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Retail Trends in the Internet of Things

By December 8, 2015Article

Editor’s note: Beacons, digital signs, PoS terminals and security cameras all point to a wide array of information, thanks to the Internet of Things (IoT). But are organizations capitalizing on all the information? We contacted Richard Mendis, chief product officer of AnyPresence, to find out how retailers are leveraging information coming from IoT devices. Rich will participate in a panel discussion, “Retailers Meet Consumers with IoT Solutions” at the IoT Evolution Conference and Expo, January 25-28. is a sponsor of the upcoming conference. 

Do you think that the retail industry is a frontrunner in adopting IoT solutions? 

Richard MendisRich Mendis: I think they are an early adopter in the sense that there are IoT solutions that they can leverage for in-store. Retailers have a couple of different segments: in-store retailers and e-commerce retailers. For in-store retail (retailers that have storefronts), the obvious fit is leveraging Bluetooth beacons or beacon technology so that they can identify shoppers when they come in, target them with specific offers and track foot traffic within the store. There is a lot of insight and granularity that retailers can get from adopting a subset of IoT around using beacons. 

Both retail segments deal with inventory of goods and supplies, warehousing and shipping, and logistics. There are certainly advantages they can gain from leveraging IoT in helping with logistics. Whether it’s RFID tracking, or people in warehouses using things like Google Glass or other wearables to do hands-free operation and ship items out more efficiently or faster, there are a lot of advantages to be had there. 

So I think retail is an early adopter, but I don’t know if one industry is further ahead than another at this point. There are some obvious early adopters like industrial and energy that have been doing it for a while, if you consider sensors and smart meters in the IoT space. 

In the in-store segment, are retailers targeting customers through wearable tech yet, or are they mostly targeting customers through their smartphones? 

Rich Mendis: I think there is a willingness to explore wearables, but it’s still early. It will be a while before we see full-fledged solutions. Wearables bring an interesting challenge for location-based things in that the resolution is not yet super accurate. So you may get notifications on your watch, for example, if you’re walking by a retail store and not necessarily in the store. The beacon technology is a lot more accurate than the GPS technology in a smartphone. I think we’ll see improvements on that and more adoption of it in 2016.

What are the biggest trends you’re seeing in the retail space regarding targeting customers with personalized experiences? 

Rich Mendis: We are seeing a couple of things. A big area of interest is whether retailers can enable consumers to do more with their mobile devices. Can they add stuff to their cart and maybe even make a purchase transaction without standing in line, for example? One of the banes of a busy retail season is customers standing in line and waiting for a long time to part with money. Retailers are starting to realize they can do what Apple, for example, does in its stores: launch a mobile app, scan a product, make a purchase and leave. 

Another area where we’re seeing a lot of interest is the employees in a retail store using mobility, primarily tablets, to help shoppers find what they want. This is happening in more upscale stores that have concierge services or personal shoppers that can pull up a customer’s profile, look at their past history, make recommendations and show them how certain items would look. And it’s all done on a tablet or other mobile device so they can be wherever the customer is on the floor. 

The process of brainstorming around an IoT opportunity as well as developing the actual product is a cross-functional change-management process. Are most companies these days able to do this effectively? 

Rich Mendis: Change management is a challenge, just like it always has been. I think what’s different now is you have so many different technology components to choose from to solve a particular problem that you don’t have to default to one or two tools in the toolbox. 

What’s nice about IoT and mobile and next-generation technologies is they actually force companies to spend more time focusing on the business process that they’re trying to improve or enable; and then the technology comes after that and enables that business process improvement. They have a lot more flexibility now to enable business processes in different ways, whereas in the old school client-server or web application days, they were married to using a PC or laptop and having a large-screen Web application. To solve a business process now, they have the ability to integrate with different systems and can build a solution that has a mobile or wearable app that is much more portable or transient. 

Are there any pitfalls in trying to develop an IoT solution for the retail industry? For instance, I would think a pitfall would be not building it for the way regulations will evolve. 

Rich Mendis: In the retail sector, there are not as many regulatory hurdles as healthcare or insurance. There are still considerations. One is if you are processing financial transactions, then of course PCI compliance is important. The other is privacy. If you’re gathering a lot of consumer data, which ostensibly needs to be information that helps you personalize and target offers, then you need to think about the privacy implications of that and ensuring the customer’s trust, making opt-in features and those types of things. 

It’s not as bad as healthcare. With the IoT in healthcare, there are some pretty heavy-duty regulations around HIPAA and FDA compliance when building a connected medical device used in prognosis. 

When you look at what’s happening in the retail IoT space, how has it changed from 2014 to 2015? 

Rich Mendis: In 2014, there may have been things going on behind the scene in terms of inventory management that affected employees, but nothing significant in the consumer space. In 2015, one thing that has become ubiquitous is that pretty much every merchant has a mobile app or a mobile-optimized website. So if you want to purchase an item and you plan to go to the store to pick it up, most of the time now you’ll be able to purchase it on your mobile app and have it held for pickup in the store. Although, believe it not, a lot of retailers have separate inventory management for their website versus what they have in stores. So it’s not that seamless. From that perspective, I think retail is lagging in some respects. 

How do you think it will change in 2016? 

Rich Mendis: I think what we will start to see in 2016 is perhaps a little more use of beacon technology, location-based tech. For instance, if you’ve installed the app from the retailer and you walk into a store, it will notify you and say “welcome.” And it may pull information from your past purchases and give you recommendations, inform you of their specials, or ask you to let them know if you’d like to try something on. 

What is one of the more interesting or exciting aspects of how the software in this space is developing? 

Rich Mendis: I think one of the next stages of maturity for the IoT is tapping into the innovation of customers and partners. Retailers being able to provide API access to their systems and allow third-party software developers to build interesting solutions could be another trend that we see. We’re starting to see this in the financial services sector where companies like MasterCard and Citi and others have opened up APIs to their services and are getting external partners to do innovation. MasterCard runs a Masters of Code series around the world; Citibank runs Mobile Challenge days around the world, where they encourage and partner with others to foster mobile app innovation. We may start to see some of that in retail. I think that’s the next level of maturity. is proud to be a sponsor at the upcoming IoT Evolution Expo, January 25-28, 2016 in Fort Lauderdale, Fla. The conference draws an international audience of IoT software companies, large enterprises, SMBs, network service providers, platform providers and device manufacturers.  

Richard Mendis is co-founder and chief product officer of AnyPresence, a software platform company that reduces the time and cost of building enterprise mobile apps. Prior to AnyPresence, he was VP of solution management at SAP, working in the CTO and sustainability offices. He joined SAP through the acquisition of his last startup, Clear Standards, where he was co-founder and CMO. Before that, he was VP of marketing at Current Analysis, a technology research firm. 

Kathleen Goolsby is managing editor of 








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