BMC POV

There’s a lot of power in the idea that a properly defined problem is more than half solved. So: Why are so many retailers still in the doldrums 5 years after the “great recession” has ended?

Four factors are called out in a recent Fortune article, but we think there’s more to the story if you want to understand the whole situation.

Fortune’s list is a good start:

• Death by discount
• Too much retail space
• The nonrecovery recovery
• Stunted evolution

Here are two additional insights into how the marketplace has changed that complete the story.

• Retailers no longer have a cost-effective way to connect with large numbers of shoppers. The mass communications era is over, and the ability to easily move the market is gone with it. The implication here is that most retailers will struggle with same-store sales growth until they establish digital connections with enough shoppers to impact topline sales.
• The new normal means not only that the mix of stores will change, but also that the type and mix of products sold in the stores needs to change. The implication here is that although stores may be clearly differentiated on the basis of price reputation and value, they will not reach their full potential until they’re able to draw from a whole new set of products designed specifically for shoppers operating in each tier of the new “split-level economy.”

Retailers who build all six of these shifts into their thinking, will be much closer to turning the corner on sustainable same store sales growth.

 

The Bigger Picture

The issue facing food and grocery retailers is that it’s difficult to see all of the changes shoppers are making in today’s digital environment and changed economy – and even when the changes do become evident, there’s a good chance they’ll be denied. Retailers may not recognize them.

Some progressive retailers have absorbed the significance of the changes and are trying to respond, but they’re held back by two constraints that Bill Davis talks about in his recent BMC interview.

• The challenge of transitioning from legacy systems dedicated to supporting a single sales channel to integrated, omnichannel systems that are capable of supporting multiple sales channels.
• The scarcity of staff with the technical skills needed to make these changes happen consistent with the retailer’s go to market strategy.

Since retailers are trying to make these changes with significant resource constraints, it’s vitally important that they focus on the right problem, or they’ll overspend on the wrong one. Also, they need to find the lowest-cost transition path. Increasingly, this looks like it will involve cooperating more directly with online retailers and technology providers who’ve already moved comfortably up the learning curve. Kroger’s purchase of Vitacost is an example. Many others will need to rent the new capabilities in order to make progress affordable.

Location-based services: They came; they disrupted and will now rule the world

by Vishal Singhal, Kelton Tech Solutions, September 1, 2014

 

Smartphone penetration has risen to double-digit percentage of Indian mobile population and our life completely revolves around it. Harnessing this trend has never been more important for organizations seeking to capture and retain customers.

The trend of using location based concepts is not new but has evolved over a long period. A brief knowledge of how it all started will help readers in understanding how from ages, we have been using these and how they have technologically advanced over time so much that we predominantly depend on it now.

We have been using location technology since many thousands of years before Christ. From American Indians to Chinese, smoke signals were used to communicate messages and locate homes.

For centuries from early 3200BC, Celestial Navigation guided generations of people until the middle of 18th century when Chronometer was invented, and it helped sailors in determining the longitudes.

From 1000 BC onwards, Homing Pigeons came in and were used for a long time for navigation and courier services.

The Magnetic Compass came in between 1100 and 1200 AD and allowed navigators to determine where they are heading.

In early 1900s came the Radio Triangulation, which till today is used in many spheres. It worked by measurement of the strengths of radio signals, ships, aircrafts and military ground troops began to be able to estimate their coordinates from very long distances.

Satellite GPS was launched in early 1960s. A group of around 30 satellites orbiting the earth were used to triangulate the position of the receiver. Receiver sizes have been shrinking ever since 60s when GPS (Global Positioning Systems) were first tested.

Automotive GPS Navigation came in 1990s and now became a necessity in driving, commonly including maps and turn by turn directions. It has gained huge traction among consumers and is still installed in many automotive.

GPS-enabled smartphones came in 2000s.Though cell phones started carrying GPS in mid ‘00s, the debut of Apple’s iPhone brought the most notable changes to the industry, allowing a host of third-party applications to start developing programs to take advantage of the built-in satellite positioning hardware.

Also, now, Proximity and Geo-based marketing engagement allows organizations to provide its consumers the right information at the right time and the right place. This allows organizations to drive more revenue, improve customer experience, and develop deeper insights into visitors.

Location-Based Services (LBS) have essentially targeted outdoor spaces. Now accurate indoor localization technologies are also gaining traction. Most market analysts are agreeing that market of LBS (both indoor and outdoor) is set to grow in the next four years to a multi-billion dollar market, and that is what we are experts at doing at Kellton Tech.

Future of LBS in Mobility

iBeacons are one way to overcome the limitations of standard cellphone location services like GPS. They tend to be more accurate and can be deployed indoors. Besides, there are several companies that have created Wi-Fi-based location systems that can function indoors which is referred to as indoor positioning services.

Google’s Project Tango, announced earlier this year, is another technology that can be used in mapping spaces, particularly indoor spaces, where traditional location services flounder. As of now, this project is in the early stages but it could revolutionize indoor positioning and navigation in the coming years. It is worth noting that NASA will be testing it on the International Space Station later this year.

