The Changing Face of Retail

Although this has been an especially tough year for retail (3,800 stores closures to date, 12,000+ predicted), the importance of retail to the economic fabric continues to grow.  The total retail trade in the US exceeds 25% of the GDP while retail continues to be the largest private sector employer, powering 42 M (1 in 4) jobs in the US.

While it’s easy to be pessimistic about the prospects of this segment, digging deeper into the data could point to a shift toward stronger fundamentals.

  • Most of the store & mall closings have been lower performing locations and a number of retailers are also opening new stores.
  • While e-commerce revenues have grown exponentially over the last 20 years, e-commerce still accounts for less than 10% of overall retail sales. The merchandise lines that lend themselves to e-commerce (like books, clothing & electronics) have seen far more robust growth than other retail categories, suggesting that e-commerce is also expanding the categories where it is prevalent.
  • And finally the convenience segment (convenience stores, quick serve restaurants, etc.) is experiencing a resurgence driven by store upgrades & an improved customer experience.

Technology continues to be one of the key drivers of change in the retail landscape.  Digitization & the evolution of retail technologies have changed both shopper behavior and retail economics.  The role of the Chief Information Officer (CIO) has evolved  into the Chief Digitization Officer (CDO). At many leading retailers, the CDO’s team is now responsible for managing store technologies and driving deeper partnership with operations, merchandising & finance.  This team is taking responsibility for the innovation process including retail technology selection, incubation, enterprise-wide deployment and platform operations.  Aligning these new buying centers & virtual teams is an ongoing challenge at most companies.

Cisco’s Retail IoT Approach

At Cisco, we have also been evolving our Retail IoT strategy to better fit the needs of our customers & partners.  As we shift from being a network hardware vendor to a digitization & data management partner, we have been reinventing our portfolio & value proposition. Our focus is to help streamline Retail Automation & AI technologies to drive deeper process integration. Examples of this are the Smart Cooler & Toy Box that we will be demonstrating at Cisco Live.  The Retail IoT team has been heads down for the past few months, refining our retail operations offers & working with our partners to demonstrate the art of the possible.

  • The Smart Cooler: A collaboration with Impinj and a number of other technology partners to demonstrate the integration of disparate technologies like access control, inventory tracking, energy/temperature/door sensors with video cameras & screens to redefine the convenience store cooler. A single platform that provides grab & go access to merchandise, while stores can better manage inventories, customer messaging & appliance health.  All of this on one platform rather than a spaghetti of different devices & applications.
  • The Toy Box: Like we did at NRF, we have once again partnered with Impinj, Sato Global & Mishipay to reinvent the retail store experience. We’ll be demonstrating customer engagement, scan & go payment, inventory tracking, associate workflow management and theft protection on the same IoT platform.

I hope you have a chance to stop by one of our booths at Cisco Live next week (Retail booth #2385 in the DevNet Zone or Unlock the Data booth #885 in the Cisco Campus).  I will also be presenting our Retail IoT approach at the Cisco Live theater in the campus area on Tuesday @ 10am & Wednesday @ 10:30am.  I’m looking forward to seeing old friends & making new ones!



RJ Mahadev

Head, Cisco Retail IoT Solutions

IoT Business Unit