IoT (Internet of Things) has a lot of promise for retailers over the next few year. Estimates run into the hundreds of billions of dollars of annual impact by 2025. But building an ROI is difficult. How do you get value now?

1. CONNECTED RETAIL
THE BUSINESS CASE
FOR IOT
Oliver Guy
Retail Industry Director
Software AG

2. 3 |
A BUSINESS CASE FOR IOT
• The Internet of Things
• Experimentation and the Business Case
• IoT Maturity
• IoT Innovation
• Bringing it all Together
TODAY

3. 4 |
A BUSINESS CASE FOR IOT
• The Internet of Things
• Experimentation and the Business Case
• IoT Maturity
• IoT Innovation
• Bringing it all Together
TODAY

4. 5 |
INTERNET of THINGS
MAY BE BIGGER
THAN THE INTERNET ITSELF

5. 6 |
THE INTERNET OF THINGS IN RETAIL
POTENTIAL VALUE
Source: McKinsey – “Unlocking the potential of the Internet of Things”
http://www.mckinsey.com/business-functions/business-technology/our-insights/the-internet-of-things-the-value-of-digitizing-the-
physical-world
per year by 2025.
The application of IoT within
retail has a potential impact of
$410Bn - $1.2Tn

6. 7 |
RETAILERS AGREE
IOT WILL BE HUGE
13%
39%
42%
21%
41%
38%
22%
16%
16%
30%
4%
3%
14%
1%
2%
My company has no idea how the Internet of
Things will impact our own operations in the
next 3 years.
The Internet of Things will have a dramatic
impact on consumer products in the next 3
years.
The Internet of Things will drastically change
the way companies do business in the next 3
years.
IoT Perceptions In Retail
Strongly Agree Agree Neutral Disagree Strongly Disagree
80%
Source: The Internet Of Things In Retail:Great Expectations
RSR Benchmark Report, August 2015

7. 8 |
CONNECTED RETAIL
Connected Retail
combines new IoT initiatives with the
enterprise to ensure data and actionable
insights are fully utilized across the
business.
Connected Retail will transform retail
environments for the digital age.
WHAT IS IT?

8. 9 |
A BUSINESS CASE FOR IOT
• The Internet of Things
• Experimentation and the Business Case
• IoT Maturity
• IoT Innovation
• Bringing it all Together
TODAY

9. 10 |
IOT IN RETAIL
© 2015 Software AG. All rights reserved.
EXPERIMENTATION
RFID TagsElectronic Shelf Edge Labels Smart Mirrors
Location AnalyticsBeacons Smart Badges

10. 11 |
TOP 3 IOT ORGANISATIONAL INHIBITORS
THE NEED TO SHOW VALUE
BUSINESS CASE AND ROI APPEARS TO BE AN ISSUE
Business leadership doesn’t understand the
benefits of Internet of Things
Overall Capital Requirements – we never
even get to the subject of ROI
We have not identified a business case to support specific
use-cases for the Internet of Things
The technology supporting the Internet of Things
is not mature enough for our business to invest
Our existing infrastructure is not capable
of supporting Internet of Things
We don’t have the skills to manage the analytics and
predictive modelling required to take advantage of IoT data
Our IT team does not have the capacity to take on
Internet of Things projects
Source: The Internet Of Things In Retail:Great Expectations
RSR Benchmark Report, August 2015

11. 12 |
JUSTIFYING A ROLLOUT
BUILDING A BUSINESS CASE
© 2015 Software AG. All rights reserved.
?
Staff Efficiency Gains
Error Reduction
Reduced Paper & Print Costs
Business Case for IoT
Electronic Shelf Edge Labels

12. 13 |
DRIVING REAL VALUE
© 2015 Software AG. All rights reserved.
THE CASE FOR CONNECTED RETAIL
Real-Time POS Streaming
In-Store Inventory
Price and Promotion
Optimization
Electronic Shelf Edge Labels

13. 14 |
DRIVING REAL VALUE
© 2015 Software AG. All rights reserved.
THE CASE FOR CONNECTED RETAIL
Real-Time POS Streaming
In-Store Inventory
Price and Promotion
Optimization
Electronic Shelf Edge Labels
Connected Retail
Real-Time
Offer Alignment
1. Correlate POS data & inventory
2. Model future near-term performance
3. Adjust offer
4. Roll-out adjusted offer to shelves & POS

