Kiosk, Unattended Retail and Digital Signage
While there are many different applications that make up the Retail vertical market for IoT, ATM, Kiosk, Unattended Retail and Digital Signage solutions oftentimes get lumped together because their needs are quite similar. Wireless operation on cellular networks enables 24x7 uptime, faster transaction speeds, and complete mobility. Instead of spending days or weeks waiting for telephone companies to activate phone lines with associated activation fees, you can literally install wireless modems within minutes. You simply connect the machine to a power outlet, and the wireless modem and antenna connect directly to the cellular network.

Wireless connectivity effectively untethers the Kiosk, ATM or Digital Signs enabling the ability to move it anywhere. It also makes it easier to re-deploy machines to different locations. Installation becomes true “plug and play.” Additionally, it enables faster transaction speeds and complete mobility for a variety of Kiosk and Vending applications. Wireless solutions provide a more flexible, more robust, lower cost option for kiosk data connections and vending payment processing, a reliable connection to manage inventory and market operations. What’s more, wireless solutions allow for easy to deploy temporary solutions for special events and outdoor ATMs.  Following the high-profile data breaches of retailers like Target, Home Depot, TJ Max, and Nieman Marcus, the practice of “punching a hole in the corporate network firewall” to provide connectivity for 3rd party retail solutions has effectivity ended providing further motivation and impetus for retailers to adopt cellular enabled solutions.

PoS Solutions
The U.S. PoS (Point of Sale) market is big today scaling to huge. It is anticipated to grow at more than 24% over the forecast timeline owing to the government support to encourage the migration from traditional to advanced NFC and EMV-enabled devices. The shift to EMV is aimed at minimizing the security breaches and transaction related frauds in the digital payments. Retailers and other businesses are increasingly adopting EMV cards as it secures them from the deceitful transactions. The integrated chip in the cards is difficult and expensive to forge as the transmitted information is dynamic in nature and varies each time.

And while the use of IoT in the retail sector is being propelled primarily by the EMV liability shift,  the new chip and pin card readers are being installed hand in hand with multimode connectivity gateways and large customer centric payment terminals; the market will witness growth due to the evolution of the vertical into an organized sector.

Aside from just processing transactions, POS terminals are being used for a range of applications across businesses such as employee time clocks, cash drawers, in store Wi-Fi access, and management of customer loyalty programs which will further drive revenue. Real-time dashboards are being used to access and manage devices, transactions, and user profiles to distinguish between different users, supporting the widespread adoption in the retail sector. Businesses are becoming more customer-centric. Utilizing functions and capabilities such as business process monitoring and big data and analytics to obtain insights into the customer behavior, companies can use connected retail systems to boost interaction and strengthen relationships between the customer and the business.

Convenience Stores
With approximately 155 thousand convenience stores in the United States, they can serve as another good example of what’s going on in IoT. In early 2017, Alimentation Couche-Tard Inc. gained regulatory approval to acquire 1,300+ convenience stores from CST, better known as Corner Stores, the division that had recently been spun out of petroleum refiner Valero. This followed a decision by Valero and CST to do a brand enhancement exercise, with new paint, signage and a more modern look and feel to many of the stores. On top of the cosmetic changes, they hired integrator Acumera to enable the multi-site retailer with a secure and reliable wireless failover solution for systems dependent on internet connectivity such as cash registers, fuel pumps, point of sale terminals, on-roof solar collectors, and surveillance cameras.

Furthermore, patrons of Corner Stores received the benefit of Wi-fi access in stores. This added convenience may not seem like much from the outside, but all these pluses add up to brand loyalty, repeat business, and a higher lifetime value (LTV) from customers.  

Now that connectivity has been established in the stores, the transformation of historically “dumb equipment” and “dumb devices” like coolers and shelves can now be monitored. These devices when interconnected can create an intelligent network, and many potential applications can be developed. By connecting lights, refrigerators and building management (heating and cooling) systems, air conditioners, and storage tanks, retailers can deploy cloud-based equipment management systems to implement remote diagnosis and preventive maintenance, or an automated lighting and air conditioning system that achieves optimal indoor air quality and energy conservation.

And by installing video cameras in and around the stores, the captured images can be streamed to a cloud-based analytics ingestion engine to implement image analytics which can improve security or to conduct customer behavior analysis. And, once you connect refrigerators, inventory storage, store shelves and PoS systems to the cloud, sales and inventory can be monitored and retailers can better measure the real-time cash flows at all stores.

Additionally, with the cost of wired broadband reliability out of reach for many enterprises with distributed locations, mobile broadband represents a relatively small investment in failover to keep operations running. With Out-of-Band-Management through the cloud enterprises can have a secondary path to devices at remote locations when the primary network goes down, providing minimized disruption and a value-added layer to any failover solution instead of downtime.

