Grocers Can Use ‘Internet of Things’ to Their Advantage

For those who’ve wondered what the Internet of Things (IoT) is, let alone how they can leverage it to benefit their business, the June 9 FMI Connect Learning Lounge presentation "The Internet of Things," held on the exhibit floor, was a must-attend event.

Moderated by John Lauderbach, VP, Internet Technology at Wellesley Hills, Mass.-based Roche Bros. Inc., the panel of speakers consisted of Donovan Follette, solution architect Azure Center of Excellence, Microsoft Corp.; Kaley Parkinson, director, applied technology sales, Rehrig Pacific Co.; and Michael Higgins, SVP marketing, strategic planning and business development, Hussmann Corp.

First off, as Lauderbach explained, the term isn't a new one, having been coined in 1999, but it’s recently come to the forefront as more businesses grasp the "limitless potential" of every item having a unique identifier, with the capability of transferring data over a network instantly. Although security and privacy concerns exist, IoT is here to stay: 26 billion intelligent electronic devices are projected by 2020, meaning an even more digitally connected world.

Parkinson, who described his company as "a ubiquitous producer of transportation items," noted that Rehrig Pacific's mission in regard to IoT was "to bring voice to products that are already there," so as to "touch the customer at the zero moment of decision." His advice to his company’s customers was to “examine your infrastructure and go from there,” working backwards from what’s already in place.

Follette stressed to attendees that IoT is "the Internet of your things," offering the example of getting store telemetry data into the cloud and onto a platform to move a particular business strategy forward.

Higgins said that food retailers could harness IoT to increase sales, lower costs and boost shopper loyalty, while Parkinson insisted, "You do not have to be afraid of this," pointing out that adoption didn't have to be expensive if companies took advantage of their existing infrastructure.

Follette explained that IoT might play out in grocery stores in terms of "command and control," with devices that could be turned on or off or modified automatically.

According to Higgins, there’s an "early-mover advantage" to adoption, as enough pieces are currently in place to deliver value to companies, and urged food retailers not to be overwhelmed by IoT's potentially "tremendous amount of data," but to use what applies to their specific businesses.

When asked by an audience member how one was to tell the difference between data and "noise," he replied, "If data is important to you, it's not noise; it's how you use it." Parkinson weighed in that companies knew what data they wanted to use – it was just a matter of finding the right tool to access it. "If we could tap into the potential of the smartphone," he added, that would be "the Holy Grail of connection." Parkinson wryly noted that there were currently 7 billion people in the world and 5 billion smartphones, but only 4 billion toothbrushes.

The panel agreed that grocers, even "little guys," could particularly benefit from IoT in such areas as shopper engagement and supply chain. Parkinson offered the example of Pepsi working with a small food retailer to develop a digital coupon that customers could access through the retailer’s loyalty program, using their smartphones to scan product packaging. Such programs enabled smaller grocers "to leverage the same stuff the big guys are doing and seeing benefits," further noting that the smaller players were compelled to adopt this approach, since it was ultimately cheaper and enabled them to compete.

Most important of all, perhaps, is how shoppers will benefit. Higgins insisted that IoT could enhance the shopping experience, allowing food retailers to deliver consistency, while Parkinson foresaw a return in a sense to the neighborhood market of the past, offering personalized service, admittedly in a different way, but with the same result. Follette added that with IoT, everything works so that store customers aren't affected by service on machines or breakdowns, leading to a seamless experience.

In the end, however, all sides – retailers, vender partners and consumers – should benefit from IoT. "If it’s not win-win-win, it wouldn't work," affirmed Parkinson. "It has to be win-win-win; otherwise it's just an extra cost."

In a climate of changing demographics, proliferating technology and the lowering of fear barriers, Parkinson urged grocers to embrace IoT. He asserted that despite general worries about privacy, shoppers were willing to share data with food retails. "Hear what they have to say, or somebody else will," he warned. Follette offered similar advice even more succinctly: "Don't be afraid to start."