The Nexus of Forces in Action – Use-Case 1: Retail Smart Store
Provide web shop services in physical stores (using NFC and mobile devices).
Primary Industry Sectors
(Store) Customer loyalty, increased revenues, targeted brand reinforcement, cross-selling, up-selling, real-time product promotion, improved customer service preference, improved in-store stock turns, improved supply chain replenishment efficiency
(Customer) Good advice, best price/quality for goods, expanded contacts via social networks
Key Business Functions
Customer service, store stock tagging, merchandise planning, supply distribution planning, in-store marketing, brand management, promotions and incentives management, store browsing, promotion creation, purchase
Retail consumer in-store, retail store first line staff, retail existing or new customer
Retail store marketing, retail merchandize stock planner
Mobile cellphone, contactless NFC tag, mobile customer/stock information application, customer buying behavior analytics, merchandise supply chain planning application, social network, point-of-sales, communications network, business supply chain performance analytics
IoT, social networking, big data MLA
(Secondary) NFC, cloud, mobility devices
A customer wants to browse through items in a store and potentially to purchase one or more items. He pauses from time to time to examine items. He receives value in the form of good advice leading to an optimal (price/quality) choice of product – or even to a decision not to buy.
The system is aware (via sensors) of the items being examined and provides information to the customer about offers and other similar or related items (cross/up-selling) or about use/manufacture/ingredients of the item.
The customer can consult reviews of the item by professionals or other customers (e.g., via social clusters) and analysis of recent purchase history for the item versus similar items.
The customer is able to make his browsing and purchase history available to store staff, who can offer further advice or simply exchange experiences (customer relationship building). Store staff are able to follow browsing behavior of items and customers (subject to privacy regulations and user preferences), compare with recent behavior, general trends, customer history (where permitted), and are able to create a promotion or offer based on this information.
The store receives value in the form of a strong customer relationship and reputation – and of course revenue, if the browsing leads to a sale.
Identity, description, sale price, and any current offer price of the items on display, customer identifier, and qualified relationship (subject to opt-in by customer)
Current Observations Data
Active number of browsing customers per item (type), browsing progress by customer (device) – subject to opt-in
Sales and pricing/promotion history for item, sales history for customer
Recent sales behavior for item (quantity, geography, customer type), social media reviews, and statistics for item, current promotion options
Action Taken Data
Item purchased, promotion offered/accepted
Real Business Examples
Experimental IoT retail services. The pilot encompasses four core elements of state-of-the-art retail operation using IoT technology: loyalty program, product information, coupon operation, and payment. The solution is not simply porting the physical environment into a mobile device, but enhancing the traditional functions with the ease and convenience of NFC, as well as with the information availability and social interactions of the web environment.
The following features are provided to customers: virtual shopping cart, advertisement, loyalty sign-in and status, shopping list, product information, product recommendation, product query, coupon collection and redemption, location information, payment.
(See the Elliot Project website.)
METRO Group Future Store Initiative
“RFID has already become established in many areas of day-to-day life. And new opportunities for application are continuously appearing. We want to give CeBIT visitors the opportunity to experience this enormous spectrum first hand,” says Zygmunt Mierdorf, Member of the Management Board of METRO Group. At the leading IT fair, the METRO Group Future Store Initiative is presenting RFID to see and touch: interactive multi-media exhibits, to demonstrate how the technology will help consumers while shopping, in the household, and during leisure activities. Visitors can also find out how RFID is used in logistics and warehouse management. A range of different topical zones offers insight into the future of RFID implementation. Exhibits show how shopping can be made faster and more convenient than ever for the customer. For example, the Smart Trolley automatically registers its contents and guides the customer to desired products. The Smart Dressing Room advises the shopper on which garments to combine. State-of-the-art self check-outs accelerate the payment procedure. In addition, guests can see how RFID optimizes processes in retailers’ warehouses and stores.
(See the METRO Group press release.)
Existing Interoperability Standards
NFC standards cover communications protocols and data exchange formats, and are based on existing RFID standards including ISO/IEC 14443 and FeliCa. The standards include ISO/IEC 18092 and those defined by the NFC Forum, which was founded in 2004 by Nokia, Philips, and Sony, and now has more than 160 members. The Forum also promotes NFC and certifies device compliance. It fits the criteria for being considered a PAN (source: NFC in Wikipedia).
Comments on Context
In a use-case an actor interacts with a system to achieve some goal. In these cases the store is the system.
There are legal and ethical issues of using mobile location analytic data from consumers.
(See the Future of Privacy website.)
- The store is large enough to rule out knowledge of (specific) customer behavior through purely human interaction.
- The customer is equipped with suitable technology and has activated it.
- All appropriate channels are available and functioning.