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How the retail industry can benefit from EDGE IoT?

Vijay Anand
6 Jul 2022

Today, shoppers waste a lot of time searching for products. Retailers must physically check the quantity of a product on the shelf at certain times during the day. If a product is out of stock, and this isn’t recognized until a customer comes to physically check it out, it can lead to a big loss for the retailer. The potential of the retail market is overwhelming in today’s market trends, but the retail industry is aware of its own issues, and the major drawbacks its faces today, such as understanding consumer habits, reducing check out timings, spoilage of food, managing product shelves, preventing theft, monitoring goods, tracking energy utilization, managing in-floor navigation, and detecting crowded areas. Problems like burglary, worker theft, paperwork errors, vendor fraud, and monitoring shipments require quick, real-time analytics instead of storing data and analyzing it later with standard surveillance equipment. Another challenge is spoilage, especially in the food retail sector. For instance, one large retail chain reported a nearly $2 billion loss due to wasted and spoiled food caused by a legacy refrigeration system. Specifically, alarms from controllers on refrigerators were slow to reach the operations and maintenance team.

To address these challenges, there is a strong inclination towards the digitalization of day-to-day operations in retail stores, which has opened-up new use cases for the industry. Many retailers have started the digital transformation from analog, brick-and-mortar locations to digitally enabled, immersive customer experiences at various locations across the globe. As shoppers’ preferences, based on their lifestyle choices, are changing rapidly in the retail market, it’s high time that retailers adopt digital transformation. Here,there are many ways for retailers to provide a fabulous experience for shoppers, allowing them to choose and buy products based on their preference in-store(s) as shown in Fig 1. What’s more, the COVID-19 pandemic has also made many retailers rethink their strategies toward speeding up towards digitalization.

Fig.1: “Smart Retail – Evolving ecosystem” (Source: Internet/Public)

To realize the vision of digital transformation in the retail industry, Consumer IoT (CIoT) is driving retail businesses to convert standard retail stores into smart retail stores that help to understand a customer’s tastes, needs, and habits in real time, while they shop. For example, retail store owners can integrate different forms of sensors in key zones of their stores and connect them to a retail gateway, also known as an EDGE gateway, to perform real-time data analysis related to various product sales captured by these sensors. The CIoT, along with other emerging connected technologies such as data analytics, Artificial Intelligence (AI), and Machine Learning ( ML), is changing the shape of the retail industry. Many retailers are ready to make the changes required to implement intelligence in their stores, helping them to improve store operations, enhance customer experience, drive more business conversions, and solve day-to-day problems. The CIoT can enable retailers to predict customers’ behavior and provide more details about the products and services. As a result, shoppers want to purchase these products, which helps retailers to act upon and increase their daily sales and profits.

To realize this vision, retailers can consider many emerging technologies to not only enhance consumer experience, but also expand data collection and support data-based operations management. Some emerging technologies such as Edge IoT, AI, ML, and analytics have the capability to break down boundaries between brands, products, and customers.  With many retail stores considering IoT, the market is expected to grow to $94.44 billion through 2025[1]. Current trends show most retail stores are focusing on leveraging these emerging technologies to create ‘connected retail’ services and better shopping experiences for their customers.

The CIoT is revolutionizing the retail industry, facilitating a greater, in-store shopping experience and enhanced business engagement. IoT technology for retail can enable retailers to boost sales, increase customer loyalty, and allow shoppers to enjoy a more convenient and satisfactory shopping experience. As different retailers might have a different focus on achieving a connected retail store, many technologies, protocols, and hardware platforms (as shown in Fig 2) have been identified to build a smart retail ecosystem.  These realize possible use cases, as listed below, for achieving an improved shopping experience, automated business processes, better stock inventory, and supply chain management.

Fig.2: Smart Retail ecosystem covering different technologies, protocols, and hardware platforms (Source: Capgemini + internet)

Millions of data points must be processed at the edge of the retail network, instead of utilizing a high amount of a CSP’s network bandwidth, transmitting data to its data center, or cloud platform, and back to the retail store. Hosting the computing at the edge of their network instead helps retailers to engage with customers instantly, leading to much higher customer satisfaction. Carrying out compute at the edge of the network, processes real-time data immediately and returns intelligence quickly. An Edge-based system design for retail stores includes edge sensor nodes, edge gateway, and edge cloud (see figure 3) based on many wireless technologies and relevant protocols. The Edge-based approach for retail infrastructure not only covers the Edge design approach but also provides the methodology for addressing key challenges and other important aspects such as zero touch provisioning of IoT devices, theft prevention, energy management, secure transmission of data within the retail network, effective data compression techniques to manage the in-store network bandwidth, and finally, ensuring seamless network switching, network bonding between wired (fiber optic) and wireless networks (4G/5G), based on 3GPP ATSSS (Access Traffic Steering, Switching and Splitting) standard for remote access by retailers, allowing continuous interaction.