Apple’s iBeacons have gotten much press in last few months since Apple announced that it had outfitted all of its U.S. retail stores with the new technology. Besides Apple, other major retailers, shopping malls, sports stadiums, museums, convention centers, theme parks, restaurants and bars, and special events like the Consumer Electronics Show, Macworld/ iWorld, and SXSW have all featured iBeacon technology in interesting ways. The technology is also supported on Android phones running Jelly Bean or KitKat.

Apart from delivering ads and special offers, providing context to safeguarding, the technology is a next-generation location and information service.

The big advantage to iBeacons as a location service is that they are extremely inexpensive, and the setup is pretty quick and easy. Some examples of where iBeacons are being deployed are as given below:

Beacons in Hospitals: iBeacon will help the hospital minimize the usage of paper-based reports. When the doctor will reach the patient bed, iBeacon, attached to the bed, will recognize the doctor and cause the application on doctor’s phone to show-up all the reports and prescriptions for the patient. Doctor can edit the info right on his phone, and the information will sync across the devices with a central server.

iBeacons in Retail: “Get 7 percent discount on the camera in front of you!” Yes, this is possible with iBeacon. Imagine yourself walking into the camera department in your local department store. An iBeacon sensor can detect your proximity with a product that you are looking at and can offer you a coupon or discount voucher straight to your phone. Needless to say that retailers around the world are very excited about iBeacon, and many have started to implement it already (e.g. American Eagle and Macy’s).

iBeacons at Car Dealerships: It is imperative for car dealers to get more people into their dealerships. Providing a great experience to their visitors is thus an absolute must! iBeacon can get detailed information on the phone from the car.

iBeacons in large event venues like SXSW: Large event venues can place iBeacons around their venue and venue app or event app can show users exactly where they are inside the venue and provide routing on a tradeshow to any given exhibitor. Combining this technology with user profiling in apps opens up even more possibilities. A visitor on a tradeshow, with an interest in a certain product, can be sent a relevant offer straight to his phone when walking by a booth

There is a range of technologies that can enable indoor positioning; the most common are based on Wi-Fi. Wi-Fi-based indoor positioning systems triangulates location-based on the strength and proximity of Wi-Fi access points within a structure.

Configuring an indoor positioning system requires a few different steps and processes

• Accurate maps or floor plans for the space
• Ubiquitous Wi-Fi with enough access points at key positions
• Footprint of the entire space recorded from a device or software
• Compiled data to create a digital map of the space, complete with the proximity footprint

With all that data and services, a developer can incorporate indoor positioning and navigation into mobile apps.  

An indoor positioning system would allow visitors at the hospital to get-off at the appropriate floor and then use the app to get precise directions to the room of a patient. Although Wi-Fi triangulation is the most common choice for indoor positioning systems, any technology that can triangulate position based on proximity to electronic signals can theoretically be used instead. That includes Bluetooth LE signals generated by iBeacons. Using iBeacons or another technology offers an advantage over using Wi-Fi — the beacons are separate from the network infrastructure, which means a reduction in maintenance issues associated with reconfiguring Wi-Fi access points.

Other potential technologies that have been explored include LEDs, magnetic fields, RFID, and NFC.  Together these technologies will offer unprecedented value whether you are shopping, visiting someone in a hospital, finding your way through a large office complex, and in tons of other ways not yet imagined.

Location-based services (LBS) are services offered through a mobile phone and take into account the device’s geographical location. LBS typically provide information or entertainment. Because LBS are largely dependent on the mobile user’s location, the primary objective of the service provider’s system is to determine where the user is. There are many technologies to achieve this.

Some of the most common LBS applications include local news, directions, points of interest, directory assistance, fleet management, emergency, asset tracking, location-sensitive building, and local advertisement.

Read more at: http://www.informationweek.in/informationweek/perspective/297745/location-services-disrupted-rule-world?utm_source=referrence_article

 

Why Apple’s iBeacon Hasn’t Taken Off—Yet

– Bloomberg Businessweek 9/28/14

Hillshire Brands (HSH) sees the promise of Apple’s (AAPL) iBeacon, software that’s been embedded in iOS 7 for a year. With iBeacon, Hillshire can track a shopper wheeling through a grocery store and send his iPhone a coupon or an ad for sausages just as he approaches the right cooler. Hillshire says consumers in 10 U.S. test cities who received iBeacon messages via apps such as recipe service Epicurious have been 20 times likelier to buy its American Craft sausages. Last year, iBeacon promised Apple a new wave of consumer data and looked like a boon to retailers and advertisers trying to reverse a decline in impulse buys. Using a low-energy Bluetooth signal, the software makes an iPhone’s proximity to certain items easier to track with the help of $10 signaling devices—beacons—mounted on shelves and ceilings, each no bigger than a hockey puck.

For the most part, however, stores have yet to embrace Apple’s technology. “Retailers are just putting their toes in,” says Owen Geddes, chief executive officer of startup Appflare, which sets up iBeacon networks for merchants. He says there have been a lot of announcements by retailers that they are trying out iBeacon networks in a handful of locations, “but the reality is, very few of them have been deployed.” Less than 1 percent of the 3.6 million retail stores in the U.S. make use of iBeacon, says Mark Hung, an analyst at market researcher Gartner (IT). Apple declined to comment for this story.

