CONNECTED RETAIL

THE BUSINESS CASE

FOR IOT
Oliver Guy
Retail Industry Director
Software AG
A BUSINESS CASE FOR IOT
TODAY
• The Internet of Things
• Experimentation and the Business Case
• IoT Maturity
• IoT Innovation
• Bringing it all Together

3 |
A BUSINESS CASE FOR IOT
TODAY
• The Internet of Things
• Experimentation and the Business Case
• IoT Maturity
• IoT Innovation
• Bringing it all Together

4 |
INTERNET of THINGS
MAY BE BIGGER
THAN THE INTERNET ITSELF

5 |
THE INTERNET OF THINGS IN RETAIL
POTENTIAL VALUE

The application of IoT within

retail has a potential impact of
$410Bn - $1.2Tn
per year by 2025.
Source: McKinsey – “Unlocking the potential of the Internet of Things”
http://www.mckinsey.com/business-functions/business-technology/our-insights/the-internet-of-things-the-value-of-digitizing-the-
6 | physical-world
RETAILERS AGREE
IOT WILL BE HUGE

IoT Perceptions In Retail

Strongly Agree Agree Neutral Disagree Strongly Disagree
80%
The Internet of Things will drastically change
the way companies do business in the next 3 42% 38% 16% 3%
2%
years.
The Internet of Things will have a dramatic
impact on consumer products in the next 3 39% 41% 16%4%
1%
years.
My company has no idea how the Internet of
Things will impact our own operations in the 13% 21% 22% 30% 14%
next 3 years.

Source: The Internet Of Things In Retail:Great Expectations

7 | RSR Benchmark Report, August 2015
CONNECTED RETAIL
WHAT IS IT?
Connected Retail
combines new IoT initiatives with the
enterprise to ensure data and actionable
insights are fully utilized across the
business.
Connected Retail will transform retail
environments for the digital age.

8 |
A BUSINESS CASE FOR IOT
TODAY
• The Internet of Things
• Experimentation and the Business Case
• IoT Maturity
• IoT Innovation
• Bringing it all Together

9 |
IOT IN RETAIL
EXPERIMENTATION

Electronic Shelf Edge Labels Smart Mirrors RFID Tags

Beacons Smart Badges Location Analytics

10 | © 2015 Software AG. All rights reserved.

TOP 3 IOT ORGANISATIONAL INHIBITORS
THE NEED TO SHOW VALUE
Business leadership doesn’t understand the
benefits of Internet of Things

Overall Capital Requirements – we never

even get to the subject of ROI

We have not identified a business case to support specific

use-cases for the Internet of Things

The technology supporting the Internet of Things

is not mature enough for our business to invest

Our existing infrastructure is not capable

of supporting Internet of Things

We don’t have the skills to manage the analytics and

predictive modelling required to take advantage of IoT data

Our IT team does not have the capacity to take on

Internet of Things projects

BUSINESS CASE AND ROI APPEARS TO BE AN ISSUE

Source: The Internet Of Things In Retail:Great Expectations
11 | RSR Benchmark Report, August 2015
JUSTIFYING A ROLLOUT
BUILDING A BUSINESS CASE

Electronic Shelf Edge Labels

Staff Efficiency Gains

Error Reduction

Reduced Paper & Print Costs

12 | © 2015 Software AG. All rights reserved.

Business Case for IoT
?
DRIVING REAL VALUE
THE CASE FOR CONNECTED RETAIL

Price and Promotion

Optimization

Electronic Shelf Edge Labels

In-Store Inventory

Real-Time POS Streaming

13 | © 2015 Software AG. All rights reserved.

DRIVING REAL VALUE
THE CASE FOR CONNECTED RETAIL

Price and Promotion

Optimization
Connected Retail

Electronic Shelf Edge Labels Real-Time

Offer Alignment
1. Correlate POS data & inventory In-Store Inventory
2. Model future near-term performance

3. Adjust offer

4. Roll-out adjusted offer to shelves & POS

Real-Time POS Streaming

14 | © 2015 Software AG. All rights reserved.

