Digitisation is a threat to brick-and-mortar retailers
Fort Lauderdale, Florida-based SATO Global Solutions (SGS) develops comprehensive solutions based on the Internet of Things (IoT) that address the needs of businesses by unleashing the power of their data. As an innovation integrator, it combines technologies, hardware and applications that connect people and assets through data to make decisions that maximise value across businesses. Keith Sherry, chief operating officer (COO) of the 75-year-old company, speaks to Fibre2Fashion about the benefits of radio frequency identification (RFID) tags.
Please tell us briefly about your company's background.
SATO Global Solutions (SGS), a subsidiary of SATO Holdings Corporation launched in 1940, develops comprehensive IoT solutions for modern retailers. SGS combines IoT technologies, hardware and applications that connect people and assets through data, helping retailers improve operational business performance and the consumer experience. Building on SATO's history, global reach and locations across 25 countries, SGS is focused on integrating emerging technologies to create innovative IoT solutions.
Please elaborate on Acuitas Digital Alliance.
Launched in January 2016, the Acuitas Digital Alliance brings together like-minded technology innovators including SATO Global Solutions, BT, Intel, RetailNext, NexGen Packaging and Valmarc Corporation. This team collectively looks at innovative ways to use technology within the store and across the entire supply chain. Its first deliverable, IoT-driven software platform helps retailers bring the digital experience into the physical store by connecting and serving up information for shoppers, associates and managers.
What are the benefits of IoT solutions for apparel and footwear retailers?
A recent Retail Systems Research study found that 70 per cent of retailers surveyed, including apparel and footwear retailers, felt that IoT would drastically change the way they do business in the next three years.
At SATO, IoT tools are used to create connection points between the inventory, store associates and shoppers. With an IoT strategy in a fashion store, for example, retailers can use a network of sensors and RFID to gain unprecedented visibility into inventory movement, customer behaviours and store operations in near real time. This access to insights can empower store associates and enhance the in-store experience and raise store footfall and brand loyalty.
What are the challenges in getting people to adapt to newer technologies?
Traditionally, deploying IoT in stores was complex, cumbersome and expensive because it required the right mix of hardware, software and networks, while ensuring that each piece was highly scalable, rapidly deployable and easily adaptable. While today's innovations have dramatically simplified the process, many retailers are still stuck in the mindset of complexity and expense. In fact, IoT can be deployed in stages, using small success to sell in the idea of larger deployments to skeptical managers.
What are the latest trends and innovations ruling the apparel tag and labels market?
RFID tags are being adopted very quickly as a viable, large scale labelling option. The low price and high level of benefits have made RFID the clear choice over low-tech barcodes.
For example, inexpensive RFID tags placed on retail products, combined with a network of sensors, can help optimise inventory both in the back room and on the floor. The sensors can identify location data on inventory and share real-time, accurate location and status information about every single item of inventory - including purchased items, inventory currently in dressing rooms, misplaced items, or alerts that a store display is low or empty - with store associates.
In addition to enabling store associates to make real-time decisions based on the data at hand, retailers can leverage this RFID data to gain insights into customer behaviours, preferences and employee productivity.
Tell us about your comprehensive solution.
The SATO Global Solutions VISION Retail Platform is designed to increase inventory visibility, improve workforce efficiencies and create a personalised shopping experience by leveraging the power of IoT. The platform uses RFID to give stores a complete overview of a products lifecycle within the store, as well as customer behaviour based on product lifecycle. For example, the platform provides insights into what customers are purchasing, but also what they are purchasing and when, what they are taking into the dressing rooms and ultimately not purchasing and how responsive a store's workforce is to customer requests.
The platform seamlessly connects various inputs such as tags, sensors, gateways and videos to continuously deliver actionable insight on all aspects of inventory management and omni-channel customer engagement. Additionally, it is designed to be expandable, sustainable and scalable, simplifying digital implementation and creating a foundation for future growth.
Are your IoT solutions just for products in-store? Do you plan to integrate online too?
