OAKBROOK TERRACE, Ill. -- The growing potential of the "Internet of Things," mobile dialogue and big-data crunching may make retailers salivate just thinking about the loyalty, marketing and operational opportunities around the corner.
But while all that information is ready to come at retailers large and small, the digital pathways, roundabouts and hubs currently in place will face dramatic transformation. Add to that winding heap of noodles a jalapeno called "data security" and the whole entrée may be just too much to handle--at least in one sitting.
So as part of an ongoing conversation of how the industry gets to the Nirvana of complete data analysis, real-time inventory and mobile everything from payments to digital coupons, I spoke with a few solution suppliers with ideas--albeit some with self-serving ends--on what needs to happen for Pooh bear to reach the honeypot.
To understand where store devices and infrastructure needs to go, here's a broad brush stroke of where things stand. Typically, a point-of-sale (POS) register acts as a hub for much of the data collection that happens at the store--daily sales, credit-card transactions, pump activation--with a backoffice computer handling other activities such as inventory tracking, labor scheduling, store accounting and communications to headquarters.
Data flows back and forth between the store and home office via segregated cables or potentially the same cable but segmented lines, or possibly through an aggregating box on site. Data from tank gauges, price signs, cooler sensors and other devices are either looped automatically via ports and cables or Henry or Jane, the store associate, manually reads and inputs the information into either the backoffice computer or the POS.
As the dawn of big data and mobile transactions lumbers closer, the flow of data, its analysis, rerouting and protection become critical problems to solve.
Big data analysis clearly won't happen at the store. For larger chains, the benefit will be the collection of raw data from all sites to a central location. And for all retailers, true data crunching needs to happen within the vast server farms cultivated by the likes of Amazon.
Similarly, mobile payments, messaging and rewards tracking and disbursement can start outside the retailer's digital highway, but a cellular path will ultimately have to turn on the pump. And loyalty messages via cellular data stream or beacon has to return to the phone.
For both data security and analytics purposes, people are looking up--to the "cloud." Simply put, data has to route from the store to the right place for crunching, approval or conversion, all activities that just can't happen at the store.
In the new visions of these digital highways, the devices at the store level have to act like interconnected waterways, a mini Roman aqueduct. For San Jose, Calif.-based NCR, the POS is the hub to the cloud, where NCR's work in connecting the retailer to transaction processors, mobile wallets or analytics providers can occur through one, unseen gateway.
"Our goal was to create and manage the [third-party] interface points so the retailer is not maintaining all [of them]," said Matt Miller, global solutions marketing manager for NCR, Duluth, Ga. "There are tens of thousands of folks who'd like to connect with the retailer. [We've created] and vetted this ecosystem."
Now, another store-level option emerging is to funnel everything through the … wait for it … pump controller. Yes, that simple little box that unlocks the gas pumps. But with mobile phones changing the payment paradigm, this model may have its merits.
To take on new mobile payment options, "the traditional approach [is] writing software in the POS to connect to every payment provider, credit card and loyalty card," said Ric Snyder, product manager for Wayne Fueling Systems, Austin, Texas. "By having payment thru [the pump controller] you keep the POS out of that. You implement a mobile payment gateway in the cloud and where all the individual interfaces are. That's where all of that occurs."
Much of the headache for any new technology comes with physically upgrading hardware and software to all talk the same language. Applications in the cloud have to access data that's at the store level and vice versa. The potential gold on either side of the cloud is forcing people to build the rainbows in between.
Yet for all that has to be realized, a lot is already in place. "With improved communication links, onsite aggregation solutions, cloud delivery of operational site applications and wider-focus, data-driven platforms, it is not a difficult task to [for example] uplift real-time or almost real-time data from the store to the cloud, which can be used to inform decisions," said Adrian Preston, chief technology officer at Kalibrate, Florham Park, N.J., believing many retailers have already built workable digital highways.
"The challenge that operators face is not so much getting the data to the cloud, it's what to do with it," he said. "How do I integrate all this data into a coherent form I can use, how do I turn this from data into intelligence and how do I utilize this intelligence to impact my business?"
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