Infosys may have solved a $100 billion problem for companies in the retail business: how to tell whether their promotions really work. In the process, Infosys has also created the potential for stores and consumer-goods companies to track things like traffic and inventory in real time.
Consumers like Procter & Gamble and the retailers they sell through spend more than $100 billion per year to promote products in stores, according to Forrester Research. They pay fees for shelf space in stores, including premiums to have their products at eye level. They pay for special promotion stands. And although they pay for armies of checkers to see whether retailers follow through on the deals, it’s a system fraught with error, says Forrester analyst George Lawrie.
“Stores make lots and lots of mistakes,” Lawrie says, noting that at many retail stores, the people who stock the shelves may have little or no interaction with the people who make the promotional deals. “In the big brands, the CFOs know they’ve had to hand these funds over to be eye level on aisle number one, and they don’t know if it’s really happening, and they’re beginning to start to ask if the stores can prove it.”
So Infosys, which counts 12 of the world’s 20 largest retailers among its current customers, has developed ShoppingTrip 360, a hosted software application that can track shoppers and inventory, using wireless sensors placed on shelving, promotional displays, and shopping carts. The sensors, which use the 802.15.4 wireless protocol to connect to each other in a mesh network, can send information such as where shoppers stop in a store, what products they pick up, what they put back, what they put in their cart, and whether a product is out of stock. Infosys has also developed an application to let consumers in the store use their cell phones to get information such as store maps, or to access an online shopping list or collection of recipes.
“This, we believe, is the next wave of innovation in the retail space,” says Infosys cofounder and CEO S. “Kris” Gopalakrishnan. He notes the push by retailers in the 1970s and ’80s to develop electronic data interchange, as well as the 1990s push into e-commerce. He says that Infosys is trying to usher in the in-store Internet.
Retailers and consumer-goods makers typically get data on a daily basis, from point-of-sale scanners. Getting better data about product sales was a big reason why retailers like Wal-Mart and Target pushed radio frequency identification (RFID) technology, minuscule radio chips that were expected to replace the bar code on individual products. But RFID chips remain too costly to be ubiquitous, and Lawrie says that they may never be. He says that the cost of the chips, coupled with the substantial amount that retailers would have to spend to outfit their stores to work with the chips, have limited interest in RFID.
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