Preface
Today, we can shop around the clock online, tap an Uber app to summon a ride in minutes, and we have an embarrassment of riches of products and services at our fingertips. We can price check countless items in seconds on our cell phone, spotting both a bargain and a rip-off.
These changes have vastly upped the stakes for retailers, which are frantically pulling all sorts of technology levers to keep step.
Based in this statement, I want to share my thoughts and ideas, and how SAP Leonardo can support retailers in this new world
In this article we will have a look at the current situation in the retail business, and discuss challanges and chances arising from connected business.
Let's have a look at a typical retail store. Even by today, various equipments are in use, some of them have sensors and some of them are connected to 3rd party operator and vendor.
Typical equipment in store are cash desk with scanner, various cooling devices either in store or in the logistic chain and various machines like vending machines or refreshment machines for customer convenience.
All these devices either support the logistic chain or the customers experience.
So what are the challanges and chance we see in connecting these devices, what is already available and can be used to either cut cost or drive turnover. And finally, what will support us in dealing with the threat arising from the online business.
Let us have a look at the POS first
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Modern stores have various types of equipment in use supporting day to day operations. Several of them are already equiped with sensors collecting data to monitor equipment health and recording sales activities. Some of them are already connected to monitoring dashboards sending error messages in case of failures. This is a good starting point, but we can do more. Think of a cooling device informing you of a failure in the middle of the night. Noone is in the store, service not available and all goods are lost as no immediate actions can be taken. So here we can d better using status and usage information to predict a failure and call service and replacement eraly on. This is one of the obvious cases, where IoT will help, but it is not the dealers business. it is more the vendors responsibility to use this to provide best in class service for the retailer.
Now let's focus on the retailers business - selling goods to customer.
Various types of equipment supporting hte retailers effort
electronic cash register with scanner - Checkout of goods any perform payment. Assortment and pricing information is stored and updated, sales data updated and customer information on purchased goods and payments are collected. Stock information can be updated in real time and replenishment ist triggered in case of high demand or predicted out of stock situations.
Other check out options include self scanning terminals where customer will scan their goods themself.
Even more advanced is the technology to scan the products the customer is carrying with him in a gate, send a list of this products to an app ot to display, and if the customer is leaving the store perform the cash activities using his credit card information stored on his accout. This process is only possible with kno customer logging on to the store system using his online or customer profile and haveing all goods in store using active lables.
Scales capture information on goods bought by customer. Stock information is updated, and price and product information is displayed. Connected devices can send and receive information in real time.
Connected fridges and coolers can provide information on electric power consumption and performance that can be used to optimize power consumtion based on open/close actions and fill level. These data can also be used to predict failures and plan maintenance activities. More important for retailers are usage patterns on daily activities to plan and perform replenishment.
Vending machines are used to sell small goods to customers or to provide goods to customer during out of office hours. They also sell goods in remote locations to small for a regular shop or goods that should be under strickt control either to age restriction or danger of theft. So vending machines are either in an shop adding POS capabilities or out of shop, e.g. in an airport or bus terminal. The can capture sales and customer data and update customer profiles.
Smart shelf and e-pusher can track sales of certain goods. The will be used for selected goods to capture changes based on promotions or to get real time stock and movement information to allow real time reaction and replenishment.
Return of emties is a spcial topic. Customers return e.g. bottles and continue shopping. Non working machines will see the customer walk away and no further sales is done. So even is this machine is not generating turnover, failures will affact overall business.
Coffee and smart drinks are sold to customers for convenience to enhance the shopping experience. To keep the customers happy full time operation is required so it is required to capture status and usage data to avoid out of operation situations.
Bread machines are used to sell fresh made bread and other backed products. Customer will choose this instead of packed products, so failures will lead to lost sales.
Now we will look at the backgroud processes supporting the POS
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Here we will have a look at two major topics, logistics and warehousing.
In logistics its all about time and quantity. So the main question is, what do we need where and when. So it is deceisive, do do the planning on data as accurate as possible. Today retail logistics is focused on a push process with the main focus on reducing cost. So we need to use as little transport as possible to bring stuff once a day to the retail store. Quite good, but is this enough to counter the offerings of an online vendor?
From our connected devices we can get all information we need to optimize logistics. We know what we have in store, what is sold in what quantities at what time of the day.