14. 15 |
JUSTIFYING A ROLLOUT
© 2015 Software AG. All rights reserved.
BUILDING A BUSINESS CASE
Electronic Shelf Edge Labels
Real-Time POS Streaming
Price and Promotion Optimization
In-Store Inventory
Real-Time
Offer Alignment
+
+
+
= =
Reduced Paper & Print Costs
Error Reduction
Staff Efficiency Gains
Increased Sales
Increase Promotional Uptake /
Conversion
Reduced Stock-Outs
Increased Margin

15. 16 |
DRIVING REAL VALUE
© 2015 Software AG. All rights reserved.
THE CASE FOR CONNECTED RETAILTHE CASE FOR CONNECTED RETAIL
Time
IncreasingValue&ROI
Disparate Sensors and Initiatives
Make Sense of Multitude of Inputs
Alert and suggest actions
to improve and correct
Automatically take
‘Corrective Actions’
Leverage the
‘Retail Moment’Sense
Pan-Sensor Visibility
Automate
‘Actionability’

16. 17 |
THE INTERNET OF THINGS IN RETAIL
THE RETAIL MOMENT
Source: Gartner – “Unlocking the potential of the Internet of Things”
http://www.gartner.com/newsroom/id/3093819
The impact of digital business
and the IoT will require
advanced analytics to support
real-time decision making to
take advantage of momentary
business opportunities.

17. 18 |
A BUSINESS CASE FOR IOT
• The Internet of Things
• Experimentation and the Business Case
• IoT Maturity
• IoT Innovation
• Bringing it all Together
TODAY

18. 19 |
IOT INNOVATION IN
RETAIL
POWERED BY

19. 20 |
Serious About Retail
Strategic Partnerships
Retail Specific Solutions
Retail Insight and Thought
Leadership
Technology Partner Investment

20. 21 |
SOFTWARE AG
INNOVATING WITH IOT
Location Analytics
Real-Time Inventory Visibility
Location Based Marketing
Smart Store Monitoring
Free
25%
SALE
50%
Admit
one

21. 22 |
LOCATION ANALYTICS
HISTORICAL DEVICE LOCATIONS
Hotspots of customer
crowding
• Highlight problems
• Understand passage
• Understand impact of
promotions and
respond

22. 23 |
LOCATION BASED MARKETING
SPECIAL OFFER
Special offer for
Mr Clark
Free headphones
with your new
iPad

23. 24 |
REAL-TIME INVENTORY
UP-TO-DATE FIGURES
Real-Time Inventory
Up-to-date inventory figures
in spite of delays caused by
processing of the ERP
systems

24. 25 |
SMART STORE MONITORING IN ACTION
STORE OVERVIEW
Shading indicates high dwell
times
Red indicates potential
problems
Graphical store overview
with overlays of dwell time,
conversion and flow rates
Live, Historic, Predicted

25. 26 |
SMART STORE MONITORING IN ACTION
TASK ASSIGNMENT
Tasks assigned to
staff based on need
and availability

26. 27 |
A BUSINESS CASE FOR IOT
• The Internet of Things
• Experimentation and the Business Case
• IoT Maturity
• IoT Innovation
• Bringing it all Together
TODAY

27. 28 |
CONNECTED RETAIL
BRINGING IT ALL TOGETHER
https://www.youtube.com/watch?v=6OmhBclaOys

28. 29 |
LEVERAGING THE DIGITAL BUSINESS PLATFORM IN RETAIL
A SAMPLE OF CUSTOMERS
DIGITAL BUSINESS PLATFORM

29. 30 |
SOFTWARE AG
WHAT IT MEANS TO YOU
50
Track record
used by over
retailers
globally
In Retail
Stability
for your future
investments
Global leader in process and data
orchestration and real-time analytics
Support for industry standards
Independent and agnostic
Support
for your
initiatives
Extensive partner network
2,200 expert consultants
across 70 countries
Global and Regional competency centres

30. 31 |
SUMMARY & ADVICE
IoT will revolutionize the retail industry
1
Elevate the IoT conversation beyond
individual initiatives5
Taken in isolation, IoT initiatives are
hard to justify2
Consider how IT platforms and digital
transformation support the IoT business case6
Combining IoT with established
enterprise IT drives new opportunities3
Think about how IoT initiatives can squeeze
even more value out of existing investments7
“Connected Retail” is the name
we give to this new paradigm4
When looking at IoT related
infrastructure, make sure it can scale8

31. 32 |
www.SoftwareAG.com/ConnectedRetail