Kroger’s New Tech Platform: Sensing Something Big in Store

The recent introduction of Retail Site Intelligence (RSI), a store technology platform based on the ZigBee wireless standard and collaboratively released by Kroger, EInfochips and Wincor-Nixdor, reinforces the coming explosion of sensing technologies in retail. I recently wrote a column about why retailers love the iBeacon, the Apple iOS 7 technological feature that uses low-frequency Bluetooth transmissions to help mobile devices track their position relative to stationary beacons. iBeacon technology is very important in its own right, but also a subset of the larger sensing revolution.

Sensing technologies allow devices to directly contact and communicate with each other, on an automatic and continual basis. This creates what is known as peer-to-peer (P2P) or machine-to-machine (M2M) connectivity among what are often referred to as “smart” devices. While smartphones are by far the most well-known smart devices, almost any mechanical device, from appliances to cars to video cameras (more on that shortly), can be made “smart” and part of a P2P network.

Widespread connection of a large variety of devices to P2P networks, which has not happened yet but almost surely will in the next few years, will create what is known as the “Internet of things” or “Internet 3.0.” This means enough devices will be automatically sensing each other, exchanging data and taking action in response, to create a new iteration of the Internet that is much less reliant on direct human participation. The implications for retail, especially in the store, are significant. Let’s review a few in brief.

One Device, Many Functions
Kroger’s use of RSI hinges on the placement of ZigBee-enabled video cameras that in addition to performing loss prevention and customer analytics, also perform tasks such as sensing temperatures and managing queues. In the future, the cameras’ capabilities may be further extended to include functions such as sending targeted, location-specific offers to customer smartphones. Once linked into a P2P network, smart devices can perform a multitude of tasks, reducing the need for in-store hardware and customer interfaces.

The Last Mile Revealed
Despite the intensified retail industry focus on collecting, sorting and analyzing as much data as possible, the “last mile” a product travels from store to shelf remains surprisingly mysterious for many retailers. Smart shelves linked to smart cameras, POS terminals and other network-enabled store systems can transmit data on product movement which can quickly be collated with information on who is buying, which products, in what combination, order and timeframe, in real time. Sensing technologies hold the promise of penetrating the mysteries of the last mile and letting retailers optimize their store assortments, layouts and CRM efforts to a much higher degree.

Automatic for the People
On an opt-in basis, customers could take advantage of sensing technologies to automatically recognize what they browse, try on, and ultimately leave the store with. Shoppers could thus receive instant cross-sell and upsell suggestions, time- and location-sensitive personalized offers, and directions around the store, and then have a credit or debit account automatically charged when they leave.

Denimwear retailer Hointer already offers a shopping experience with many of these features thanks to its highly automated fitting room experience, but sensing technologies could truly turn shopping in a store into a fully automated process. The advantages in cost savings for the retailer and time savings for the customer are obvious, although at least for the foreseeable future retailers would also have to offer a more traditional, human-based shopping experience as well (as Hointer does).

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