Understanding IoT Security and Its Importance in Retail

Posted on July 16, 2024 by Kopius

Digital technology is revolutionizing how retail businesses operate and interact with their customers. The Internet of Things (IoT) plays a key role in the industry’s evolution, helping stores gather valuable customer data to supercharge decision-making and deliver enhanced shopping experiences.

Internet of Things security is crucial to leveraging advanced digital technologies successfully. Understanding the importance of robust IoT security is key to ensuring your retail business is ready to innovate, adapt, and meet modern consumer demands without compromising confidential data.

Learn more about how IoT security works and why it’s so pivotal in the retail sector.

What Is IoT Security in Retail?

IoT security’s key elements in the retail industry include:

Data protection: Customer and business data collected by IoT devices requires robust security solutions, like encryptions and advanced access controls to ensure compliance and privacy.
Device security: An important element of IoT security is protecting individual IoT devices with routine software updates and authentication mechanisms. This helps prevent unauthorized access and safeguard data integrity.
Network security: The network infrastructure used in connecting IoT devices requires firewalls, intrusion detection systems, and secure communication protocols to combat data breaches.
Physical security: IoT security also employs physical protections, like surveillance cameras, access control systems, and tamper seals, to combat theft and tampering.
Vendor management: Third-party vendors that retail businesses work with through IoT devices must meet strict security standards to mitigate potential risks.
Team education and training: Cybersecurity and physical security awareness training ensures your team keeps devices secure and responds to incidents effectively. Human error is to blame for at least 88% of data breaches, so education on IoT cybersecurity best practices is essential.

Any organization that leverages interconnected technologies that collect, store, share, and manage personal or payment information — especially from customers — must prioritize robust security measures. IoT-enabled retail businesses need strong protections for their networks and physical devices to combat potential threats that can wreak havoc on their operations, reputation, and bottom line.

Robust cybersecurity in the retail industry is essential in today’s high-risk digital landscape, especially as cyber threats grow rapidly and more companies rely on IoT than ever before.

IoT Security Examples for the Retail Industry

Some common IoT devices used for retail security include:

Surveillance cameras: IoT-enabled closed-circuit television security systems can enhance retail store security through round-the-clock surveillance.
Sensors: Specialized IoT sensors can monitor environmental changes, detect issues, and share alerts about potential intruders in a retail or digital space.
Radio-frequency identification (RFID) tags and readers: These digital technologies can enhance how retailers track and manage their inventory and assets. They can boost anti-theft measures through real-time location tracking and identification.
Smart locks: Smart locks and IoT-enabled access control solutions allow retail businesses to oversee entry into different areas of their store, including restricted zones.
Point-of-sale (POS) systems: Retailers also use IoT-enabled POS terminals to securely process customer transactions, track sales data, and improve accurate inventory management.

Why Is Retail IoT Security So Important?

Security in IoT is critical for keeping customer data protected and private. IoT systems in retail environments collect sensitive information about your shoppers, including personal insights, purchase histories, behavioral data, and payment details.

Without adequate security measures, the data from IoT devices, including surveillance cameras and sensors, may be vulnerable to cybercriminals looking to capitalize on system vulnerabilities.

Retailers need a deep understanding of their IoT and security issues. This ensures they take the necessary measures to combat unauthorized access and data breaches that can lead to theft, misuse, or fraud. Protecting customer privacy should always be a top priority.

In addition to safeguarding your customers’ information, IoT security is vital for supporting smooth business operations. Protecting your critical infrastructure against potential attacks helps prevent disruptions, financial losses, and reputational damage due to incidents.

Establishing strong security measures helps retail businesses safeguard their daily workflows and processes. They can also use IoT insights to drive efficiency, reduce downtime, and ultimately improve performance.

Retailers need a secure, agile, and scalable IoT ecosystem to adapt to the ever-changing market. That way, they can maintain operational efficiency and deliver the most intuitive and satisfying customer experiences.

The Benefits of Robust IoT Data Security in Retail

Retail businesses can reap many benefits from prioritizing a strong security posture to safeguard their data and private information. Keeping your IoT systems secure is essential to your company’s longevity and bottom line. Explore some of the key advantages below.

1. Data Breach and Cyberattack Prevention

IoT networks in the retail industry store sensitive data that cybercriminals want to access and exploit. Businesses need strong monitoring mechanisms, encryption protocols, and access controls to effectively combat data breaches, theft, and cyberattacks. These incidents can devastate retail operations, so a proactive approach to IoT security is essential for identifying and mitigating potential risks.

Rigorous data security measures are also key to protecting your retail business’s intellectual property. IoT systems often store confidential data relating to products, services, and company operations. Guarding these insights with proper cybersecurity measures is key to maintaining a competitive edge and capitalizing on proprietary processes or solutions.

2. Brand Reputation Protection

Demonstrating your retail business’s commitment to data protection is essential for fostering customer trust. Robust IoT security is key to portraying your brand’s reputation as reliable and safe. If consumers feel confident that your company will protect their payment details and personal information, they will be more likely to engage with your business and make purchases. Your level of security directly impacts customer loyalty and satisfaction, and a good reputation supports greater retention and growth.

If a data breach or cyberattack occurs, a powerful response plan effectively minimizes the impact on your customers and brand. Keeping your customers’ private data safe through robust security measures is integral to managing your brand’s trustworthiness.

3. Operational Continuity

Another benefit of robust IoT security is ensuring continued operations. Cyberattacks and data breaches can result in significant disruptions, leading to:

Revenue loss.
System failures.
Downtime.
Data loss.
Reputational damage.
Customer dissatisfaction.

Everything from inventory management to POS transactions can encounter disturbances from a security incident, leading to friction and negative experiences for your shoppers. Consumers demand uninterrupted service and reliable operations. Secure IoT networks and devices are necessary to avoid these issues, supporting productivity, efficiency, and continued operations.

4. Competitive Advantage

Retail businesses can also enjoy a competitive advantage by implementing strong IoT security measures. By establishing a reputation for prioritizing data security, companies can enhance their brand credibility and attract security-conscious consumers.

Today’s shoppers want to know they can trust the retailers they buy from, and maintaining a secure digital environment is key to demonstrating your commitment to protecting customer data. Investing in IoT security can give you an edge over the competition by delivering seamless customer experiences and benefiting your brand reputation.