Casual Dining
Casual dining establishments are moving to IoT based connected solutions because the ROI is straightforward and easy to measure. IoT in the very competitive food service space relies on the innovations of applications which provide clear ROI or have a strong business case. It is a pennies business and each application will need to stand on its own.

They start first with PoS and then move to broader IoT solutions. Many of the restaurants were architected 10 or more years ago, and have a dependence on a single dial-up connectivity solution for credit card transactions.

With credit card transactions taking around 15 seconds of processing time, there was a definitive need to reduce transaction processing times to improve customer satisfaction and cash out more people quicker. Often, restaurant and franchise owners would attempt to solve the problem by installing additional phone lines, but this is like trying to solve highway congestion by adding more on-ramps, only adding in more problems.

And because companies that accept credit cards must meet Payment Card Industry (PCI) data security standards, a solution with a singular cellular router makes it much easier for an organization’s internal audit team to confirm that each location meets PCI standards.

And in addition to connecting PoS solutions, restaurant owners started looking for improved customer satisfaction scores and gaining repeat business by offering free wi-fi for customers.

Moreover, restaurant management identified that efficiencies could be gained by connecting coolers, fryers, lights, refrigerators, building management (heating and cooling) systems, and storage tanks together thereby creating a sort of Kitchen-area-Network (KAN) in addition to the front-of-house solutions.

In order to meet these needs, companies initially considered installing wired Internet access. But many chain restaurants are designed so efficiently that running the necessary wires and conduits would have been costly and too disruptive. With those things in mind, wireless / cellular broadband becomes the logical solution.

Cellular broadband solutions can reduce transaction times to four or five seconds, they have helped the foodservice industry improve food quality and consistency, operational efficiency, safety, cleanliness and sustainability through the automated delivery, storage, handling and disposal of fryer oil.

With cost savings enough to make the decision to deploy wireless broadband, increased efficiency, improved management practices, consistent food, better equipment utilization, reduced energy costs, increased employee engagement/morale, increased customer satisfaction, and repeat business are some of the additional benefits.

Other Areas
After a decade hiding in the witness protection program, RFID is starting to emerge as another go-to retail application. Initially fumbled in a high-profile deployment gone wrong by Walmart, technology has matured, prices have gotten lower, and processing power has grown exponentially causing a resurgence in RFID solutions that extend the supply chain all the way to the cash register.

We’re seeing that north of 75% of US retailers are investing in IoT technologies such as automated inventory verification and sensors on shelves. One of the key areas retailers are addressing is supply chain performance. We believe that nearly 80% of retailers will attempt to reinvent their supply chain with real-time visibility enabled by automation, sensors, and analytics based on Internet of Things technologies.

While early IoT use cases have focused on supply chain and operational efficiencies, the next generation of IoT has retailers focused on omnichannel and the customer experience. While inventory visibility, supply chain, digital signage, PoS and branch failover can reduce costs and the risks of business disruption, retailers want IoT to deliver on ways to interact digitally with consumers in stores, and they want to blur the online and instore experience. In other words, retailers want IoT of the future not for operational efficiencies, but for enabling customer service.

The Final Word
The differentiation with IoT will come from a retailer’s ability to sense, understand and act on IoT data with analytics. It won’t be in the technology, the devices or the IoT plumbing; but in the use of contextual data. To take advantage of this new promising area, retailers should focus on IoT applications that better serve customers and create an engaging in-store experience. And if retailers can control their impulse to spam consumers with promotions, they might actually succeed in using IoT to create customer value.

Edited by Ken Briodagh

Founding Analyst and Chief Technology Evangelist

Related Articles

Beyond the Closet, Connecting to IoT

By: Gary Audin    11/11/2020

Two challenges arise when considering cable based IoT.

Read More

Banyan Security Enhances Secure Remote Access for Engineering Resources

By: Ken Briodagh    10/27/2020

Banyan's Continuous Authorization Can Grant or Revoke Access to Sensitive Engineering Environments and Applications in Real-time Based on TrustScore

Read More

Senet Eyes RAN Partnerships as Key to Delivering Network Services for Massive IoT

By: Arti Loftus    10/21/2020

To meet the challenges that come with providing network connectivity for IoT solutions, Senet is executing a strategy for massive IoT that will be bui…

Read More

mimik Selected by 5G Open Innovation Lab to Drive Early Adoption of 5G

By: Ken Briodagh    10/15/2020

mimik's patented Hybrid Edge Cloud platform will boost the performance and reduce the cost of 5G Networks

Read More

5G Sets New Standards for Vertical Industries' IoT Connectivity

By: Special Guest    10/13/2020

As 5G rolls out across the world, vertical industries across IoT are working on additional standards to make the technology suitable for their industr…

Read More