Internet of Things – retail magic, or just another buzzword?

Red Ant, 29th November 2016

If Arthur C Clarke is right about advanced tech being ‘indistinguishable from magic’, the IoT has the potential to cast the biggest and most complex spell yet over the way we work, rest and play...

If Arthur C Clarke is right about advanced tech being ‘indistinguishable from magic’, the IoT has the potential to cast the biggest and most complex spell yet over the way we work, rest and play. McKinsey predicts there will be 20 – 30 billion connected devices and a market worth up to $17 trillion by 2020, so there’s little doubt that, far from being the latest in a long line of retail trends, the IoT is significant, it’s industry-changing and yet it’s poorly understood by even the most switched-on C-level personnel.

Last week’s IoT in Retail conference attempted to tackle what this means for retail – and the answer was ‘everything’.

Some clear messages came through across each of the expert speakers’ presentations and panel sessions, from managing board expectations to the nuts and bolts of operations infrastructure:

  • We’re only at the beginning
  • Data is the most important part to get right:
  • Retailers know they have to do something but they don’t know where to start
  • It’s predicted that a third of all retail jobs could be lost as a result of the IoT – something which needs to be planned for at the highest levels of industry and employment policy

They raised some big questions, with no obvious answers – it was evident that IoT can’t be pinned down to one single technology, activity or even definition.

While each speaker made it clear that they were only scratching the subject’s surface and the map remains largely undrawn, they were able to deliver some valuable insights into the challenges retailers are facing today so that they’re ready for IoT tomorrow.

Session 1 – ‘Show me the money’

Erik Staaf, MD, IoT-as-a-Service

Key insights:

  • IoT is the ‘fourth industrial revolution’ with effects so far-reaching we can’t quantify them yet
  • 53% of retailers don’t know what IoT is
  • According to Cisco, 43% of companies aren’t concerning themselves with digital disruption, which puts their future strategies at risk

Red Ant’s take:

Erik Staaf focused on business infrastructure and how IoT could improve efficiencies, free up resources and reduce costs. From a purely practical perspective, better asset management through connected buildings, improved safety through automated processes and reduced downtime through the IoT’s 24/7 capabilities can all contribute to a more streamlined business which is cheaper to run, but it leaves out the human element. What’s good for the business might not be good for the customer, and viewing assets as revenue-generating opportunities might be detrimental to the overall customer experience.

One of Erik Staaf’s key issues – one which would become a common theme throughout the day – was the management, security and ownership of data. He didn’t have the answers – no-one does, and it’s a cross-industry concern. The inevitable loss of jobs to automated processes is very much a cause for consideration – something he felt both the Government and employers should be planning for. It should certainly be part of a retailer’s five- to ten-year plan, but it remains to be seen if it’s practical to include such an indefinable proposition in employment policy, particularly with the inevitable post-Brexit changes on the horizon.

Session 2 – Rethinking retail – an industry at the disruptive edge

Darko Atijas, Vice President, Temando

Key insights:

  • There’s a gap between what retailers are offering and what customers want when it comes to delivery
  • Full automation has yet to come to a significant number of retailers – more than a quarter are still manually booking couriers and 43% manually process returns
  • Customers have embraced omnichannel – 97% would shop in-store and have goods delivered home, and 88% want to collect in-store. Retailers are missing out – only 33% offer click and collect, and just 27% offer from-store delivery, accept returns in-store and allow customers to view in-store inventory online

Red Ant’s take:

Temando is a global shipping platform, so Darko Atijas’ insights were based on the company’s research into the current state of retail fulfilment, delivery and returns. In a world where three in five of us make online purchases more than twice a month, it’s often the case that the person delivering your parcel is the only contact you’ll have with the retailer, so it’s important to get it right with timeslot/hyperlocal delivery. While the stats show that a number of retailers are well behind the curve, there’s a lot of potential for them to take the first step with automated click-and-collect, online ordering in-store and increased stock visibility. It’s not IoT yet, but it’s setting the stage for implementation.

Session 3 – Demystifying IoT – a 360-degree review

Michael Bayler, Author, Speaker and Consultant, The Whole Solution

Key insights:

  • The IoT digitises events in the physical world – digital instructions control physical events. But there’s such a lot of data and complexity that it’s hard to identify its value – retail boards are generally concerned that they have already wasted money.
  • Retailers have so many big problems to consider, not least their survival over the next 10 years, that they have trouble with ‘decisionality’ – making quality decisions
  • The business case for IoT should be about efficiency coupled with growth – both vital to prevent a business going bust

Red Ant’s take:

Michael Bayler pulled no punches – he started his presentation with the famous ‘ripples in the glass of water’ clip from Jurassic Park as an illustration of what it’s like to be on a retail C-suite these days. The IoT is coming, it’s big, it’s frightening and they ‘must go faster’ just to get out alive. Board members are listening and reacting to what they hear from the industry, but they are finding it hard to make the right decisions quickly and don’t want to back the wrong horse. What they need is reassurance that IoT is not about tech, it’s about value. And it’s not about efficiency on its own – companies could get so efficient that they kill creativity, flexibility and the human element that makes for great customer experiences, and with it the growth that is the lifeblood of successful businesses.

