Why You Need Sensor Fusion In Your 2016 Retail Analytics Strategy
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Transcript of Why You Need Sensor Fusion In Your 2016 Retail Analytics Strategy
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WhyYouNeedSensorFusioninYour2016RetailAnaly:csStrategy
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ShaunKirbyChiefTechnologyOfficerCiscoConsul:ngServices
MODERATOR:AliciaFiorle9aSeniorEditor,RetailTouchPoints
New Horizons in Retail How the Internet of Everything Changes the Game
Cisco Consulting Services
September, 2015
7 © 2013-2015 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services
By 2020, about 50 billion objects connected to the
Internet
In 2012 alone, we created more data than previous
5,000 years
An estimated 77 billion apps will be downloaded
during 2014
This year, the number of mobile-connected devices will exceed the number of
people on earth
2/3 of the world’s mobile data traffic will be video by 2015
Globally, machine-to-machine IP traffic will grow 20-fold from 2012 to 2017
Digital Disruption Digital
Disruption 53% of young people would trade their sense of smell for technology
50% of shoppers want to integrate mobile into
their grocery experiences
500M people urbanized in the next 5 years
Mobile apps $77 billion industry in 2017
2/3 of the world’s mobile data traffic will be video
this year
By 2020, ~50 billion objects connected
to the Internet
Digital Disruptors
Convergence of Mobile, Social, Cloud, and Data Is Driving Digital Disruption
8 © 2013-2015 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services
Sensor Fusion: From “Sense & Respond” to Sense, Predict, and Act
Sensors & Actuators
Secure Connectivity
Programmability
Manageability
Extensibility
Real-Time, Predictive Analytics
Machine Learning
Stream Processing
Business Rules
Next Gen Collaboration P2P
P2M
M2M
Visualization
Orchestration
The IoE Enabled Organization:
Ø Hyperaware
Ø Predictive
Ø Agile
Cloud
Fog
Flexible, Scalable Infrastructure
9 © 2013-2015 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services
Value Is Not in the Number of Things, But the Connections of People, Process, Data, and Things
Things
People
Data
IoE $19.0 trillion
Process
10 © 2013-2015 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services
Sensor Fusion in Retail Delivers Significant Business and Financial Impact
Checkout Optimization
Out of Stocks Mobile Customer Promotions
Mobile Customer Service
Supply Chain Optimization
$70B retailer with 2,000 large
format, general merchandise and
grocery stores
$2B Revenue
$100M SGA
$200M Working Capital
Value ChainTM Impact Opportunity
Real Time Loss Prevention
$50B CPG Company
$1.5B Revenue
$300M SGA
11 © 2013-2015 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services
Fog Platform Filtering Local Rules Recognition
Wi-FiGesture
Recogni=on
AssociateMobile
DigitalSignage
CustomerMobile
VideoCameras
Central Compute Platform
Big Data Repository
Fast Data Processing
Action Enablement
Wisdom from the Cloud
Business Systems
eCommerce & Semantic Web
DoorHinges
IRMo=on
ParkingSpaceSensor
Wi-FiBadge
WeightMat
Wi-FiTags
ShelfWeightSensors
Sensor Fusion in Retail Lights up a Myriad of Dark Assets
12 © 2013-2015 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services
Trip Wires • Count shoppers entering and leaving
Area Counts • Count shoppers in specific areas of interest
Queue Depth • Count shoppers waiting for service
Dwell Times • Measure time waiting for checkout or
service
Pilot Implementation: Stereoscopic Cameras
13 © 2013-2015 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services
Wide Area Counts • Count shoppers in broad areas
Door Activity • Measure refrigeration door opening &
closing
Shelf Stock • See holes on shelves
Modular Integrity • Assess planogram compliance
Pilot Implementation: HD & PTZ Cameras
14 © 2013-2015 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services
Active Wi-Fi Tags • Track carts throughout store
Aisle Beacons • Pinpoint carts entering and leaving specific
aisles
Checkout Beacons • Associate carts with market basket
Market Basket Fusion • Replay and analyze shopping trips
