Like Price Tags Once Did, the Ambient IoT is Turning Retail on its Head

With the rise of online shopping, omnichannel merchandising, and “customer experience,” it’s easy to forget that one of the biggest disruptions in retail is more than 150 years old: the price tag. When introduced by retail pioneer John Wannamaker in the 1860s, price tags upended the common practice of haggling. Suddenly, there was no back and forth between retailer and customer. Price tags said everything necessary about the worth of a product, relative to others in the store, and about the trustworthiness of the retailer. And business boomed.

Over time, price tags evolved. They came in different colors, drawing shoppers’ attention to the “cool” or “new” or “discounted.” And as the industry advanced, price tags included barcodes and other data that conveyed as much to retailers (e.g., where to find stock in the warehouse) as they did to shoppers. Today, discerning what a price tag is trying to say (like that a number four at the end of a Target price tag signals a final clearance price) has spurred a cottage industry of online interpreters.

More than a century later, the ambient Internet of Things (IoT) is the high-tech successor to Wannamaker’s industry-changing invention, allowing products to communicate all the time, and in much more detail. Using tiny, ultra-low-cost compute devices — ambient IoT Pixels — affixed to products and packaging, everything in a store, warehouse or distribution hub can tell its story. Not only can ambient IoT Pixels tell shoppers everything about a product, but they can also tell them everything about its production, like whether it was made or grown sustainably, and its real-time carbon footprint based on distance traveled, handling and more.

Plus, by combining ambient IoT with generative artificial intelligence, shoppers (and retailers) can ask products anything they want. Like questions about the farms where food was grown (shoppers), or for details about a product’s supply chain journey (retailers) to identify bottlenecks along the way.

But here’s what makes ambient IoT the greatest disruption in retail since the price tag: Unlike price tags, ambient IoT Pixels know what’s going on around them. They can sense and communicate where they’re located (on the retail floor or on a loading dock), what condition they’re in (too hot or too cold), and even what direction they’re heading (to the correct store or somewhere else).

Retailers are now benefiting from ambient IoT. Grocers track produce from farm to store to ensure customers get the freshest food possible. Pharmacies track the location, temperature and handling of crucial vaccines and medications, leading to healthier outcomes. Somewhere, John Wannamaker is applauding.

Ambient IoT is an Internet of Everything

Ambient IoT marks the next step in development of the IoT. For too long, the IoT has been an Internet of Expensive Things (smart appliances, cars, speakers). However, with ambient IoT, everything — trillions of things — can be on the network, communicating their status and giving retailers visibility into the opaque corners of supply chains, manufacturing, distribution, and even consumption.

For example, when a pair of jeans connects to the cloud via ambient IoT (with permission of the owner), a brand can know how often they’re worn. Therefore, the brand doesn’t have to guess which fashion line is most popular. And it can use the ambient IoT to communicate information back to the consumer about the jeans’ authenticity.

In the food chain, supermarkets can be alerted if temperature-sensitive produce, meat or dairy have been left out or transported under sub-optimal conditions.

This is because with ambient IoT, sensors, compute power and connectivity are all around us. Ambient IoT forms the fabric of the physical retail world, connecting it with the digital through several technologies: inexpensive, stamp-sized compute devices (the ambient IoT pixels); standards-based Bluetooth wireless communications; and self-generating power supplies that harvest radio energy so no batteries are required. All of this drastically reduces — by a factor of 100X — the infrastructure costs of electronically tagging and connecting products, packaging, pallets and shipping containers by any other means.

Moreover, employees don’t need to scan anything, virtually eliminating human error from inventory operations. Ambient IoT Pixels communicate via a vast mesh of existing wireless devices, such as smartphones and wireless access points, or though off-the-shelf, standardized routers installed in stores and throughout the supply chain.

Ultimately, ambient IoT can drastically reduce retail shrinkage because retailers know where all their inventory is. And it can be a boon to omnichannel sales because it eliminates any disconnect between e-commerce sites and physical stores. When a consumer buys online for pickup in-store (BOPIS), ambient IoT confirms the product is, in fact, available in-store, ensuring a positive customer experience.

Modernizing Supply Chains for the Better

In fact, the retail applications of ambient IoT are many. Supply chain visibility all the way to the consumer opens the door to seamless “as a service” delivery models. It’s no longer the case that a smart refrigerator tries to determine if you’re out of milk; the milk carton knows it’s almost empty and places an order.

Food retailers have already used ambient IoT to help eliminate waste in their supply chains, which is good for the retailer but also good for the planet. Plus, ambient IoT is critical to meeting a growing body of supply chain regulations, such as the U.S. Food Safety Modernization Act, which requires traceability and reporting throughout the food chain.

Traceability laws are poised to impact retailers worldwide across industries, from California’s Transparency in Supply Chains Act to the European Union’s Supply Chain Act. In all these cases, ambient IoT offers the most comprehensive, cost-effective means of tracing products through the supply chain and gleaning their stories, like what they’re made of, where they came from, and whether they’re safe.

Yes, taking advantage of ambient IoT means adopting new ideas. Much of the technology, however, already exists. Some of the largest retailers in the world are already putting in place ambient IoT platforms to solve existing business challenges, knowing full well that as the technology grows more pervasive, it can solve future challenges and fundamentally reimagine supply chains — all the way to the shopping cart, and then into the home.

For retailers, the time to act is now. They’ve seen a lot of change in 150 years, but nothing like ambient IoT. At least not since the price tag.

Steve Statler is the chief marketing officer and ESG lead at Wiliot, the Internet of Things pioneer whose visibility platform is enabling trillions of “things” to gain intelligence.