Secure IoT systems also support enhanced data-backed decision-making to grow your business.

5. Cost Savings

The consequences of a data breach or cyberattack can be expensive. Regulatory fines, legal fees, theft, and data recovery can add up quickly. In 2023, the average cost of a data breach in the United States was a whopping $9.48 million, which can put a retailer out of business. Robust IoT data security measures can save costs and protect a company’s bottom line.

Retail businesses need strong protections to support long-term operational efficiency and business growth. Fostering a reputation for strong security and avoiding security incidents can also help companies protect their brand value and equity, reducing the costs of customer acquisition, retention, and even marketing.

Internet of Things Security Challenges for Retailers

Explore the key challenges of IoT security for retail businesses:

Large attack surface: As companies introduce new digital technologies, Internet of Things device security is increasingly complicated by the growing attack surface. Cybercriminals have more entry points for potential attacks and data breaches, and retailers must implement greater defenses to combat the new vulnerabilities.
Legacy systems: Another common security hurdle for retail businesses is integrating IoT devices with legacy systems. Compatibility issues can pose a serious threat, as many older solutions do not feature adequate protections in today’s digital landscape. Finding ways to protect older systems with the latest security standards can be complicated, expensive, and time-consuming.
Supply chain risks: Third-party suppliers, partners, and vendors can introduce security risks throughout a retail business’s supply chain. Companies must find ways to secure their entire digital ecosystem and combat vulnerabilities, including devices, software, and services from outside organizations. Limited transparency and supply chain complexity can make tracking every component’s security posture difficult. Working with partners that prioritize robust IoT security is essential.
Standardization: There are no universal IoT security criteria for retailers to follow, making uniformity and standardization difficult. Ensuring consistent security practices across diverse IoT devices and networks can be challenging and lead to potential vulnerabilities.
Insider threats: Employee negligence or misconduct can be a huge IoT security challenge for retail businesses. Comprehensive training, education, and monitoring can help companies manage insider threats and ensure their team members do not intentionally or accidentally compromise IoT data.
Physical security: Safeguarding physical IoT devices and infrastructure from unauthorized access, theft, and vandalism can be another major challenge for retailers. Proper surveillance and access control systems are necessary for ensuring physical security.

Compliance Standards for IoT Security in Retail

These IoT and security compliance requirements help ensure ethical data handling practices:

Payment Card Industry Data Security Standard (PCI DSS): The PCI DSS outlines requirements for how cardholder data is collected, stored, and transmitted by a company’s IoT devices, such as POS terminals.
National Institute of Standards and Technology (NIST) cybersecurity framework: Retailers must secure IoT devices and networks according to NIST guidelines to ensure the strongest cybersecurity posture.
Federal Trade Commission (FTC) guidelines: The FTC outlines guidance for securing a business’s IoT system.

Retailers must also follow industry- and state-specific regulations, such as the California Consumer Privacy Act (CCPA). Compliance is necessary to avoid fines and reputational damage while demonstrating a company’s commitment to security to potential customers and partners. Meeting these standards helps retailers ensure they maintain a secure IoT environment.

Best Practices for Securing Retail IoT Devices

A few key strategies and best practices can help retail businesses maintain ongoing IoT security and protect their data:

1. Carry Out Regular Testing

Retailers should regularly test their IoT systems to identify possible vulnerabilities. Taking a proactive risk mitigation approach is key to maintaining the most secure network, and testing is an essential part of tackling potential dangers before they become larger and more serious threats.

2. Segment Your IoT Network

A top tip for ensuring optimal IoT network security is segmenting your network. By splitting up the system into smaller networks, you can gain greater insight into each segment, allowing your team to pinpoint security threats more efficiently than looking at the network as a whole.

3. Update Systems Often

Regularly patching and updating your network is essential for ongoing IoT device security. Cybercriminals and hackers are continuously searching for new vulnerabilities on your attack surface. Routine updates will help your systems remain protected against threats and ensure you have the latest security measures in place.

4. Implement Advanced Access Management

Retailers should prioritize unauthorized access prevention measures to ensure IoT data is safe from cybercriminals and hackers. Advanced controls and multifactor authentication can help businesses protect their systems, safeguarding confidential business insights and sensitive customer information.

5. Maintain Ongoing Monitoring

Monitoring every facet of your IoT network will help your business manage and mitigate security risks. Retailers need greater insight and visibility of their attack surface to ensure secure devices and uncompromised data.

6. Prioritize Comprehensive Team Training

Retail businesses can maximize IoT security by informing employees of potential threats and training them on the best practices. Continuous education and training update team members on securely using IoT devices, ensuring ongoing data protection.

Starting Your IoT Security Journey

The best way to ensure IoT security is to partner with an experienced provider who understands the best practices for protecting your environment against threats and vulnerabilities. With the JumpStart Retail partnership program from Kopius, your business can leverage IoT to foster tech-enabled innovation, elevate customer engagement, and create more satisfying digital and in-store experiences.

We designed our solution with robust IoT security to protect your business’s sensitive information and combat data breaches. Our experts will work with your team to determine the best measures for safeguarding your digital and physical environment from unauthorized access.

We make securing your data simple. Browse some of our case studies to see how we’ve empowered businesses to take a more innovative approach to data security.

JumpStart Your Retail IoT Security Strategy With Kopius

Innovating your retail business to keep up with the competition and ensuring a robust cybersecurity posture is essential. Kopius makes it easy to JumpStart digital technology and data success. Our data and AI ideation and prioritization program fast-tracks and enhances your company’s results.

We’ll help you boost customer satisfaction through an informed, data-driven approach. Our tech team’s extensive expertise allows us to supercharge IoT security solutions for retailers worldwide. We’ll tailor your program to your business’s unique needs and industry requirements, helping you improve customer experiences and benefiting your bottom line.

Contact our experts to partner with Kopius and JumpStart your business today.

Related Services:

Additional Resources:

Experiential Retail and Immersive Shopping

Posted on May 20, 2024 by Kopius

At a time when customers can make almost any purchase online, many retailers are rethinking the way they approach in-store shopping. Experiential retail is a powerful concept that can turn a brick-and-mortar storefront from a place to purchase items to a place to engage with your brand in innovative, revolutionary ways. It’s all about turning shopping from an everyday occurrence into a memorable experience.

