Online retail was a revolution… now IoT, AI, and AR collide in Smart Retail solutions


The online revolution for retail continues to roll, with big-box retailers who fail to adapt falling by the way-side. You’ve read plenty of stories of this trend coming and dominating. We are reaching now the part of that story where the once novel becomes standard. The biggest downside for consumers making an online purchase – not being able to see, touch, feel, try-on – remains the most important reason for retailers to retain a presence in the physical world in the form of a storefront. There are now new trends in retail technology that are helping retailers better integrate customer physical and online experiences, or, in some cases, overcome the physical limitation completely by using augmented reality.

This second wave of retail’s Internet revolution is not as directly obvious a revolution as was online retail’s effect in completely changing the way that people make purchases. While these new tech trends – the Internet of Things (IoT), Artificial Intelligence (AI), augmented reality (AR), and, in a supporting role, cloud computing – will continue to contribute their own individual effects on the industry, it is the combination of technologies that will be truly revolutionary. The effect is not only about the combination, but more importantly about how each piece builds upon and magnifies each other.

AI and AR Building on IoT

AR holds a lot of promise, as you have read, in terms of helping consumers “try on” in their current reality the product they are shopping for, before making the decision and investment to buy, ship, set up, etc. You’ve probably seen a demonstration of a buyer using a cell phone camera and display at home to virtualize a new piece of furniture, right there in front of them. This is the “augment” to reality that really helps the buyer’s decision-making process. Using AR in this way helps to reduce improper sizing, color choice, etc., ultimately increasing customer satisfaction and reducing returns. The trick to AR is its base in “reality”, which requires an environmental understanding, and thus will be increasingly supported by incorporating data from “the edge” including real-time location, sensing, and monitoring information delivered to the mobile or cloud application via a low power wireless IoT infrastructure.

AI, as you have also read, holds a lot of potential to shape the consumer’s buying experience and ultimately increase amount of dollars spent. The data being fed into AI (demographics, activity, location, etc.) is key to the system’s learning and success in predicting future behavior, needs and wants. Much of this data today is gleamed from online activity (websites visited, mobile app usage, social media profiles, etc.), but in the future similar information will come from consumer behavior in the physical world via IoT sensor data. Just like with AR, adding IoT data to the mix of big data inputs enables AI to have an even more meaningful impact on the consumer experience.

Imagine, if you will, a retail scenario where a customer walks into a clothing store. The retailer is able to immediately identify that this is a repeat customer (via a mobile loyalty/couponing application and cell phone Bluetooth) and can track, for example, that the customer picks up a shirt of a known brand, size, and color (via Bluetooth beacons on clothing for asset tracking, inventory management, and theft prevention), takes the shirt to a fitting room (indoor location tracking), and then returns the shirt to the rack. Then perhaps they choose a different size/color/brand and do it again… All of this real-world data is fed into an AI application where it combines with online activity profiles to open up a new world of customer insight, preferences, and future promotion opportunities. Picture offering the exiting customer a coupon to return and purchase a left behind item with maybe a discount while possibly showing them a picture of themselves “wearing” the item or a color variant that was not available in the store but that AI indicates might have been their preference.

This is how AI and AR applications in the cloud, necessarily supported by increasing amounts of physical IoT data from the edge, will lead the next revolution in retail – both allowing customers to “test drive” products in their local environments more effectively before purchasing, and enabling retailers to tie customer in-store behavior to online behavior. Regardless of where a purchase is ultimately made the brand experience is improved through more focused targeting based on customer preferences, desires, and behavior. These improved, data-backed insights are made possible with IoT by the integration of that edge data, whether that ‘edge’ is in the home or a retail storefront.

This is the next retail technology revolution. To find out more come join Rigado and Arrow Electronics for two special upcoming events in New York. Rigado’s Smart Retail technology will be on display with our partners Arrow and Wachter in booth #2151 at the National Retail Federation show (NRF 2019: Retail’s Big Show – the world’s largest retail conference and expo) January 13th thru 15th. We will also have a demonstration going on simultaneously at Microsoft’s IoT in Action co-located show nearby at SIR Stage37 (January 14th). We hope you will join us for one of these great events to learn more about the future of IoT in retail.