What Do Retailers Need To Take In-Store IoT To The Next Level?

By John Tait, TNS Payments Market

Networking solutions like SD-WAN help solve some of the challenges retailers face in their IoT environments.

Mid-20th-century science fiction writers like Ray Bradbury imagined a future that was completely connected — houses and buildings full of automated devices that could seamlessly communicate with each other and with humans, creating smarter, more efficient environments for work and leisure. This, of course, is not science fiction, and it’s not the future. It’s present-day reality — thanks to the ongoing expansion of the Internet of Things (IoT) in our homes, workplaces, and stores.

 When deployed in a retail store, IoT can deliver greater business intelligence through real-time data collection and analysis, helping retailers provide an exceptional end-to-end customer experience. A Microsoft report found IoT is “almost universally adopted in retail and considered critical to success,” and 67% of retailers surveyed said they wanted to go even further with their IoT.

Yet challenges remain. Some of the barriers to continued IoT expansion include scarcity of resources, budget constraints, and security, according to the retailers Microsoft surveyed. There’s no single solution to these challenges for all retailers. But it may be useful for some to revisit their networking infrastructure setup and determine whether upgrading legacy systems to a more modern configuration, such as software-defined wide-area networking (SD-WAN), can help move them toward the next level of their IoT goals.

SD-WAN For Next-Level IoT

Modernized network configurations like SD-WAN have the flexibility and bandwidth to securely support new IoT initiatives as well as business-critical processes like payments and inventory systems. SD-WAN streamlines network management operations by separating the way a network is controlled from its hardware, allowing data traffic to be dynamically segmented and directed. This alleviates network congestion, providing higher reliability and uptime, even when the same network must support multiple bandwidth-heavy IoT applications in addition to other systems.

SD-WAN can help offset — or even solve — retailers’ IoT challenges around resource scarcity, budget, and security in three key ways:

• Minimized security risks. Connected devices — and any points of interaction to and from apps or internet breakout — can serve as a backdoor into a network for bad actors wishing to access a retailer’s data. But because SD-WAN uses IPSec tunneling, the connectivity layer is only for transport; data on the network travels from site to site, or from device to device, fully encrypted and unable to be hacked. Some SD-WAN solutions offer best-in-class security protocols like antivirus features, URL filtering, and TLS packet inspection. Fully managed SD-WANs offer an additional layer of security because the provider actively monitors threats and keeps an eye on network peripherals — all the data going back and forth, and what devices are using them. If a device suddenly begins behaving suspiciously, the provider can quickly shut down the threat.
   
• Reduced operating expenses: Many retailers use Multiprotocol Label Switching (MPLS) to interlink branches, headquarters, and data centers. But while IoT devices and sensors exist in the physical world, their “brains” — the data processing and analytics capabilities — live in the cloud, and MPLS was not designed for the cloud. Often, when an MPLS must access the cloud, traffic from branches must be backhauled from a headquarters or data center. This degrades the quality of the connection, slowing network speeds, and straining bandwidth — but retrofitting an MPLS for the cloud would be cost-prohibitive and time-consuming.

Instead, retailers can replace legacy networks with SD-WAN, and use broadband to gain better connectivity, and reduce operational expenses. Internet circuits are typically one-third to one-half the cost of comparable-speed MPLS links, so retailers thus increase WAN bandwidth without significantly increasing WAN spend. What’s more, retailers can save money they would spend on ancillary network security measures by choosing an SD-WAN that offers some of the security protocols mentioned above. With these cost savings, retailers may be able to reallocate budget previously used to support a legacy network toward new IoT initiatives.

• Optimization of IT resources: Many solutions providers offer “touchless” or “zero-touch” onboarding and provisioning, meaning SD-WAN hardware comes preconfigured with deployment settings. This automates and simplifies the connection of all devices, including IoT devices, as well as the management of functions like access control, device security, and networking. Retailers can complete both initial installation and future upgrades, like scaling to a new site, quickly and cost-effectively — even if IT resources are tight. For retailers whose IT departments are stretched (or for those who wish to pass network management to someone else entirely), fully managed solutions remove the hands-on work, so IT staff can focus their attention elsewhere.

With SD-WAN as a secure, reliable networking solution, retailers may be better positioned to add more IoT applications, such as:

• Smart shelving: Shelves with weight sensors can detect when supply runs low and alert staff to restock, so shelves are never empty; retailers also can make smarter restocking decisions by automatically tracking in-store inventory. Shelves outfitted with electronic price tags allow retailers to dynamically update pricing to move low-selling items or match a competitor. Shelves with motion sensors can detect a customer’s approach and trigger digital signage promotions.
   
• People counting: Technologies and cameras that measure foot traffic and detect shopper entry and exit help retailers manage occupancy levels within a store, monitor for theft, and direct staff where they’re needed most. Counting systems paired with data analytics can help retailers determine the right staffing levels over time depending on times of day or year, saving costs by scheduling fewer people during slow times. Sensors that detect dwell time and facial recognition cameras can reveal the effectiveness of in-store displays, and the demographics of the customers who purchase the display.
   
• Augmented reality (AR) mirrors: AR mirrors allow customers to “try on” makeup, jewelry, or clothing and see how it looks on them without putting anything on their bodies. Dressing room mirrors can function as a touch screen as well as a mirror, so customers can browse similar styles, request garments in different colors from staff, or see suggested accessories.
   
• Cashierless/unattended payments: Retailers can deploy smart self-checkout carts that use artificial intelligence (AI), sensors, and image recognition technology. Customers select their items, scan the barcode and pay the cart directly — no lines, no registers. Apart from carts, automated checkout systems like those in Amazon Go stores read RFID tags on items as customers leave the store and automatically charge a customer’s payment app.
   
• Next-generation customer engagement and loyalty programs: Platforms that combine AI, analytics, location tracking, demographic segmentation, and more help retailers deliver personalized offers and content to customers based on their behavior, as well as create loyalty programs customized to shopper preferences.
   
• Robots: Autonomous mobile robots within a warehouse reduce labor costs and improve order fulfillment, speed, and accuracy. Robots that roam store floors can alert shoppers of potential slip-and-fall hazards (e.g., spilled milk in aisle 4) as well as clean floors and stock shelves.

How retailers can deploy — and are deploying — IoT is nearly limitless. Fortunately, the barriers they face in expanding their IoT environments are not. Replacing legacy networks with SD-WAN offers a way to simplify, secure, and scale network connectivity while reducing operating expenses and managing IT resources — helping retailers reach the next level in their IoT journey.

About The Author

John Tait is Global Managing Director of TNS’ Payments Market business. He is responsible for identifying and driving growth across the Americas, Europe, and Asia Pacific regions, and is focused on meeting the unique requirements of TNS’ customers.