Pilot Implementation: Wi-Fi Tracking
15 © 2013-2015 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services
Current State With IoE
Cashier Hours/Day: Cost/Day: Average Queue Length: 95% Queue Length: Average Wait Time: 95% Wait Time: Utilization
150 $ 1800
2.5 2
1:13 3:49 70%
Weekend Weekday 200
$ 2400 2.7 3
1:31 4:01 78%
140 $ 1680
1.6 1.7
0:29 1:55 77%
Weekend Weekday 180
$ 2160 1.9 2.5
1:09 4:00 86%
Economics: Checkout Optimization: $100M / yr. Savings for 1500 Store Chain
An estimated annual savings of $50-$70K
can be achieved at one large store in a year
2-3 FTE Free per large store to redirect to other
tasks
95-percentile wait time cut by ½ on weekdays
Up to 50%+ reduction in average wait time
16 © 2013-2015 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services
Multi-day view
0
0.25
0.5
0.75
1
0
0.25
0.5
0.75
1
Current System reported shelf stock level IoE Solution reported level
Single day view
Shelf inventory depleting while system inventory increasing Shelf inventory zero
Case Study: On-Shelf Availability (OSA)
Out of Shelf
Stoc
k Le
vel
17 © 2013-2015 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services
Metrics Current State With IoE Benefit
Lost sales: Driver: 1. Opportunistic picks
$100M $60M $40M (incr. rev)
Stocking labor: Drivers: 1. Inventory checks reduced 2. False picks avoided
$80M $35M $45M (reduced cost)
Vendor audits: Driver: 1. Cost of store audits
$30M $0 $30M (reduced cost)
Soft benefits include: 1) Increased customer service satisfaction from increased product availability 2) Increased store management satisfaction from OSA process simplification
Economics: On-Shelf Availability (OSA)
1500 Store Chain
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Market Basket Fusion Analytics Opens New Windows on Conversion
Cart Speed Slow Fast
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25M Wi-Fi Location Points
847,615 Visits 7.9M Scans
72,490 Confidently Identified Cart Trips Between 5 min and 3 hrs duration
20,007 Cart Trips Spent >30s in Dept. X
4461 Purchased
$42 Ave. Basket (Carts + Non-Carts)
$61 (Carts Only)
$114
$27 in Dept. X
27.6% Conversion
22.3% Conversion Lingered 4m 15s
Lingered 2m 22s $93
6.2% of All Carts Converted
Case Study: Merchandising Conversion
20 © 2013-2015 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services
Handbags
Women’s
Boys’
Pha
rmac
y Men’s
Glasses
Tops
Grocery
Girls Shoes
Girls’
Improving Conversion Through Sensor Fusion Example Results & Outcome
Max
Min
Potential Value of
Conversion Campaigns
Example Findings: § “Conversion
Cliff”
21 © 2013-2015 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services
Handbags
Women’s
Boys’
Pha
rmac
y Men’s
Glasses
Tops
Grocery
Girls Shoes
Girls’
Improving Conversion through Sensor Fusion Example Results & Outcome
Max
Min
Potential Value of
Conversion Campaigns
Example Findings: § “Conversion
Cliff”
o Showrooming in Grocery
22 © 2013-2015 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services
Handbags
Women’s
Boys’
Pha
rmac
y Men’s
Glasses
Tops
Grocery
Girls Shoes
Girls’
Improving Conversion through Sensor Fusion Example Results & Outcome
Max
Min
Potential Value of
Conversion Campaigns
Example Findings: § “Conversion
Cliff”
o Showrooming in Grocery
o Social media opportunity in Women’s
23 © 2013-2015 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services
Handbags
Women’s
Boys’
Pha
rmac
y Men’s
Glasses
Tops
Grocery
Girls Shoes
Girls’
Improving Conversion through Sensor Fusion Example Results & Outcome
Max
Min
Potential Value of
Conversion Campaigns
Example Findings: § “Conversion
Cliff”
o Showrooming in Grocery
o Social media opportunity in Women’s
o Extensive search throughout
24 © 2013-2015 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services
Sales Impact from Promotions in a Particular Department
Fri Sat Mon Sun Tue Wed Thu Average
30.0% 28.5%
22.6%
25.4%
Sun Mon
27.2%
32.0%
28.5% 27.2%
31.6%
27.7%
31.4%
20.4%
23.5%
27.8% 26.0%
22.6% 24.6%
31.2%
3/24/14 3/25/14 3/26/14 3/27/14 3/28/14 3/29/14 3/30/14
6.0% 7.6% 7.7% 7.0% 7.2% 6.9%
9.7%
% Visiting Department % of Those Purchasing % Of All Shoppers Purchasing
Promotion Dates
