You might think today’s monolithic shopping malls are by design a monument to human convenience, the truth is they are anything but. Their layout is intentionally confusing, designed to make you lose track of your original intentions, and more susceptible to making impulse buys. It’s not a theory, it’s a scientifically- proven psychological phenomenon known in the retail business as the ‘Gruen transfer’, named after pioneering shopping mall architect Victor Gruen.
Disorientating shoppers and presenting them with lots of things to buy brings the ‘transfer’, the moment you stop shopping for something in particular, and start just shopping in general. It’s why our most commonly bought items—milk and bread—are usually at the furthest corner of the supermarket, not conveniently at the front.
The irony is Gruen hated such design. His vision was for an efficient shopping mall experience, not one disrupted by bright lights, diversion tactics and illogical floor plans. If Gruen were still with us he might appreciate that today wireless technology is disrupting that disruption, working hard for both retailer and consumer, and completely reinventing retail at every level and in every way.
It is a widely held misconception that COVID-19 precipitated the downfall of the physical retail store. While the pandemic undoubtedly changed the face of bricks and mortar retail, rumors of its demise have been greatly exaggerated. According to U.S. Department of Commerce data, ten years ago e-commerce accounted for 8 percent of retail purchases, today that’s 20 percent. After significant pandemic-powered growth in online sales in 2020, by 2021 physical retail was growing just as fast, and from a much higher base. By 2022, e-commerce in the U.S. topped $1 trillion for the first time, but total retail sales were a shade under $5 trillion. There is life in physical retail just yet.
“Physical retail is not disappearing, it’s changing,” says Lorenzo Amicucci, Business Development Manager – Retail at Nordic Semiconductor. “Success comes from embracing new tech that can enhance the customer experience and offer something complementary to online purchases. The future of retail isn’t online or offline – it’s both.”
The advent of multichannel retail has raised the stakes on logistics. If one in five customers want to buy online, then it’s imperative retailers can meet this demand. But some consumers want things ‘now’, not even tomorrow and definitely not next week or next month. This instant gratification is why physical retail retains its dominance.
Yet, the success of e-commerce has been the ability of retailers to close the gap between desire and delivery. Amazon set the bar with the promise of same- or next-day delivery. Other retailers have followed, and IoT technology has become crucial in delivering on this promise.
“It’s more important than ever to track goods across the entire value chain in ‘real time’ - from production to warehouse to customer,” says Amicucci. “Accurate data not only helps retailers get products to the consumer faster, it also mitigates against losses.”
Bluetooth LE has proved a reliable tech for tracking and monitoring products in transit. For example, wireless devices equipped with thermocouples and accelerometers can be placed in refrigerated and fragile cargoes to monitor temperatures and impacts. They can ensure cold chain deliveries remain within temperature tolerances, and allow remedial action if an excursion occurs. When paired with cellular IoT technology, data can be sent directly to the Cloud, allowing remote monitoring without the need for a smartphone or gateway, and enabling a more holistic view of a supply chain through web-based logistics platforms.
Just-in-time e-commerce has also demanded online retailers’ warehouse operations significantly improve their performance. IoT technology is now essential in the warehouse to improve the visibility of physical assets across a floor space that in the case of Amazon’s new warehouse near Ontario, California, will sprawl to 371,000 square meters and dispatch 125 million packages a year. Wireless sensors, connected networks, location services and machine learning (ML) will combine to ensure consumers’ unpredictable buying patterns, and smaller yet more frequent orders across many and varied product lines, continue to be met with the same or next day delivery promise.
It’s not only online retailers who have been forced to embrace technology to improve the customer experience, physical stores have also had their digital epiphany. Consumers may still prefer the face-to-face retail experience but they expect all the benefits of online shopping.
“Physical stores are becoming more digital as customers expect a similar experience as online shopping,” says Amicucci. “Retailers have to be able to respond to the requirements of today’s consumer or risk losing them online, or to a digital savvy store. Consumers want to use their smartphones as part of the in-store experience. They may want to know the specific details of a product, compare pricing, or read reviews. If they are a loyal customer, they might expect a special price.”
Pricing is both art and science, influenced by factors such as demand, competitor pricing, market conditions and economic trends. Dynamic pricing is one of the most effective ways of increasing sales, because it adjusts prices based on the willingness of customers to make purchases. Airlines and Uber are two examples of businesses that employ ‘surge pricing’ to dynamically raise prices based on holiday seasons, the time of the week or location. For bricks-and-mortar retailers that required changing price labels. But wireless tech has now transformed dynamic pricing for physical retailers.
Smart shelf labeling systems enable retailers to automatically update from a central point across multiple stores and branches—or in certain geographic locations—to enhance the customer experience and retailer profitability.
For example, Minew ESL (Electronic Shelf Label), developed by China tech firm Shenzhen Minew. Technologies, allows retailers to improve price visibility, reduce both pricing errors and labor costs, as well as offer promotions in near real time. Comprised of a Cloud platform, gateways and Nordic Bluetooth LE-powered shelf labels, pricing commands can be sent wirelessly from the web-based dashboard to store-located gateways, from which point commands are relayed to the smart labels using Bluetooth connectivity. The smart labels can also be used as beacons for marketing to consumers in close proximity via compatible smartphone apps, and for reporting back to the gateway and the Cloud platform, allowing retailers to remotely monitor and manage their stock.
For those in any doubt that smart labeling systems are the future, U.S. retail behemoth Walmart has entered an agreement with a digital retail solution company for the provision of 60 million digital shelf labels across 500 locations over the next 12 to 18 months, leveraging the Bluetooth Special Interest Group’s (SIG) new standard for ESL.