JUSTIFYING A ROLLOUT
BUILDING A BUSINESS CASE

Staff Efficiency Gains

Electronic Shelf Edge Labels Error Reduction

+ Reduced Paper & Print Costs
Real-Time POS Streaming
Real-Time
+ = Offer Alignment = Increased Sales

Price and Promotion Optimization Increase Promotional Uptake /

Conversion
+ Reduced Stock-Outs
In-Store Inventory
Increased Margin

15 | © 2015 Software AG. All rights reserved.

DRIVING REAL VALUE
THE CASE FOR CONNECTED RETAIL

Automate
Increasing Value & ROI

Automatically take
‘Corrective Actions’

‘Actionability’
Alert and suggest actions
to improve and correct
Pan-Sensor Visibility
Make Sense of Multitude of Inputs Leverage the
Sense
‘Retail Moment’
Disparate Sensors and Initiatives

Time

16 | © 2015 Software AG. All rights reserved.

THE INTERNET OF THINGS IN RETAIL
THE RETAIL MOMENT

The impact of digital business

and the IoT will require
advanced analytics to support
real-time decision making to
take advantage of momentary
business opportunities.
Source: Gartner – “Unlocking the potential of the Internet of Things”
http://www.gartner.com/newsroom/id/3093819
17 |
A BUSINESS CASE FOR IOT
TODAY
• The Internet of Things
• Experimentation and the Business Case
• IoT Maturity
• IoT Innovation
• Bringing it all Together

18 |
IOT INNOVATION IN
RETAIL
POWERED BY

19 |
 Retail Specific Solutions Technology Partner Investment

Serious About Retail

Retail Insight and Thought

Leadership Strategic Partnerships
20 |
SOFTWARE AG
INNOVATING WITH IOT
Location Analytics Location Based Marketing
Free
SALE
50%
Admit
25% one

Real-Time Inventory Visibility Smart Store Monitoring

21 |
LOCATION ANALYTICS
HISTORICAL DEVICE LOCATIONS

Hotspots of customer
crowding

• Highlight problems

• Understand passage

• Understand impact of
promotions and
respond

22 |
LOCATION BASED MARKETING
SPECIAL OFFER

Special offer for

Mr Clark
Free headphones
with your new

iPad

23 |
REAL-TIME INVENTORY
UP-TO-DATE FIGURES

Real-Time Inventory
Up-to-date inventory figures
in spite of delays caused by
processing of the ERP
systems

24 |
SMART STORE MONITORING IN ACTION
STORE OVERVIEW

Graphical store overview

with overlays of dwell time,
conversion and flow rates

Live, Historic, Predicted

Shading indicates high dwell

times

Red indicates potential

problems

25 |
SMART STORE MONITORING IN ACTION
TASK ASSIGNMENT

Tasks assigned to
staff based on need
and availability

26 |
A BUSINESS CASE FOR IOT
TODAY
• The Internet of Things
• Experimentation and the Business Case
• IoT Maturity
• IoT Innovation
• Bringing it all Together

27 |
CONNECTED RETAIL
BRINGING IT ALL TOGETHER

https://www.youtube.com/watch?v=6OmhBclaOys
28 |
LEVERAGING THE DIGITAL BUSINESS PLATFORM IN RETAIL
A SAMPLE OF CUSTOMERS

DIGITAL BUSINESS PLATFORM

29 |
SOFTWARE AG
WHAT IT MEANS TO YOU

Track record Stability Global leader in process and data

orchestration and real-time analytics

In Retail for your future Independent and agnostic

investments
used by over Support for industry standards
retailers
50 globally Support Extensive partner network
Global and Regional competency centres
for your 2,200 expert consultants
initiatives across 70 countries

30 |
SUMMARY & ADVICE

IoT will revolutionize the retail industry Elevate the IoT conversation beyond
1 5 individual initiatives

Taken in isolation, IoT initiatives are Consider how IT platforms and digital
2 hard to justify 6 transformation support the IoT business case

Combining IoT with established Think about how IoT initiatives can squeeze
3 enterprise IT drives new opportunities 7 even more value out of existing investments

“Connected Retail” is the name When looking at IoT related

4 we give to this new paradigm 8 infrastructure, make sure it can scale

31 |
 www.SoftwareAG.com/ConnectedRetail

32 |