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Shelf Set A/B Testing with CPG Collaboration Planogram A Planogram B
Original SKU Location New SKU Location
7.3% C
onve
rsio
n R
ate
Caucasian Females 25-34
Positive Mood
11.1%
Con
vers
ion
Rat
e
Caucasian Females 25-34
Positive Mood
1 Week Cumulative Results
26 © 2013-2015 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services
Hot Spots in the IoE Technology Stack Architecting Dynamic Experiences Levels
Application (Reporting, Analytics, Control)
Data Abstraction (Aggregation & Access)
Data Accumulation (Storage)
Edge Computing (Data Element Analysis & Transformation)
Connectivity (Comm & Processing Units)
Physical Devices & Controllers (The “Things” in IoE)
Collaboration & Processes (Involving people and bus. processes)
1
2
3
4
5
6
7 Data at
Rest
Data in Motion
4. Orchestration & Visualization - SPOG
1. Precision Indoor Location 2. Video - the Supersensor
3. Wearables
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1. Precision Indoor Location
On the brink of pervasive, precise indoor location
Strategies that Work • Drive Mobile App /
Site Engagement • Target Mobiles and
Wearables as the experience platform
• Fuse with sensing across channels to achieve breakthroughs
• Adopt infrastructure that protects from new threats and helps manage increased complexity
Scrambling & Encryption
Today: 7-10m (aisle)
2015: 1-3m (aisle)
Future: <1m (product/shelf)
Previously: 7-10m (zone)
Angle of Arrival Wi-Fi
Beacons
Sensor Fusion
Low Cost Active Tags
Device Proliferation
Rogue Beacons
Location Insight
Competitor
Crowdsourcing
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2. Computer Vision and Video Analytics
Cameras become the “super-sensor” and everything “sees”
Lensless Cameras Deep Focus
Deconvolution 4K / 8K Video Understanding
Demographics • Ethnicity • Mood • Body language
Eulerian Video Magnification
Autocalibration
• Extensible with new software • Unobtrusive and low maintenance • Already widespread • Transparency • Symbiosis, not espionage
Strategies that Work • Tap fog computing to scale
to pervasive video without drowning in data
• Converge surveillance, security, and analytics initiatives with common infrastructure
• Position cameras to collect multiple metrics
• Adopt technology that can be extended with new computer vision easily
• Look for auto-calibrating technologies
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3. Wearables
Free, continuous channel engagement
• Wearables not the whole platform • Fads vs. sticky devices • Context and content required to
realize value
Strategies that Work • Build audio and semantics
into apps to engage in busy store environment
• Revive augmented reality innovation
• Tap health data as vast new source of shopper insight
• Crowdsource valuable insights into shelf condition, operations, and other store health indicators
• Consider new horizons for gamification
30 © 2013-2015 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services
4. Single Pane of Glass (SPOG) for IoE
?
Little Geospatial Context
Diverse Analytics Tools Complex Connections Among Previously Dark Assets
Wildly Disparate Datasets and Sources
```
TOTAL IOE Value at Stake: $19.0 Trillion
• Visualization
• Orchestration
Strategies that Work • Virtualize data sources • Adopt visualization tools
with 3D spatial capability and “infinite” zoom
• Provide intuitive control over data
• Embed collaboration with the SPOG
• Focus on seamless integration of new devices and creation of new visualizations
The end of the dashboard era…Minority Report, here we come!
31 © 2013-2015 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services
In Summary
1. There’s money to be had – top and bottom line from IoE to digitize everything
2. Rapid prototyping / modeling techniques using real data in live environments to demonstrate value
3. Platform architecture • Avoid point solutions • Open, multi-sensor fusion • Data at the edge
Thank you.
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Q&A//Panelists
@CiscoConsul:ng
ShaunKirbyChiefTechnologyOfficerCiscoConsul:ngServices
MODERATOR:AliciaFiorle9aSeniorEditor,RetailTouchPoints
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