connected retail: the business case for iot in retail

CONNECTED RETAILTHE BUSINESS CASE FOR IOT

Oliver GuyRetail Industry DirectorSoftware AG

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A BUSINESS CASE FOR IOT

• The Internet of Things• Experimentation and the Business Case• IoT Maturity• IoT Innovation • Bringing it all Together

TODAY

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TODAY

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INTERNET of THINGS MAY BE BIGGERTHAN THE INTERNET ITSELF

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THE INTERNET OF THINGS IN RETAILPOTENTIAL VALUE

Source: McKinsey – “Unlocking the potential of the Internet of Things”http://www.mckinsey.com/business-functions/business-technology/our-insights/the-internet-of-things-the-value-of-digitizing-the-physical-world

per year by 2025.

The application of IoT withinretail has a potential impact of

$410Bn - $1.2Tn

http://www.mckinsey.com/business-functions/business-technology/our-insights/the-internet-of-things-the-value-of-digitizing-the-physical-world

http://www.mckinsey.com/business-functions/business-technology/our-insights/the-internet-of-things-the-value-of-digitizing-the-physical-world

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RETAILERS AGREEIOT WILL BE HUGE

My company has no idea how the Internet of Things will impact our own operations in the next 3

years.

The Internet of Things will have a dramatic impact on consumer products in the next 3 years.

The Internet of Things will drastically change the way companies do business in the next 3 years.

13%

39%

42%

21%

41%

38%

22%

16%

16%

30%

4%

3%

14%

1%

2%

IoT Perceptions In RetailStrongly Agree Agree NeutralDisagree Strongly Disagree

80%

Source: The Internet Of Things In Retail:Great Expectations

RSR Benchmark Report, August 2015

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CONNECTED RETAIL

Connected Retail combines new IoT initiatives with the enterprise to ensure data and actionable insights are fully utilized across the business.

Connected Retail will transform retail environments for the digital age.

WHAT IS IT?

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TODAY

10 | © 2015 Software AG. All rights reserved.

IOT IN RETAILEXPERIMENTATION

RFID TagsElectronic Shelf Edge Labels Smart Mirrors

Location AnalyticsBeacons Smart Badges

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TOP 3 IOT ORGANISATIONAL INHIBITORSTHE NEED TO SHOW VALUE

BUSINESS CASE AND ROI APPEARS TO BE AN ISSUE

Business leadership doesn’t understand thebenefits of Internet of Things

Overall Capital Requirements – we nevereven get to the subject of ROI

We have not identified a business case to support specificuse-cases for the Internet of Things

The technology supporting the Internet of Thingsis not mature enough for our business to invest

Our existing infrastructure is not capableof supporting Internet of Things

We don’t have the skills to manage the analytics andpredictive modelling required to take advantage of IoT data

Our IT team does not have the capacity to take onInternet of Things projects

Source: The Internet Of Things In Retail:Great Expectations

RSR Benchmark Report, August 2015

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JUSTIFYING A ROLLOUTBUILDING A BUSINESS CASE

© 2015 Software AG. All rights reserved.

?

Staff Efficiency Gains

Error Reduction

Reduced Paper & Print Costs

Business Case for IoT

Electronic Shelf Edge Labels


DRIVING REAL VALUETHE CASE FOR CONNECTED RETAIL

Real-Time POS Streaming

In-Store Inventory

Price and Promotion Optimization

Electronic Shelf Edge LabelsExperim

ental IoT In

itiativ

es

Existing Enterpris

e IT Functio

ns


DRIVING REAL VALUETHE CASE FOR CONNECTED RETAIL


In-Store Inventory



Connected Retail

Real-TimeOffer Alignment

1. Correlate POS data & inventory

2. Model future near-term performance

3. Adjust offer

4. Roll-out adjusted offer to shelves & POS


JUSTIFYING A ROLLOUTBUILDING A BUSINESS CASE




In-Store Inventory

Real-TimeOffer Alignment

+

+

+

= =Reduced Paper & Print Costs

Error Reduction

Staff Efficiency Gains

Increased Sales

Increase Promotional Uptake / Conversion

Reduced Stock-Outs

Increased Margin


DRIVING REAL VALUETHE CASE FOR CONNECTED RETAILTHE CASE FOR CONNECTED RETAIL

Time

Incr

easi

ng V

alue

& R

OI

Disparate Sensors and Initiatives

Make Sense of Multitude of Inputs

Alert and suggest actionsto improve and correct

Automatically take ‘Corrective Actions’

Leverage the ‘Retail Moment’Sense

Pan-Sensor Visibility

Automate

‘Actionability’

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THE INTERNET OF THINGS IN RETAILTHE RETAIL MOMENT

Source: Gartner – “Unlocking the potential of the Internet of Things”http://www.gartner.com/newsroom/id/3093819

The impact of digital business and the IoT will require advanced analytics to support real-time decision making to take advantage of momentary business opportunities.

http://www.gartner.com/newsroom/id/3093819

http://www.gartner.com/newsroom/id/3093819

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TODAY

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IOT INNOVATION IN RETAILPOWERED BY

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Serious About Retail

Strategic Partnerships

Retail Specific Solutions

Retail Insight and Thought Leadership

Technology Partner Investment

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SOFTWARE AGINNOVATING WITH IOT

Location Analytics

Real-Time Inventory Visibility

Location Based Marketing

Smart Store Monitoring

Free

25%

SALE50%

Admitone

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LOCATION ANALYTICSHISTORICAL DEVICE LOCATIONS

Hotspots of customer crowding

• Highlight problems

• Understand passage

• Understand impact of promotions and respond

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LOCATION BASED MARKETINGSPECIAL OFFER

Special offer for

Mr ClarkFree headphones with your new

iPad

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REAL-TIME INVENTORYUP-TO-DATE FIGURES

Real-Time InventoryUp-to-date inventory figuresin spite of delays caused by processing of the ERP systems

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SMART STORE MONITORING IN ACTIONSTORE OVERVIEW

Shading indicates high dwell times

Red indicates potential problems

Graphical store overview with overlays of dwell time, conversion and flow rates

Live, Historic, Predicted

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SMART STORE MONITORING IN ACTIONTASK ASSIGNMENT

Tasks assigned to staff based on need

and availability

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TODAY

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CONNECTED RETAILBRINGING IT ALL TOGETHER

https://www.youtube.com/watch?v=6OmhBclaOys



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LEVERAGING THE DIGITAL BUSINESS PLATFORM IN RETAILA SAMPLE OF CUSTOMERS

DIGITAL BUSINESS PLATFORM

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SOFTWARE AGWHAT IT MEANS TO YOU

50

Track record

used by over retailersglobally

In Retail Stabilityfor your futureinvestments

Global leader in process and data orchestration and real-time analytics

Support for industry standards

Independent and agnostic

Supportfor yourinitiatives

Extensive partner network

2,200 expert consultants across 70 countries

Global and Regional competency centres

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SUMMARY & ADVICE

IoT will revolutionize the retail industry

1Elevate the IoT conversation beyond individual initiatives 5

Taken in isolation, IoT initiatives are hard to justify2

Consider how IT platforms and digital transformation support the IoT business case6

Combining IoT with established enterprise IT drives new opportunities3

Think about how IoT initiatives can squeeze even more value out of existing investments7

“Connected Retail” is the name we give to this new paradigm4

When looking at IoT related infrastructure, make sure it can scale8

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www.SoftwareAG.com/ConnectedRetail

http://www.softwareag.com/ConnectedRetail

http://www.softwareag.com/Retail