This tactic has helped many retailers stand out from the pack and give customers a truly unique, powerful connection to the brand.

What Is Experiential Retail?

Experiential retail refers to a marketing strategy in which physical retail spaces provide experiences beyond traditional shopping. Some are fairly common, like access to knowledgeable associates and hands-on product testing. Others, such as in-store events, communal lounge areas, or art exhibits, are harder to find. Whatever it looks like, these experiences offer a unique form of engagement that draws people in for a reason other than the products.

Some examples of experiential shopping include the following:

Classes, workshops, and digital resources
Attractive spaces for photo ops
Lounges, cafes, and restaurants
Immersive digital displays
Art exhibitions or studio spaces
Celebrity interactions and endorsements
Community engagement, like fundraisers
Live events, such as concerts and launch parties
Assistance or tech support from informed associates
Access to new products or up-and-coming technology
Virtual reality (VR) or augmented reality (AR) installations

The Internet of Things (IoT) is a major driving force in experiential retail, facilitating new digital technologies. IoT refers to a myriad of connected devices, like sensors and displays. For instance, digital price tags could connect to your website to show the most updated pricing, while motion sensors might detect nearby customers and start playing a video. The impact IoT can have on retailers and customers is virtually endless – that’s why it matters and makes it so compelling!

As you can see, you can use an experiential retail strategy in many ways. The best approach usually depends on your product, audience, and goals. Some brands use interactive retail experiences to appeal to the younger crowd, while others focus on their audience’s interests or shopping habits. However you choose to use it, experiential retail design can drastically change your customers’ connection with your brand.

In my previous experience working with Microsoft Retail Stores, we developed a custom IoT agent to capture customer engagement & product interest. Utilizing the data, my team and I designed a “Retail Experience Dashboard” to help Microsoft make informed decisions around store layout and product placement.
Matt Wright, Principal Software Architect at Kopius

Experiential Retail vs. Traditional Retail

The biggest difference between traditional retail and experiential retail is the latter’s focus on engagement. Sales are no longer the biggest priority. Instead, the experience focuses on boosting engagement. It’s about creating a positive on-brand experience, building loyalty, and making strong connections with your customers.

For many brands, that includes facilitating close ties with the customer’s digital experience. The in-store experience should feel like it naturally builds upon online shopping, with a consistent and smooth transition between the two.

Why Is Experiential Retail So Important?

Experiential retail differentiates in-store shopping from the online experience. Nowadays, online shopping usually provides better availability, anytime-anywhere access, and a wealth of options. The in-store environment must stand out with value-added experiences that shoppers can’t get online.

Stores can have various goals for experiential retail, but these immersive shopping experiences are often used for the following:

Building loyalty: Giving customers a unique reason to stick with your brand can help build long-lasting loyalty. Connecting in-store opportunities with on-brand messaging builds powerful relationships.
Creating share-worthy content: Instagrammable stores are excellent for promoting user-generated content and organic social media interactions. This approach usually works best with gentle encouragement — never make a photo op or a hashtag feel forced.
Speaking to customers directly: Some brands use brick-and-mortar locations to learn from and engage with customers directly, through a more natural setting, rather than going through a third-party retailer.
Nurturing community engagement: Experiential retail fosters connections among people. The store supports togetherness and may even become a well-respected organization in the community.
Engaging the senses: Many brands benefit from giving customers a physical sensation, especially for items like food and beauty products. Experiential marketing provides a setting for people to get hands-on interactions with the product.
Helping customers try out the products: One of the biggest reasons people shop at a store is to get an in-person trial. Experiential retail can offer this benefit and go further with in-depth product demos or associate knowledge.

Experiential Retail and Shopping Trends

Many brands align experiential retail design with today’s shopping trends, such as omnichannel shopping and social media engagement. By understanding what drives your customers, you can appeal to their habits. For example, one of the top attributes that consumers look for in physical stores is the ability to use the retailer’s website or app to shop for products they want to find in-store. This integration between digital and physical shopping experiences is vital to many retailers’ experiential approaches.

Other popular trends include influencer marketing, AR experiences, and shopping through social media platforms — which is now the primary way Gen Z likes to discover new products. We designed a data and image processing platform for a teledentistry company that integrated into a modern mobile app. This allowed customers to take “selfies” and see what their smile would look like post-treatment. The end product boosted both customer engagement and conversion! Brands might hold meet-and-greets with influencers, introduce an AR try-on tool, or create share-worthy photo ops for social media. Experiential retail trends often align closely with more generalized shopping trends and the buying habits of a retailer’s customers.

Top Experiential Retail Examples

Many brands are pushing the envelope with interactive retail experiences that engage and delight customers. Here are a few examples of experiential retail stores making waves.

1. House of Vans

The retailer behind these iconic skate shoes has opened up several House of Vans locations in major cities, redefining what it means to be a beloved brand. Instead of a simple retail store, these industrial-looking locations function as venues for skating events, concerts, art installations, and classes. Each House of Vans embodies the culture of its city, and creativity is a key driver. These exciting, unique stores offer a place for the community that helps visitors dive deep into the Vans philosophy.

2. Glossier

Glossier sells beauty products and an Instagram-worthy shopping experience. If you walk into one of their stores, it might take you a minute to realize you’re in a retail space. Glossier focuses on the aesthetics of its spaces and considers the character of the locations it chooses. Its Los Angeles store, for instance, is inspired by old Hollywood. It has glamorous rooms for trying out products and lighting designed for taking selfies.

3. Nike Rise

Nike has fully embraced the idea of experiential retail with its Nike Rise stores. These locations offer a wide range of activities catered to sports fanatics and powered by impressive digital technology. You can find huge screens that span multiple floors with real-time sports moments and member achievements from Nike’s fitness apps. You can also head to Nike By You to customize sneakers and apparel.

With Nike Rise, digital integration is front and center. The locations incorporate strategies like online pickups, returns, and scanning products for more information.