The main obstacle for retailers is that iBeacon doesn’t quite do everything by itself. Shoppers need to have apps such as Epicurious or discount service Shopkick that have incorporated the tracking technology. Many consumers don’t consult shopping aids while they’re in the store, and, says Adam Silverman, an analyst at Forrester Research (FORR), “Those apps are gimmicky.” He adds, “The retailers haven’t yet deciphered what customers want.”

Another factor: Apple’s design wasn’t the first indoor location-tracking system available. Many businesses are experimenting with other technologies, includingMotorola Solutions (MSI) and Datzing beacons that use both Bluetooth and Wi-Fi signals. “I wouldn’t say it’s a clear winner at all,” Derek Top, an analyst at Opus Research, says of iBeacon. Shopkick is among the startups that combine Apple’s system with their own ultrasound technology to increase its accuracy.

Although Apple has a lot of big names using iBeacon, most, like Hillshire, are just testing it. Macy’s (M) has set up beacons in two stores that push product recommendations and discounts to Shopkick users; Lord & Taylor (HBC:CN) is doing the same in 10 stores with coupon app SnipSnap. Starwood Hotels & Resorts(HOT) is trying out iBeacon in 30 hotels to help concierges greet arrivals by name. Clay Cowan, a vice president at Starwood, says the service may also help accelerate check-in for frequent guests or inform housekeeping when a room is occupied.

IBeacon’s biggest convert so far is Major League Baseball, which put beacons in 28 of 30 ballparks. Bill Schlough, the chief information officer for the San Francisco Giants, says check-ins by fans using the MLB’s ballpark app more than doubled this season after the app began using iBeacon to help push merchandise coupons and seat upgrades. “For us, that’s a success,” he says. The MLB app is now adding short, location-specific videos on the history of stadiums.

Some barriers to iBeacon adoption are falling away. Google (GOOG) has built more iBeacon functionality into the latest versions of Android. GE Lighting (GE) has formed a partnership with startup ByteLight to develop lightbulbs that can also help track shoppers via iBeacon, which would eliminate the need for retailers to buy separate hardware. More companies are curious. “We have half of Fortune 500 developing with us,” says Steve Cheney, a senior vice president at startup Estimote, which designs hardware and software to work with iBeacon. There is just one major group of holdouts to persuade: shoppers.

Electronic Shelf Labels Revenues to Reach US$2 Billion by 2019, According to ABI Research

– Business Wire

LONDON–(BUSINESS WIRE)–Over the next 5 years Electronic shelf labels (ESL) are set to grow beyond retail markets in legislated countries, with revenues increasing six fold to almost US$2 billion by 2019.

In its latest report, “Next Gen Retail: Electronic Shelf Labels”, ABI Research outlines how ESLs will be a key link in the retail technology chain, representing a great starting point when NFC or BLE is integrated. Retailer’s attention has been caught by other technologies, but the ideal scenario and end game for most will be a tightly integrated system that consists of ESL, smartphone applications, BLE beacons, indoor location, mobile payments, digital coupons/loyalty, customer analytics, and omnichannel marketing and pricing. ESLs are a perfect starting point, bringing a return on investment-based traditional brick and mortar bottlenecks, while also opening the door to next generation services and revenue opportunities.

Senior analyst Patrick Connolly commented, “ESL, in combination with NFC and/or BLE solves ongoing retailer issues like, out-of-stocks, check-out expenditure reduction, manual price coordination overheads elimination, inventory and store layout management, omnichannel consistency, and efficient price management of shrinkage/perishable goods, delivering an RoI within 18 months on these use cases alone. With integrated connectivity, it also brings future potential around dynamic pricing, positive showrooming, tightly integrated in-store advertising/redemption/loyalty, analytics, and pay-as-you-go shopping.”

“Dynamic pricing can be a controversial topic, but many of the arguments against are naïve or based on scenarios that are unlikely to occur in the brick and mortar space. The reality is it will give retailers far more control and flexibility, with the ability to reward loyal customers, dynamically match pricing to varying demand, while also meeting the needs of price sensitive customers,” added Connolly.

Pricer and SES are the two major players in this space today, dominating traditional markets. In particular, SES has shown very strong growth over the last 2 years, with the recent imagotag acquisition giving it new capabilities. Displaydata (backed by Zebra Technologies) and Samsung are the clear emerging threats, with Altierre also achieving some success in its native United States market. There are also a number of localized start-ups such as Hanshow in China that will make this a very interesting market over the next 5 years.

These findings are part of ABI Research’s Location Technologies Market Research (https://www.abiresearch.com/market-research/service/location-technologies/).

ABI Research provides in-depth analysis and quantitative forecasting of trends in global connectivity and other emerging technologies. From offices in North America, Europe and Asia, ABI Research’s worldwide team of experts advises thousands of decision makers through 70+ research and advisory services. Est. 1990. For more information visit www.abiresearch.com, or call +1.516.624.2500.