While the VISION Retail Platform is an in-store solution, it provides a foundation for retailers to continually expand and easily meet the needs of the store of the future. This includes seamless integration of technologies to create a true omni-channel experience regardless of where the shopper is in the customer journey. For example, retailers can integrate the platform with technologies that enable customers to view available inventory online and potentially provide the option to purchase online and pick up in store.
How does your software foster speed in product lifecycle management?
The Vision Retail platform increases efficiency and stock accuracy. For example, if a shopper picks up a shirt, carries it elsewhere in the store, and then abandons it, a sales associate will be notified of the items location, reducing misplaced inventory and increasing on-shelf availability and workforce efficiency. And if the last on-display garment is sold, the application will notify the sales associate in real-time that the item needs to be replenished, to ensure that the right merchandise mix is always displayed.
Additionally, the real-time data collected allows retailers to understand the behaviour of customers in the store by providing unprecedented insights into what customers are buying, the time periods footfall is the highest, the customer journey within the store, and merchandising effectiveness, enabling retailers to make more accurate inventory stocking decisions without the worry of overstocking.
For markets with and without technological know-how, what strategies help SGS make headway?
Our platform can be implemented on a current IT network or on a stand-alone network. Because it is a plug and play solution, limited IT involvement from an organisation is needed and no additional servers or data-centre applications need to be purchased. Additionally, the system is fully supported by SGS - we provide the expertise and guidance around the platform. Therefore, there's no need for on-site experts in IoT tech.
How do you meet the needs of modern business, particularly apparel segment?
The secret of successful retailing in the digital age is to create digitally-enabled connection points across business, consumer and employee processes. For example, technologies like RFID, smart labels and sensors play a role in helping manage inventory. They feed data into a centralised platform and you know if an item exists and how many of it you have in a warehouse or within the retail store.
One component of our Vision Retail Platform, the sales associate application, uses these technologies to give sales associates inventory visibility within their store and a list of concrete tasks that maintain items on the shelves and reduce out-of-stocks. Another component of the platform is the smart fitting room application, which allows customers to view in-store inventory while in the dressing room, as well an option to alert an associate's mobile device when, for example, a different colour or size is needed. The store associate receives the alert and can instantly see where the item is located, enabling them to deliver the right item to the fitting room within minutes.
Additionally, the platform arms associates with customer behaviour data. Insights into this behaviour can help inform associate workflows, optimise operations and create a better shopper experience both online and in stores.
How do you upgrade the solutions with technology changes?
We are constantly advancing our software and work closely with retailers to easily push out new updates. Our platform can be adapted as new on-site technologies come to market, enabling retailers to integrate additional components at any time. Additionally, we are not just a solutions provider but also a retail partner. We don't believe there should ever be a siloed approach to enhance an in-store experience. We take a consultative approach to ensure that retailers using our platform are always adapting and growing as the industry changes.
What are the advantages and disadvantages of Vision Retail Platform?
Our platform gives retailers unprecedented insights into store performance, inventory management and customer behaviour. The retailer's investment in implementing and operating the platform pays off in an increase in stock turnover, increased engagement of the store's workforce in direct revenue-generating activities and in expanding the addressable customer base beyond the shopper traffic.
While these insights can be the driving force behind enhancing the in-store experience, they can also expose retailers to their current shortfalls. When retailers implement the solutions, they must be prepared to gain these insights - both good and bad - and use them as a starting point to reap the benefits.
What are the opportunities and challenges for your business?
Retailers are inundated with data. Our platform cuts through the noise by giving them actionable data that triggers relevant events - telling associates in the store what to do and when. For example, data collected within retailers' smart fitting rooms can give associates information about the customers during a critical point of purchase helping them close the sale.
Additionally, the platform is designed to integrate seamlessly with emerging technologies enabling retailers to meet the needs of future shoppers. The biggest challenge in our industry is keeping brick-and-mortar retailers relevant in the digital age.
What, according to you, are the top five disruptors that IoT is set to bring in in the textile, fashion and retail industries?
1) Augmented reality (AR)
2) Artificial intelligence (AI), including computer vision and machine learning
3) Sensor networks (beacons, RFID)
4) Store infrastructure and connectivity
5) Technology integration to deliver actionable insights in-store (RR)