How to Get Started With Experiential Retail

The starting point for experiential retail depends heavily on your business and goals. Working with an experienced digital solutions provider can help you get support every step of the way. The team at Kopius specializes in experience-focused digital products and implements high-impact technologies for retailers of all types and sizes.

We’ll leverage various technologies, including IoT devices, to craft a plan that’s right for your business and goals. Some software solutions, such as Azure IoT Hub and Power Apps, enable powerful functionality, while others, like Power BI and Azure SQL Database, help make the most of your data.

Whether we’re monitoring store traffic, creating interactive displays, or building immersive spaces, our experiential retail technology solutions allow retailers to connect with customers in an entirely new way.

JumpStart your Retail Experience with Kopius

Contact Us to Jumpstart Your Retail Technology Success

Moving forward, experiential shopping will be crucial to connecting to customers and providing a top-tier brand experience online and off. This powerful approach calls for expertise in many areas, from planning and strategy to insights into the customer experience. At Kopius, our nearshore team uses innovation and strategic technology to solve problems and navigate new frontiers. We can help you explore the potential of experiential marketing and revolutionize how you connect with your customers.

Experiential retail depends on the intersection of digital and physical touchpoints, and a seamless digital experience is essential. Whether you want to connect your app to the in-store experience, create an interactive installation, or tackle experiential marketing in another way, Kopius helps you excel. At Kopius, we’ve designed a program to JumpStart your customer, technology, and data success.

Our JumpStart program fast-tracks business results and platform solutions. Connect with us today to enhance your customer satisfaction through a data-driven approach, drive innovation through emerging technologies, and achieve competitive advantage.

Add our brainpower to your operation by contacting our team to JumpStart your business.

Related Services:

How IoT Is Reshaping the Retail Experience

Posted on May 20, 2024 by Kopius

Retail technology, or retail tech, has transformed the industry for both e-commerce and brick-and-mortar retailers. The Internet of Things (IoT) is one example of technology set to revolutionize how businesses interact with consumers forever.

Learning more about the current state of IoT in retail and where experts predict it will go can help your business determine how best to incorporate this technology in your everyday operations.

Understanding the IoT Revolution in Retail

Although IoT and retail are still a fairly new combination for most retailers, it’s a promising technology that is set to transform retail as we know it.

IoT is the concept behind smart retail, which is an evolving practice that uses connected technology to create a seamless shopping experience designed to meet today’s increasingly advanced customer expectations. Whether people are visiting your stores in person or shopping online, an IoT experience is significantly more memorable and convenient than a conventional one.

What Is the Internet of Things in Retail?

The Internet of Things in the retail industry is a comprehensive network that collects, monitors, and analyzes customer data in real time using a range of internet-connected devices:

RFID tags: Radio frequency identification (RFID) tags use radio frequencies to continuously transmit signals for location tracking and identification. Unlike traditional barcodes, you can receive RFID signals over long distances, which is ideal for maximum efficiency in retail and shipping purposes.
Cameras: Internet-connected CCTV cameras with video analytics capabilities can capture behavioral and operational data in brick-and-mortar stores for valuable insights into potential areas for process optimization.
Sensors: Various internet-connected sensors, such as pressure sensors, accelerometers, and temperature sensors, can provide data on customer behavior, foot traffic, and store conditions to streamline operations.
Bluetooth: Bluetooth connectivity enables you to build wireless networks of connected devices, creating seamless communication paths between each system component.
Beacons: One of the most popular examples of IoT devices, a beacon is a device that detects when people are nearby and automatically triggers a preset action. For example, a beacon may deliver personalized marketing messages on a screen when a returning customer walks by.

The specific devices you should use in your IoT retail system depend on your specific business, the products you sell, and your preferences.

IoT Use Cases Driving Retail Experiences

While many believe brick-and-mortar business is outdated, combining IoT and the retail industry can bring in-person shopping experiences back in a new, exciting way. It can also enhance online shopping experiences through a greater potential for data collection and personalization than conventional e-commerce practices.

Here are some examples of real Internet of Things use cases:

In-Store Operations and Analytics

Using IoT data for research and analysis can help businesses make strategic decisions about operational enhancements that generate real results. Plus, automated devices free up store employees from handling time-consuming tasks like manual inventory counts and equipment checks so they can focus on value-added tasks.

Here are a few examples:

Staffing levels: IoT cameras and sensors near store entrances and exits can track customer foot traffic over the course of a typical day, providing valuable insights for scheduling staff.
Physical security: CCTV systems equipped with IoT capabilities can continuously monitor your store for suspicious behavior, automating surveillance and reducing your overall risk.
Store setup: Strategically placed cameras equipped with video analytics technology can also track customer movement patterns, helping you make strategic decisions about where to place products and displays.
Inventory: IoT-enabled devices can save your employees valuable time in manually scanning and counting items during peak hours. RFID tags and sensors attached to products can track customer purchases in real time, and an integrated notification system can alert you as soon as stock levels dip below a predetermined number.
Self-checkout automation: RFID tags and cameras can track when items leave the store, automatically charging customers for their purchase, as in the case of Amazon Go.
Predictive maintenance: Attaching IoT sensors to store equipment can help you save valuable time and money on preventive maintenance by monitoring equipment conditions in real time. When the sensor detects abnormalities in the equipment, it can flag your employees to perform maintenance.

Every retailer has a unique objective. That said, the “unique” aspect is exactly why IoT is so interesting. Understanding the various challenges and goals faced by customers, then developing and applying the best solution to meet said challenges and goals is what makes it fun.
Matt Wright, Principal Software Architect at Kopius

The applications for this information go well beyond managing your store in the current moment — you can also effectively prepare your business for the future using this data.

An integrated, AI-powered analytics solution can extract powerful insights from historical data, identifying trends and shifts in consumer behavior over time. Monitoring these trends will help inform your decisions about future-proofing your business, allowing you to create a retail experience that stays relevant for years to come.

Retail CDP and Personalized Marketing

When it comes to marketing, taking a one-size-fits-all approach is a surefire way to reach no one. Personalization, or tailoring your messaging to your customers’ individual preferences, is essential for connecting with them in a way that inspires loyalty and enhances your reputation.

