How M2M Technology Can Transform Retail

June 29, 2016     By : Sofia

One of the emerging and exciting technologies of the 21st century is machine-to-machine (M2M) technology. According to the report published by CradlePoint, a provider of 3G and 4G network solutions for businesses, “The M2M market is fueling innovation and improving performance in the retail, finance, healthcare, construction, and transportation industries….” Powered by increasing reliable Internet penetration, M2M networks will soon be widely adopted and functional anywhere with little to no management requirement.

The company believes that M2M technology has the potential to transform various segments of the business landscape: operational efficiency, quality control, decision-making, relationships with customers, and transactional opportunities are enabled and enhanced by M2M applications.

As CradlePoint defines the technology, “M2M refers to direct communications between machines that function, interact, and share information without any special configuration or other setup requirements. With a countless (and rapidly growing) array of devices communicating with other devices across the Internet, the Internet is no longer simply a network of computers but rather what’s commonly referred to as the “Internet of Things.”

Setting the foundation for M2M growth

For M2M technologies to truly take off, there is a necessity for global reliable wireless connectivity. Fortunately, the future doesn’t seem to be posing problems with that as professionals from Cisco estimated that traffic from wireless and mobile devices will account for two-thirds of total IP traffic by 2020.

Moreover, while wired devices will account for 34% of IP traffic, Wi-Fi and mobile devices will account for 66% of IP traffic by 2020. For comparison, last year, wired devices accounted for the majority of IP traffic at 52%.

What is even more impressive, global Internet traffic in 2020 is expected to be equivalent to 95X the volume of the entire global Internet in 2005. Globally, Internet traffic will reach 21 GB per capita by 2020, up from 7 GB per capita in 2015.

M2M technology will become an immense part of everyday life as the number of devices connected to IP networks is expected to be 3X as high as the global population in 2020. There will be 3.4 networked devices per capita by 2020, up from 2.2 networked devices per capita in 2015.

Reliability and speed will not pose a challenge. Broadband speeds will nearly double by 2020 and reach 47.7 Mbps, up from 24.7 Mbps in 2015.

How M2M technology can transform retail

Given a strong foundation for growth, M2M technology and IoT overall will have a significant impact across industries.

The retail industry is expected to be strongly affected by M2M, as CradlePoint suggests. “Using powerful, reliable, and cost-effective 4G LTE technologies, a pop-up retail store can be deployed an instant network in a matter of minutes requiring nothing more than a standard power outlet and a wireless router with 4G connectivity.”

Another important implication for retail is in supply chain optimization. In the report on M2M retail insights, Vodafone suggests that information that will be exchanged between machines will allow “the supply-chain to run effectively and efficiently so shops can have the right stock and offers in place to gain insight into their customers’ behaviors before, during and after their visits. This in turn, enables online outlets to deliver a seamless brand experience and ensure the goods are available in an efficient and customer-friendly way – the ‘omnichannel’ approach.”

Moreover, CradlePoint suggests that M2M is increasingly providing the means for optimized digital signage solutions, enabling dynamic interactive displays. “While often used to manage inventory, logistics and asset protection, the future of M2M enables retailers to deliver customized products and services directly to customers in real time.”

In the near future, store employees will be alerted with the details of a customer that has just entered the store if the customer is a loyalty program member, for example. Knowing who enters the store and having data on the history of interaction and choices, retailers will be able to provide superior customized experiences.

According to the most recent estimations, the POS terminals segment led the M2M services market in the retail industry and accounted for almost 87% of the market share during 2015 valued at valued at $21.08 million. Overall, the global M2M services market in the retail industry by connections was recently valued at $24.28 million in 2015. A substantial growth is expected in the M2M services market in the retail industry by connections with increased adoption of connected devices (POS devices, ATMs, vending machines, kiosks, smart parking meters, and fare ticketing devices).

The vending machines industry is the next big market for M2M technology applications, valued at 1.81 million in 2015. Being able to accumulate data on the selling patterns, M2M technology-enabled vending machines will allow retailers to optimize stocking in particular areas depending on the demand. Machines will be able to perform the automatic reorder of sold-out products and adjust assortment to the purchasing behavior in a particular location.

Although we are probably just at the beginning of the adoption curve and big transformations, there are already successful tech players around the world delivering M2M solutions for retail and beyond. One of the interesting examples is Aeris, a pioneer in the machine-to-machine market, that is both a technology provider and a cellular network operator delivering comprehensive IoT/M2M services to leading brands around the world. Among the range of solutions for various industries, Aeris offers wireless POS to facilitate convenient, fast and secure transactions with end-to-end M2M solutions.

Digital security company Gemalto is another example. The company offers M2M-enabled wireless POS devices that can be installed easily without the need for telephone phone lines. Or they can be installed as a supplement to conventional lines to avoid overloading any one system for complete flexibility and reliability.

Vending machines inventory and payments, ticketing machine sales and payment for transport can be securely facilitated and monitored with Gemalto M2M solutions and services. The company also offers Gemalto Cinterion M2M products for robust, secure, and dependable solutions to facilitate unlimited mobile payment transactions.

Among major M2M technology providers are also AT&T, Orange, KORE Telematics, JT Wholesale, Zazoo, cStar Technologies, Numerex, Singtel, and many others. In the nearest future, the range of companies will certainly grow and retail will be one of the industries to change its face completely by bringing together M2M, VR and other gamechangers.

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Sofia

Sofia is a contributing writer for LTP based in New York. She is a market research professional skilled in data analysis and visualization. Sofia has an extensive experience in consumer behavior studies and marketing analytics. She is passionate about disruptive startups with innovative business models that are having a powerful impact on the industries.

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