Edge Computing Turns Retail Challenges Into Industry-Leading Opportunities

Retailers have a huge opportunity to offer intuitive, technology-driven experiences to employees.

Despite facing industry headwinds, research has revealed that 68 percent of U.S. retailers plan to increase their technology spending over the next three years. This is due to growing customer expectations, as well as the return of consumers to brick-and-mortar stores, which is driving up IT expenditure. As a result, retailers are exploring new ways to modernize the retail experience by introducing new capabilities and seamlessly integrating their digital and physical stores.

As such, retailers are adopting edge computing and other technologies to enhance the way that retailers sell and customers shop. For example, edge computing can simplify store operations, such as inventory tracking and curbside pickup, letting retailers focus on improving the customer experience and boosting revenue. With an efficient and integrated IT infrastructure, retailers can develop flexibility and agility to tackle challenges of an ever-evolving, competitive market head-on.

Modernizing the Retail Experience

The edge is the place (outside of the data center or cloud) where data is acted upon nearest to its point of creation to generate immediate value. For retailers, the edge may be a storefront, warehouse, pick-up locker, or any place where goods and services are handled at any given point. Edge computing has transformative potential that has come at exactly the right time — as retailers face challenges such as security, e-commerce competition, labor shortages, and customer engagement.

The edge is already proving its value as a key differentiator for retailers aiming to rise up in a crowded space. Here are three primary challenges facing retailers today, and how edge is helping address them:

1. Business Intelligence

Edge computing helps retailers better understand customer behaviors and needs throughout the customer journey. The ability to monitor product interaction, detect repeat customers, and gain detailed insight into the path and choices made by consumers has historically been an advantage of e-commerce sites. With edge computing, retailers gain those same insights in traditional brick-and-mortar settings, while adhering to local privacy and regulatory needs.

• Traffic Counting: Every retailer knows how many transactions to expect in a physical store. However, determining whether that number is too high, too low or just right is dependent on the number of actual visitors to that location. Conversion ratios, line lengths and heat mapping in-store are key metrics that can hugely benefit from the insights generated by edge computing. The ability to analyze customer footfall and assess advanced shopper analytics on-premises adds an extra level of granularity that physical retailers previously struggled to see.
• Path Tracking and Product Interaction: Edge computing can also provide retailers with insight into the paths customers take throughout the store. Such insights include where they stop and what products they interact with before coming to the register, giving retailers deeper insights into how to optimize their store layout and merchandising.
• Loyalty Detection: Retail customers increasingly expect personalized experiences online, so why not extend that to the physical store? The edge enables more sophisticated technology that, in turn, gives customers more convenient and seamless physical experiences that encourage return visits and increased loyalty. For example, retailers can use license plate tracking to speed up the drive-thru experience by suggesting a customer’s order based on historical transactions.

2. Onboarding and Training

Physical stores are designed to operate offline, making over-reliance on the cloud a tricky hurdle to overcome for retailers. That’s where the edge comes in, collecting data and enabling intelligent automation right where the business needs it.

• AR-Enabled Experiences: Retail experiences one of the highest attrition rates of any industry, with a 60 percent employee turnover rate each year. Although it’s still an emerging technology in retail, edge computing is helping deliver more augmented reality-enabled training and onboarding experiences directly to employees. AR enables frontline employees to explore different scenarios and training exercises, helping them become more productive, much faster. For example, order fulfilment is improving the average curbside pickup time by providing employees with more efficient path finding and order picking paths. Enabled by the edge, systems tell employees exactly where to go, even if they’re new. It’s all delivered directly to their workplace device in real time.
• AI and Virtual Assistance: Edge computing also supports virtual assistants to help employees with their daily tasks. From answering customer queries to providing on-the-go guidance, this helps employees be more productive and efficient, reducing training costs and increasing customer satisfaction.

3. Proactive Loss Prevention

While loss is a reality of the industry, edge computing helps retailers better anticipate and rethink how they approach asset protection.

• Security and Safety: Two of the most significant pain points impacting net revenue for retailers, security and safety covers everything from online returns fraud and shoplifting to employee protection and cybersecurity breaches. Edge technologies integrate data from multiple sources to protect against these challenges and support loss prevention. For example, stores can improve security at checkout by integrating point-of-sale data with computer vision. Also, edge technology can detect intruders in restricted areas during restricted times.
• Proactive Alerts: Edge also enables more sophisticated security technologies, such as facial recognition which can alert staff of potential bad actors entering a store. With the number of flash robberies (i.e., organized groups of shoplifters swarming a store at the same time) on the rise, edge computing can send automated alerts to employees when there’s an unusual spike in people suddenly entering the store or congregating in an area. Alternately, if people are detected in restricted areas, video can be selectively sent to supervisors for review before alerting authorities. This limits false alarms and associated fees.

Revolutionizing Retail With Edge Computing

Edge computing is a powerful tool that can catapult retailers above their competition. By harnessing the power of edge, retailers gain real-time insights into customer behavior, enhance digital experiences, improve employee management and even security measures.

The future of retail belongs to those who effectively use technology to drive innovation and growth. A thoughtful edge computing strategy is essential to achieving this goal.

Samir Sandesara is the retail product manager, edge solutions at Dell Technologies.