Tapping into retail IoT capabilities can help you create hyper-personalized omnichannel advertising and marketing campaigns for maximum effectiveness. For example, the data your in-store IoT devices collect can provide valuable insight into customer behaviors such as:

How often someone visits your store
Which items a customer typically purchases
What time of day customers are most likely to make a purchase

While in-store IoT devices can efficiently capture massive amounts of customer data, you need some way to activate that data to ensure a strong return on investment.

An integrated customer data platform (CDP) provides a centralized database for all the behavioral and demographic data your IoT devices collect. You can also combine your in-store data with information from your e-commerce channels for a 360-degree view of all your customers and their preferences.

Data analytics software can then extract valuable insights from that information for:

Better market segmentation
More accurate targeting
Enhanced messaging

These insights will help you identify where the best potential growth areas are in your business. For example, the audience you typically target in marketing may not be the same audience that shops from you — and good data collection and analytics will help you determine whether this is the case so you can adjust your strategy.

Enhancing Customer Experiences Through IoT

When properly implemented, IoT networks can significantly improve both in-person and online shopping experiences with capabilities such as:

Better inventory management: Attaching RFID tags to products or product packaging helps you accurately track stock movement and quantities in your warehouses, making it easier to ensure you always have enough product to meet customer demand without the risk of dead stock.
Memorable product demos: Connected systems create more memorable in-person product demonstrations by bridging the gap between the real and the digital. Customers can interact with your products in new and exciting ways, significantly boosting your chances of making a sale.
In-store marketing: IoT solutions like beacon technology enable retailers to offer customers tailored promotions and real-time discounts based on their preferences and previous purchasing behavior. It is important to seize opportunities that present a more pleasant experience through technology. The companies that utilize IoT and other retail technologies to improve the accessibility of their customers or their employees are the ones pathing a new way within their industries.
Eye-catching displays: Internet-connected lights, screens, and smart shelves come together to create memorable displays that capture customers’ attention — and change in real time to keep them looking.
Order tracking: When customers purchase products online, they want to ensure their order arrives on time and in good condition. RFID tags and sensors, combined with integrated shipping management software, give customers greater visibility into the status of their orders, providing peace of mind.

Ultimately, the best approach your business can take to IoT and the customer experience is understanding your customers first. Knowing who they are and what they look for in a shopping experience is critical for designing experiences they will love.

Addressing Data and Security in IoT-Enabled Retail

As with any technology that captures personal data, customers have concerns over whether companies that use IoT devices to collect their data will take the proper measures to protect it.

Safeguarding Customer Data

This is always an important topic with customers when implementing IoT solutions. Often times, the “edge” devices generating data are field deployed and outside physical boundaries controlled by the customer. Sometimes the devices have no way to prevent anyone from physically accessing the devices, which poses an obvious risk to data security and integrity. Luckily, there are numerous mechanisms within IoT to address some of these concerns – things like Public Key Infrastructure (PKI), data encryption, and physical mechanisms such as Trusted Platform Modules (TPM) can all be implemented to mitigate data risks.
Matt Wright, Principal Software Architect at Kopius

Before and throughout implementation, your business should follow best practices for protecting customer information within an IoT framework:

Segment your IoT network: Network segmentation breaks up your primary IoT network into multiple smaller networks, which enables you to quarantine and resolve security threats as soon as one appears.
Run frequent updates: Hackers often take advantage of known system vulnerabilities, and regularly updating and patching your network helps protect against these risks by remediating them.
Use advanced authentication technologies: Identity and access management, multi-factor authentication, and similar technologies prevent unauthorized users from accessing your data by requiring additional forms of authentication at login.
Test regularly: Regularly testing your system is essential for discovering potential vulnerabilities, helping you determine the best course of action to eliminate them.
Monitor all endpoints: The more devices you add to your IoT network, the larger your attack surface — and the greater your risk. A centralized software system that provides comprehensive visibility into each device in your network is critical for effectively protecting your customer data.
Train your employees: Over 70% of all data breaches involve the human element, and uninformed employees are often the reason why. Effective training is necessary to ensure everyone in your business knows how to securely use your IoT devices.

For retailers without extensive IT departments, developing an IoT cybersecurity solution in partnership with a reliable technology consulting firm is a cost-effective way to create a comprehensive solution that complies with all relevant cybersecurity standards. Your consultant will work closely with you to determine your business’s specific security needs so you can address all the potential gaps in your system.

The Future of IoT Security in Retail

One of the biggest developments in IoT security across all industries is the need for standardization and regulation.

The federal IoT Cybersecurity Improvement Act of 2020 bars the United States federal government from purchasing and/or using IoT devices that do not comply with standards set by the National Institute of Standards and Technology after December 2022.

Although the law only affects the public sector, stricter regulations for IoT devices are likely to impact the private sector in the coming years. The state of California, for example, has taken steps to legislate IoT security with the passing of Senate Bill 327 — also known as the California IoT Security Act — in late 2018. This law requires IoT device manufacturers to equip their products with unique first-time passwords as well as other appropriate security features, such as:

Data encryption
Regular software updates or patches
Secure APIs

Because SB-327 is a state law, it only applies to device manufacturers selling their products in California. However, as IoT implementation expands, other states may follow suit.

The Benefits of IoT in Retail

Some of the most significant benefits of implementing IoT solutions in a retail business include:

Cost savings: Automated IoT devices can help you reduce your operational expenses by identifying issues and adjusting your conditions to keep costs low. For example, smart lighting networks connected to motion sensors can raise store lights during peak hours and dim them when the store is quiet, lowering your energy usage.
Greater customer loyalty: Hyper-personalized marketing and memorable experiences improve customer satisfaction, inspiring customers to return frequently.
More accurate inventory: Tracking inventory movement in real time helps you ensure you have enough product available when customers want it.
Better customer service: Automating routine, time-consuming tasks like inventory counting and maintenance frees up your employees to handle more pressing tasks on the floor, such as assisting customers in finding products.
Gaining a competitive edge: Although many companies are starting to see the value in IoT for the retail industry, this technology is still in its early stages. Investing now can help you get a leg up over your competitors and plan a future strategy.
Data-driven decision-making: The data you collect from your IoT devices provides invaluable information about your customers’ preferences, purchasing habits, and shopping behaviors, which can help you make more informed decisions to grow your business.