Panel session - Takeaways from IoT in Retail Pioneers and Early Adopters

Alex Sbardella, Consultancy Director, Red Ant
Karl Smith, CEO, Paradigm Interactions
Erik Staaf, MD, IoT-as-a-Service
Jim Keegan, VP Global Consumer Products Industry, IBM

Key insights:

  • Processing and analysing data is all very well, but it has to be put to use to bring any business benefits
  • The future will see chatbots and AI taking over more mundane tasks so retailers can focus on value-added activity – this will inevitably lead to a change in the world of work
  • Big companies have woken up to the idea of using lean and agile partners to get new tech processes to market

Red Ant’s take:

The conversation centred on each panel member’s personal experience of advanced tech and how to convince decision-makers that it is essential to act now to stay ahead of the huge wave of change coming towards them. Among discussions about just how powerful a network the IoT is and reinforcement of the need for external experts to ease the plight of CIOs and CTOs who are ‘swamped’ with information, our Consultancy Director Alex Sbardella made pertinent points about AI and the democratisation of data. Job loss was clearly a concern, with a number of questions from the audience about just how much it will affect the retail industry. Supported by IBM’s Jim Keegan, who pointed out that increasing revenue through increased efficiencies gave retailers the opportunity to employ more people in different roles, Alex Sbardella suggested that automating some run-of-the-mill tasks could free up colleague time for the development of more sales value through creative and innovative customer experiences.

Session 4 – The impact of IoT on the retail sector

Olena Kaplan, Principal Analyst, Beecham Research

Key insights:

  • Single customer view is more important than ever – the intelligent use of cross-channel data will allow for predictive analysis for stock/consumption as well as personalisation
  • Opening up access to data gives retailers all kinds of opportunities – but who is responsible for it, especially when it involves third parties?
  • Retailers are only just coming to terms with online and mobile commerce – they aren’t in a position to deal with this next big ‘threat’ alone and will need the help of external experts

Red Ant’s take:

Olena Kaplan took us through several scenarios, from self-maintaining coffee machines to fully IoT-enabled smart cities with personalised billboards to illustrate just how far-reaching the technology could be. With each scenario came the familiar issue of data security and ownership – it’s great to have a single customer view, whether they’re in-store, online or elsewhere in the journey to purchase, but working out who’s responsible for their details isn’t that easy, especially when you’re relying on third parties to deliver at least some of the experience. Her point about retailers needing help supported comments from the panel session and was a good indication of how retailers need to proceed to make their IoT strategies a reality.

Session 5 – Key retail innovations via the IoT

Danny Bagge, Director, Retail UKI Executive Partner, IBM UKI

Key insights:

  • Retailers are out of touch with how their customers are using digital – their online performance in areas like conversion, retention and time spent are falling across the board
  • A new world is being created by the customer – they have high expectations and want retailers to meet them. Activating these experiences via IoT is only limited by retailers’ imagination.
  • CEOs recognise that technology is the most important force impacting their business, but don’t know what to do with it

Red Ant’s take:

Danny Bagge’s overarching message was: tech (the software and hardware needed to provide connected retail) + insights (intelligent use of the data coming from those connections) + experience (what customers expect and what retailers are empowered to deliver) = a massive change, limited only by retailers’ imagination. Enabling the IoT and ‘connecting the dots’ using development platforms is the only way to deliver superior customer experiences and exciting innovations like chatbots and virtual concierges. And, while this will touch every part of the business from logistics to HR and operations, the most important IoT assets are people – customers, sales colleagues, buyers, designers and anyone involved in the retail chain can be empowered by the right kind of technology.

Session 6 – The impact on talent

Lucy Harris, Partner, Clarity Search Ltd

Key insights:

  • The IoT is affecting recruitment – retailers are trying to understand who to hire, from where and how to integrate new roles into the business
  • However, it’s still seen as a ‘shiny tool’ and is not currently at the top of their talent agenda, largely because not many retailers understand what it means
  • Cross-pollination across industry and discipline is the only way to find the right people – they need a unique combination of tech, customer and business skills which may not be found in retail

In Lucy Harris’ experience as an executive headhunter, retailers are still coming to terms with the IoT and how it will connect online with offline, and there won’t be a board-level IoT position any time soon. Most retailers need to become omnichannel and break down business silos before they can contemplate recruiting for any ‘transformation’ roles, but once they’ve got the fundamentals right they’ll be looking for people with the right mindset. They’re likely to be a ‘different thinker’, running their own business, be familiar with trading and have a high level of digital intelligence – a data scientist with entrepreneurial flair.


While every speaker suggested that a widespread inability to precisely define what the IoT is and to quantify its benefits may be holding some retailers back, each of the day’s sessions brought home its magnitude and the scale of its potential, if only retailers can overcome their fear of making the wrong decision. And they need all the help they can get to do that, from hiring the right staff to choosing the right tech platform to free up their data and make it work properly.

We can help make sense of IoT for retail

Red Ant is a technology partner that empowers retailers to connect online with offline. Our retail application platform delivers innovation and a fully-orchestrated, truly connected store experience today, and provides a robust, easy to use IoT platform for tomorrow. No need to compromise your existing infrastructure or delay taking action – we’ll work with you to cut through the complexity and build a strategy that you can implement in a matter of months.