Fig.3: Smart Retail Ecosystem based on EDGE Concept (Source: Capgemini)

While the usage of Wi-Fi networks in retail stores offers simplicity, reduced administration, and greater cost-effectiveness, it suffers from issues around coverage, capacity, reliability, security, andhandoff. As the 5G market emerges, retail networks will soon be enabled with a 5G radio interface. This 5G network will be a dedicated private wireless network for retailers and shoppers, delivering secure, reliable, and efficient communication services to various products connected with the 5G network via an Edge gateway. In the world of retail, the adoption of new technology has never been more extensive, and retailers are left with no choice to deliver a customized and seamless experience to customers with varied services such as in-store navigation, digital signage, smart mirror, quick checkout, video surveillance, and electronic shelf tags – the list is ever-growing. Using RFID tags, cameras, mobile apps and other wireless technologies like LoRa, along with5G, retail stores can accomplish up to 100% inventory accuracy, minimize unexpected out-of-stock incidents, enable end-to-end store inventory management, and increase sales margins by certain percentage. The CIoT-based solutions can provide retailers with the ability to track the collection of products, analyze product popularity, and check out information on sold products at any time they need, including brand name, price, anddescription. With the use of machine learning software along with 5G, retailers can automate operations, optimize various processes, reduce their operation costs, and deliver a new, personalized experience to their valuable customers.

Smart retailing is the emergence of a new ecosystem for providing a newly personalized experience for shoppers. Retailers are working hard towards super-charging the in-store experience and the convenience that they can offer shoppers visiting their store to purchase different products. Retailers across the globe have taken various steps to realize the vision of a smart retail store, looking at “hot” future directions. One of these, the Edge-based concept, as presented in this blog, covers Edge nodes, Edge gateway, and Edge cloud, that enhances operational efficiency and customer experience to create smart and sustainable retail stores. The various killer applications identified as part of smart retail activities can be measured through a set of indicators via Edge sensor nodes, the Edge gateway, andEdge cloud to address different retail challenges and to provide the services required for shoppers and retailers to meet their end expectations. Today, every activity in the retail value chain – including logistics and warehousing, centralized procurement, marketing, operations, customer services, management, and cash flow – can be incorporated into a digitalized and intelligent platform, where Edge-based computing is just one of the countless number of emerging technologies transforming many of the mid-scale and large-scale retail stores. It has become a highly critical technology adoption cycle for retailers.

In retail stores, Edge computing provides a new paradigm for running existing applications like POS, and inventory management. At the same time, it is “oven ready” for other applications like augmented reality, smart shopping carts, smart shelves, surveillance, in-store navigation, energy management, digital signage, and many more. Edge computing and its associated software-defined concepts also give retailers the power to make things happen very quickly, to expand retail infrastructure with the facility of zero touch provisioning without having to rely on technical engineers in the retail store for the installation and manual configuration of IoT devices. The Edge-based solution design for retailers is all about transforming the way, workloads are hosted and managed in retail stores, with various advantages such as:

  • Low latency for critical / time-sensitive applications
  • Reducing the dependence on network bandwidth from CSPs
  • Improving the data privacy and security of retail stores
Fig.4: Retail Network Design based on 5G

In summary, a 5G-based retail network can be enabled for various use cases, as shown in Fig 4, under three different categories (eMBB, mMTC and URLLC) as per 3GPP R16/R17 standards. Key requirements like QoS, high speed/seamless connectivity, less latency, mobility, and security play an important role and address many of the challenges foreseen in other technologies. Each retail store can have its own 5G RAN network, operating in a private mode without any external interference, and can use it exclusively. Only authorized people (retailers) and end devices are able to access the private 5G network, and any data generated within the store is processed locally within the dedicated 5G retail network, ensuring high security and data privacy.

The retail business model will soon become a de-facto standard for many emerging technologies such as 5G, AI, augmented reality, and Edge data analytics to manage various retail operations as well as supply chain integration. Retail network infrastructure will become more sophisticated and integrated with the combination of these smart technologies and will create more autonomous outlets like Amazon Go. Technology like robots and machine/deep learning mean retail employees will be able to focus more on customer expectations and improve their stores’ performance to create the store of the future – smart, responsive, connected, and secure.

Vijay Anand

Senior Director, Technology, and Chief IoT Architect, Capgemini Engineering
Vijay plays a strategic leadership role in building connected IoT solutions in many market segments, including consumer and industrial IoT. He has over 25 years of experience and has published 19 research papers, including IEEE award-winning articles. He is currently pursuing a Ph.D. at the Crescent Institute of Science and Technology, India.