It’s important to note that simply purchasing and deploying IoT devices is not the end of the story. Your IoT network should be seamlessly integrated with a robust digital infrastructure to support the high volumes of incoming data your devices will collect daily.

A Fortune 500 company worked with Kopius to develop a Sound Pressure Level proof-of-concept, which is a terrific example of a company gaining a competitive edge in the market by blending accessibility initiatives with IoT technology. Using microphones and real-time SPL data, we were able to better understand the soundscape of the store environment, while isolating specific sound sources that may cause discomfort to hearing aid users. This, in turn, provided usable insights for layout designers to make decisions about sound insulation and improve the accessibility of their stores for individuals with hearing disabilities.
Spencer McCluskey, Director of Delivery of Kopius

Preparing for What’s Next: IoT in Retail

The economic future for IoT technology is bright. Projections estimate that the global IoT retail market will grow at a compound annual growth rate of 28.4% from 2023 to 2030.

That said, new technologies come and go at an overwhelming pace. Companies need to adopt a forward-thinking mindset when adopting the latest IoT tech. Working with an experienced, knowledgeable team of consultants can help you develop a streamlined IoT system that will help your business adapt to rapid changes in retail technology.

Contact Us to JumpStart Your Retail Technology Success

Investing in IoT and other emerging retail technologies helps your business stay competitive and resilient amid the constant shifts in the retail tech landscape — and partnering with the right organization is key to getting the most out of your investment.

With 600 expert team members dedicated to delivering excellence in digital strategy, development, and future growth, Kopius can provide our clients with custom, industry-leading solutions tailored to their unique requirements.

Thanks to our extensive experience designing solutions for retailers in various countries, you can count on the team at Kopius to unlock flexible, scalable digital possibilities for your business. Contact us today to learn more about our retail technology services or schedule a consultation.

Related Services:

Retail Technology and Innovation – a Conversation with Michael Guzzetta

Posted on October 28, 2022 by Kopius

We recently spent some time with Michael Guzzetta, a seasoned retail technology and innovation executive and consultant who has worked with brands such as The Walt Disney Company, Microsoft, See’s Candies, and H-E-B.

Tell me about your background. What brought you to retail?

Like many people, I launched my retail career in high school when I worked in the men’s department at Robinson’s May. I also worked for The Warehouse (music retailer) and was a CSR at Blockbuster video – strangely, I still miss the satisfaction of organizing tapes on shelves.

I ignited my tech career in 2001 when I started working in payment processing and cloud-based tech, and then I returned to retail in 2009 when I joined Disney Store North America, one of the world’s strongest retail brands.

During my tenure at Disney, I had the privilege of working at the intersection of creative, marketing, and mobile/digital innovation. And this is where the innovation bug bit me and kicked off my decades-long work on omnichannel innovation projects. I seek opportunities to test and deploy in-store technology to simplify experiences for customers and employees, increase sales, and drive demand. Since jump-starting this journey at Disney Store, I’ve also helped See’s Candies, Microsoft, and H-E-B to advance their digital transformation through retail innovation.

What are some of the retail technologies that got you started?

I’ve seen it all! I’ve re-platformed eCommerce sites, deployed beacons and push notifications, deployed in-store traffic counting, worked on warehouse efficiency, automated and integrated buyer journeys and omnichannel programs, and more. I recently built a 20k SF innovation lab space to run proofs-of-concept to validate tech, test, and deployment in live environments. Smart checkout, supply chain, inventory management, eCommerce… you name it.

What are the biggest innovation challenges in retail today?

Some questions that keep certain retailers up at night are, “How can we simplify the shopping experience for customers and make it easier for them to check out?”, “How can we optimize our supply chain and inventory operations?”, “How can we improve accuracy for customers shopping online and reduce substitutions and shorts in fulfillment?” and “How can we make it easier and more efficient for personal shoppers to shop curbside and home delivery orders?” Not to mention, “What is the future of retail, and which technologies can help us stay competitive?”

I see potential in several trends to address those challenges, but my top three are:

Artificial Intelligence/Machine Learning – AI will continue to revolutionize retail. It’s permeated most of the technology we use today, whether it’s SAAS or hardware, like smart self-checkout. You can use AI, computer vision, and machine learning to identify products and immediately put them in your basket. AI is embedded in our everyday lives – it powers the smart assistants we use daily, monitors our social media activity, helps us book our travel, and runs self-driving cars, among dozens of other applications. And as a subset of AI, Machine Learning allows models to continue learning and improving, further advancing AI capabilities. I could go on but suffice it to say that the retailer that nails AI first wins.

Computer vision. Computer vision has a sizable opportunity to solve inventory issues, especially for grocery brands. Today, there’s a gap between online inventory and what’s on the shelf since the inventory system can’t keep pace with what’s stocked and on the shelves for personal shoppers, which is frustrating for customers who don’t expect substitutions or out-of-stock deliveries. With the advent of computer vision cameras, you can combine those differences and see what is on the shelf in real-time to inform what is available online accurately. Computer vision-supported inventory management will be vital to creating a truly omnichannel experience. Computer vision also enables smart shopping carts, self-checkout kiosks, loss prevention, and theft prevention. Not to mention Amazon’s use of CV cameras with their Just Walk Out tech in Amazon Go, Amazon Fresh, and specific Whole Foods locations. It has endless applications for retail and gives you the eyes online that you can’t get in stores today.

Robotics. In the last five years, robotics has taken a seismic leap, and a shift has happened, which you can see in massive, automated fulfillment centers like those operated by Amazon, Kroger, and Walmart. A brand can deliver groceries in a region without having a physical store, thanks to robotic fulfillment centers and distribution centers. It’s a game-changer. Robotics has many functions beyond fulfillment in retail, but this application truly stands out.

What is a missed opportunity that more retail brands should take advantage of?

Data. Data is huge, and its importance can’t be understated. It’s a big, missed opportunity for retailers today. Improving data management, governance, and sanitation is a massive opportunity for retailers that want to innovate.

Key opportunity areas around data in retail include customer experience (know your customer), understanding trends related to customer buying habits, and innovation. You can’t innovate at any speed with dirty data.