If pricing is important, then making sure there are products to sell in the first place is fundamental. There is no bigger retail turn-off for a customer than empty shelf space, but keeping shelves brimming is labor-intensive. Behind the cost of inventory, a retailer’s next highest operating expense is payroll. Maximizing both staff efficiency and stock availability requires careful planning.
Rather than relying on an army of stackers to constantly monitor shelf inventory, tech-savvy retailers are now deploying Wi-Fi-connected shelf cameras as well as cellular IoT-based remote monitoring to ensure shelves and products remain well stocked. Combined with Cloud-based AI models to identify empty space, staff can be focused on replenishing shelves only when required.
One company that has embraced cellular IoT wireless technology for remotely monitoring its retail assets is U.S. based frozen drinks company Freezing Point, parent company of consumer ‘slushie’ brand, Frazil. The company recognized one of the key reasons the 50-year old slushie industry was suffering from sluggish growth wasn’t that consumers had lost interest in frozen drinks, but that the appearance of machines and freshness of the slushie on offer often acted as a deterrent to purchase. Nearly empty reservoirs kill sales because consumers think the beverage inside is old and stale – even if that is not the case.
“Consumers hadn’t fallen out of favor with ... slushies, they’d fallen out of favor with a poor customer experience,” says Kyle Freebairn, CEO of Frazil. To address declining sales the company partnered with Norwegian IoT tech company, 7Sense, to develop a low-cost circuit board based on Nordic Semiconductor’s nRF9160 SiP. Once retrofitted to existing slushie machines the board enabled remote NB-IoT monitoring of frozen beverage machines.
“With the cellular IoT enhancement, our customers won’t even have to phone us for most issues; if they have a problem, we’ll know before they do,” says Freebairn. The result was sales growth at 10 times the industry average, that more than offset the cost of moving to cellular IoT. Together with other innovations such as self-checkouts and contactless payment, tech helps retailers contain labor costs, while maximizing sales and consumer experiences.
Throughout history people have quickly realized that bad food can make you sick, but before the advent of commercial refrigeration at the turn of the 20th century, food safety standards weren’t always as rigorous as they are today. Despite much improved practices and multi- level governance for regulation and enforcement, food safety incidents still occur, and the fines for the negligent can be eye-watering. Back in 2020, Chipotle Mexican Grill agreed to pay a $25 million criminal fine for a foodborne illness outbreak that made over a thousand people sick.
A faulty or broken refrigerator in a supermarket could at best result in thousands of dollars of spoiled stock, or worse cause illness in a customer that could not only incur a hefty fine but catastrophically damage a business’ hard- won reputation. Wireless IoT solutions are now widely deployed to mitigate against such risks by early detection of food inventory spoilage and automation of previously manual temperature measurements. For example, last year Canadian company Stratosfy launched its Tempgenie solution comprising temperature sensor beacons and a Bluetooth LE to Wi-Fi gateway both integrating Nordic’s nRF52840 SoC. The beacons measure the ambient and surface temperature of front- and back-of-house equipment, and relay the data to a Cloud platform for round-the-clock monitoring of a potential issue.
Also launched last year was the SECO Energy Sensor smart plug, developed by German IoT solutions company Lemonbeat, that detects a range of energy parameters and allows the user to remotely assess whether their commercial chillers or freezers require maintenance. The smart plug employs a sensor to record energy, voltage, power and current variables, and can be retrofitted to any 230 V-powered device. The device then uses an nRF9160 SiP to relay data to a Cloud-based platform. “With a highly granular monitoring of energy parameters ... it is possible to detect patterns ... about the health status of the chiller or freezer and whether it needs maintenance or not,” says Lemonbeat CEO, Oliver van der Mond. “This means SECO is able to schedule a service only when it is actually needed.”
Such solutions may not be new, but what is new are the communication infrastructures that can be leveraged for this purpose. One of the most promising is Thread, where sensors can be added to create a mesh network to collect data from around the shop. “Thread networks support low power devices ensuring they operate efficiently and securely, making them ideal for battery powered and sensor based retail applications such as monitoring refrigeration equipment,” says Nordic’s Amicucci.
And it’s not only refrigeration equipment that can benefit. As many retailers are discovering, their lighting is the retail is not perfect conduit for introducing connectivity. Lighting is everywhere in the retail environment, and importantly it is not reliant on battery power. By connecting sensors to a Thread or Bluetooth mesh network in the lighting system, not only can condition monitoring and predictive maintenance applications be supported, but HVAC and the lighting itself can also be optimized. For example, the lighting or store temperature can be automatically regulated to provide comfortable conditions for customers.
Lighting infrastructure can also host occupancy or presence sensors, allowing illumination to be adjusted based on the number of people in parts of the store. The sensors can also be used to track the movement of customers, creating heatmaps to help retailers understand where they spend the most time to optimize store layout.
The release of LE Audio and Auracast broadcast audio capabilities by the Bluetooth SIG, will introduce retail into the customer experience. “This enables exactly the type of hybrid online and offline retail experience consumers have come to demand,” says Amicucci. “The introduction of Bluetooth Direction Finding [also enhanced the customer experience by] providing the basis for precision positioning and ... helping both customers and employees find products faster and easier.”
These wireless technologies have taken the evolution of retail full circle, away from the deliberate and coercive manipulation of the consumer’s senses described by the Gruen transfer, and back towards Victor Gruen’s original idea of a retail experience based on ease and efficiency. As Gruen knew, at its essence, successful retail isn’t about the retailer getting one over on the customer. The art of a successful retail exchange is to ensure a satisfactory outcome for both parties. Today, wireless tech is improving the retail experience for everyone, maximizing profits and reducing costs for the retailer, and delivering value added convenience to customers.