There’s a massive digital transformation revolution underway among retailers, and they are trying to innovate with data, but they have so much data that it can be overwhelming. They are trying to create data lakes, a single source of truth, and sometimes they can’t work because of disparate data networks. I believe that some of the more prominent retailers will have their data act together in a few years.

“Dirty data” results from companies being around for a long time, so they’ve accrued multiple data sets and cloud providers, and their data hasn’t been merged and cleaned. If you don’t have the right data, you are making decisions based on bad or old data, which could hurt you strategically or literally.

What do you wish more people understood about retail technology and innovation?

Technology will not replace people. In my experience, technology is meant to enhance the human experience, which includes employees. If technology simplifies the process so much that the employees become idle, they are typically trained to manage the technology or cross-trained to grow their careers. Technology isn’t replacing the human experience any time soon, although it is undoubtedly changing the existing work experience – ideally for the better, both for the employees and the bottom line.

Technology doesn’t always lower costs for retailers. Hardware innovation requires significant capital expenses when it’s deployed chain-wide. Amazon’s “Just Walk Out” is impressive technology, but the infrastructure, cloud computing costs, and computer vision cameras are insanely expensive. In 5 years, that may be different, but today it is a loss leader. It’s worth it for Amazon because they can get positive press, demonstrate innovation, and show industry leadership. But Amazon has not lowered its operating costs with “Just Walk Out.” This is just one example, but there are many out there.

Online shopping will not eliminate brick-and-mortar shopping. If the pandemic has taught us anything, online shopping is here to stay – and convenience is extremely attractive to consumers. But I think people will never stop going to stores because people love shopping. The experience you get by tangibly picking something up and engaging with employees in a store location will always be around, even with the advent of the Metaverse.

What are some brands that excite you right now because of how they use technology?

Amazon. What they have been doing with Just Walk Out technology, dash carts, smart shelves, and other IoT technology puts Amazon at the front of the innovation pack. Let’s not forget that they’ve led the way in same or next-day delivery by innovating with their automated fulfillment centers! They have the desire, the resources, and the talent to be the frontrunner for years to come.

Alibaba. This Chinese company is another retailer that uses technology in incredible ways. Their HEMA retail grocery stores are packed with innovation and technology. They have IoT sensors across the stores, electronic shelf labels, facial recognition cameras so you can check out with your face, and robotic kitchens where your order is made and delivered on conveyor belts. They also have conveyors throughout the store, so a personal shopper can shop by zone, then hook bags to be carried to the wareroom for sortation and delivery prep – it’s impressive.

Walmart and Kroger. Both brands’ use of automated fulfillment centers (AFCs) and drone technology (among many others) are pushing the boundaries of grocery retail today. Their AFCs cast a much wider net and have expanded their existing markets, so, for example, we may see Kroger trucks in neighborhoods that don’t have a store in sight.

Home Depot. They have a smart app with 3D augmented reality and robust in-store mapping/wayfinding. Their use of machine learning is also impressive. For example, it helps them better understand what type of projects a customer might be working on based on their browsing and shopping habits.

Sephora. They use beacon technology to bring people with the Sephora app into the store and engage them. They have smart mirrors that help customers pick the right makeup for their skin tone and provide tutorials. Customers can shop directly through smart mirrors or work with an in-store makeup artist.

What advice do you have for retailers that want to invest in technology innovation?

My first piece of advice is to include change management in the project planning from the start.

There are inherent challenges in retail innovation, often due to change management issues. When a company has been around for decades or even more than a century, they operate with well-known, trusted, and often outdated infrastructure. While that infrastructure can’t uphold the company for the next several decades or centuries, there can be a fear of significant change and a deeply rooted preference for existing systems. There can be a fear of job loss because of the misconception that technology will replace people in retail.

Bring those change-resistant people into the innovation process early and often and invite them to be part of the idea generation. Any technology solution needs to be designed with the user’s needs in mind, and this audience is a core user group. Think “lean startup” approach.

My second piece of advice is to devote enough resources to innovation and give the innovation team the power to make decisions. The innovation team should still operate with lean resources, focusing on minimum viable products and proofs of concept, so failures aren’t cost-prohibitive. The innovation team performs best when it has the autonomy to test, learn, and fail as they explore innovative solutions. Then, it reports its findings and recommendations to higher-ups to calibrate and pivot where needed.

In closing, I’d say the key to innovation success is embracing the notion of failure. Failure has value! Put another way; failure is the fast track to learning. Learning what not to do and what to try next can help a retail company to accelerate faster than the competition. Think MVP, stay lean, get validated feedback quickly, and iterate until you have a breakthrough. And always maintain a growth mindset – never stop learning and growing.

JumpStart Your Retail Innovation Success

Innovating technology is crucial, or your business will be left behind. Our expertise in technology and business helps our clients deliver tangible outcomes and accelerate growth. At Kopius, we’ve designed a program to JumpStart your customer, technology, and data success.

Kopius has an expert emerging tech team. We bring this expertise to your JumpStart program and help uncover innovative ideas and technologies supporting your business goals. We bring fresh perspectives while focusing on your current operations to ensure the greatest success.

Partner with Kopius and JumpStart your future success.

Additional resources:

Driving Your Retail Digital Transformation

Posted on January 28, 2019 by Brian Lamilla

Technology holds massive promise for the retail industry, and retail brands are each in their own stage of the digital journey. In this post, we look at how to drive a digital retail transformation.

As I look back at all the connections we’ve made, partnerships we’ve formalized, and solutions we’ve launched during Kopius’ month of retail, it’s apparent that this industry – which is no stranger to change – faces a large crossroad. There are major threats as well as exciting opportunities as the retail landscape gets more competitive, more personal, and more connected.

Throughout the month, we’ve covered a lot. I started by asserting that experiential retail is not new, but rather an ever-evolving paradigm. I then announced our Retail Innovation Accelerator, which will help incubate transformative solutions for our customers across voice, data, and blockchain. And finally, I recapped the 5 most important trends and insights we gleaned at NRF’s Big Show.

For my final blog post in this series, I’d like to provide some color on how you can help drive digital transformation in your retail business. Whether you’re a c-level executive, technology director, or store manager, there’s no doubt that you’ve been exposed to changes brought by a digitizing world. Just the fact that your customer carries a smartphone in their pocket should be seen as a major disrupter. In this post, I hope to illuminate how you can drive your organization to embrace these disruptions rather than fight them, and lead the right investments that yield future growth.

Embracing Change for Operational Efficiency

What does the term “digital transformation” make you think of? It more than likely conjures thoughts of big, flagship-style customer experiences: wow moments that are high-touch, highly-personalized, and focused on making a brand memory. While these kinds of experiences are important to engaging fans, they won’t drive lasting momentum unless coupled with internal and operational digital transformation.

Retail strategy can be mapped on a pyramid, similar to Maslow’s hierarchy of needs. While there are exciting opportunities around customer experiences at the top of the pyramid, retailers will have more success along their digital transformation if they consider basic and operational needs first to build a strong internal foundation. The best way to secure budget for transformative customer experiences is to save money through operational efficiency. Can you utilize AI to predict stocking needs? Can you better analyze sales data to inform your buyers’ decisions? How about use sensors to understand traffic patterns to more efficiently staff your store? By establishing transformation from the ground up, you’ll unlock more business opportunities and free up budget.

Justifying Your Digital Transformation Investment

Embracing any kind of transformative business practice takes an up-front investment. However, all too often this fact leads retailers to think that digital transformation is only for the risk-takers. I’ve heard it before: “we want to build a proof of concept and deploy a pilot experience, but don’t know how to justify it to our CEO”. The truth is, if you’re trying to paint the picture of a 1:1 connection between a transformative PoC/pilot and immediate profits, you’ve probably already lost the battle. Investing in the future takes a jostling of resources in the near-term, and I could write an entire thesis on the intricacies of reorganizing and reallocating your investments to drive change. However, justifying your investment in digital transformation can be a whole lot easier.

Simply put: learning about your customer is the most important investment you can make. A good digital transformation strategy always unlocks more data points – whether from IoT sensors, mobile traffic analysis, or AI services – about how your customers interact with your brand. The key to driving digital transformation investments with internal stakeholders is to communicate the ROI of enhancing your understanding of customers’ needs and desires. Furthermore, digital implementations can often act as a mirror: by learning more about your customer, you in turn learn more about your company.

Contact Kopius Today to JumpStart Your Retail Success

At Kopius, we’ve designed a program to JumpStart your customer, technology, and data success.

Add our brainpower to your operation by contacting our team to JumpStart your business.

Additional Resources:

The Future of Retail — Trends From NRF

Posted on January 21, 2019 by Brian Lamilla

After a great week at NRF talking tech with industry leaders about the future of retail, experiencing cutting-edge demos, and learning about retail’s biggest challenges and opportunities, we’re back in the office with a heightened appreciation for the exciting possibilities ahead.

In my last post, I announced our Retail Innovation Accelerator, which is focused on harnessing emergent technologies to develop customer solutions in an agile way. This retail solutions incubator — which is powered by internal innovation projects and strategic partnerships across voice & chat, telemetry & insights, and modern supply chain — provides a framework for our customers to more easily identify the technologies best suited to digitally transform their businesses.

This week, I’d like to switch gears a bit and discuss some of the trends we saw at NRF. While by no means an exhaustive list, I hope this helps paint the picture of how retailers should think about digital transformation efforts over the next year and beyond.

1. The whole is greater than the sum of its parts. One thing that stood out compared to past NRF Big Show’s is how technology companies are thinking about the power of multi-platform solutions. To unpack that, it’s becoming more and more evident that there isn’t one technology that can truly transform your retail and brand experience. Rather, a suite of technologies must be integrated into a cohesive, omni-channel strategy to really move the needle. If you are considering RFID sensors to make your dressing room “smart”, pair this with digital signage powered by a recommendation engine to help complete your customers’ outfit. Or how about taking that a step further with an AR-powered selfie app that shows customers what those boots would look like with their new dress? Individual technologies may generate some buzz, but the right suite of technologies can truly transform a retail business.

2. The year of the edge: connected everything. The best brands react to their customers in real-time, and the only way to do that is by listening smartly. The collection — and more importantly analysis — of data will continue to be one of the primary differentiators between successful and unsuccessful retailers. But how do you capture the kind of meaningful data that yields actionable insights? At Valence, we’ve been working in the IoT space for many years. However it was still eye-opening to see such a strong focus on the “connected everything” store. Edge devices and sensors are seeing exponential advancements in on-board compute power, connectivity, and battery life, while AI-powered cloud services continue to evolve. With technologies like computer vision, it’s amazing how much you can learn about yourself and your customers.

3. Retail robotics is maturing, but not there yet. We all know robotics in the warehouse is already here, but when will robots be roaming the sales floor? Can a robot re-stock shelves? How about provide wayfinding to a lost customer? We saw some compelling “front-of-house” demos from hardware and software companies alike, but at this time robotics still resonate best when tackling “back-of-house” challenges. However — as with all promising technologies — it’s only a matter of time until the cost-benefit ratio leads retailers to use robotics for more purposes.

4. Your platform is your product. While we used to only think of your platform — whether web site or store front — as the place to showcase your product, today’s competitive landscape means that your platform might just be your most important product. There are so many ways to buy, it’s important that yours is the easiest, fastest, and has a little extra flavor than the competitor. Improving your platform can be as simple as re-writing your web site copy to better match your brand’s voice, or can be as complex as restructuring your inventory management system and releasing a “buy online, pick up in-store” app. Whatever the approach may be, it’s important to understand how vital your platforms are in differentiating your brand.

5. Amplify your voice with…voice! It seems obvious, but in order to stay relevant brands must operate at the pace of consumers. And with the exponential evolution cycle in consumer technology, this is getting harder and harder to do. Voice may one day usurp touch as the primary user interface, and it’s important to consider the user flow for customers interacting with your brand on services like Amazon Alexa. We didn’t see as many voice-based demos at NRF as we expected…all the more reason to start investing in this space before your competitors do.

Next week, I’ll be providing a recap of everything we’ve learned and announced throughout our month of retail. I’m excited to share the opportunities on the horizon for all retailers who are ready to adopt emergent technologies.

JumpStart Your Future Retail Success

At Kopius, we’ve designed a program to JumpStart your customer, technology, and data success.

Add our brainpower to your operation by contacting our team to JumpStart your business.