Intelligent Systems Help Retailers Operate More Efficiently, Open New Opportunities

NEW YORK – Jan. 16, 2012 – Throughout the retail and hospitality industries one axiom reigns supreme: The customer is always right. Though dating back to the 19th century, it remains a hallmark of excellent customer service. And while the phrase is still as essential as ever, making good on it has become more of a challenge — and more of a possibility.

A collective of buyers, store planners and supply chain managers work together to anticipate next year’s hottest products, create pricing strategies that position the store well against its competitors, and keep the shelves replenished with just enough merchandise to meet demand. Meanwhile, a retinue of store managers and employees focus on serving the customer and selling that merchandise. Underpinning all these efforts is an array of applications and devices that is often outdated, disconnected and more a source of inefficiency than it is a driver of business value.

This week at the National Retail Federation Annual Conference and EXPO (NRF) in New York, Microsoft will discuss the details of its retail strategy, which focuses on transforming those one-off applications, devices and databases into an end-to-end solution. The overarching goal is to help retailers respond to changes in the market, drive greater efficiencies in their processes, and provide customers with a shopping experience that is personal, seamless and differentiates the retailer from its competitors.

A critical component of Microsoft’s retail strategy involves the use of intelligent systems that enable the flow of data across a company’s infrastructure, from specialized devices where it’s generated by employees and customers, to back-end systems and services where it’s translated into strategic insight and business decisions.

Connected Devices Lead to Customer Insight

Part of what makes intelligent systems possible is a new generation of barcode scanners, point of sale systems, kiosks and other devices that are powered by Windows Embedded. Together, they generate a richer level of data about nearly every facet of a retailer’s business. And once it’s been analyzed, this data can provide a wealth of insight ranging from more accurate sales forecasts to more effective pricing models and a better understanding of customer behavior.

For companies seeking a competitive advantage, such data is becoming the new gold standard. Microsoft estimates, based on 2011 IDC semiconductor market data, that by 2015 demand for intelligent systems within the retail industry will grow from its current level of around 15 million units to more than 28 million units.* Retailers such as Family Dollar and U.K.-based Co-operative Group have already started implementing intelligent systems, and Microsoft is seeing this same trend take hold in the healthcare and manufacturing industries as well.

To help companies get the greatest value, Windows Embedded released a white paper last fall that outlines the essential characteristics of an intelligent system: security, identity, connectivity, manageability, user experience and analytics. And over the past several months, Microsoft has released several products that help deliver on some of these aspects of an intelligent system.

Taking a Natural Approach to Intelligent Systems

The most recent example, and perhaps most noteworthy, is Kinect for Windows, which was the focus of some attention last week at the Consumer Electronics Show (CES) in Las Vegas. Microsoft announced the commercial availability of the Kinect for Windows SDK, and offered a conceptual example of how Kinect for Windows and Windows Embedded can work together to reinvent the retail experience. Microsoft worked with Razorfish to develop a proof-of-concept scenario much like this, which will be on display at NRF.

People have become more accustomed to a user experience that incorporates touch, voice and gesture recognition, and with its support for Windows Embedded Standard and Windows Embedded Enterprise, Kinect for Windows opens the door for a variety of new data collection and consumption scenarios that introduce these capabilities. For example, the Razorfish demo combines an NEC digital sign with Kinect for Windows to engage customers before they even enter the store. Inside, customers encounter the same combination of technologies in a virtual dressing room experience that allows them to view, navigate and see how garments look on a lifelike avatar version of themselves, without having to switch outfits or sort through sizes.

The Samsung SUR40 for Microsoft Surface is also part of the mix in this demo, as well as another demo for NRF that Microsoft created with IdentityMine. In both cases, customers can immerse themselves in a 40-inch touch-screen environment to find more information on the products that interest them. The Samsung SUR40 also becomes a useful tool for sales associates to upsell or cross-sell by providing visual, on-the-spot comparisons between products.

Gleaning Insight From Streams of Data

The critical component in all these scenarios is being able to generate, track and harness a variety of data streams. For example, the aforementioned NEC digital signs demonstrated during NRF feature a corresponding Microsoft Tag for each featured retail item on display. Whenever a customer captures that tag with a Windows Phone 7 or other smartphone, it generates a piece of data that helps retailers track what products are attracting the most attention and monitor the preferences of customers that are enrolled in their customer loyalty program through applications such as Microsoft Dynamics CRM.

Windows Embedded worked with Microsoft Gold Certified Partner, Extended Results, to create a third proof of concept for NRF around providing executives with better access to real-time data. The potential pitfall with any data stream is being able to glean the golden nuggets of business insight from the extraneous chaff. In March 2011, Microsoft released Windows Embedded Device Manager to help enterprises get the most out of their data.

Windows Embedded Device Manager was pre-installed on all of the Windows Embedded-based devices featured throughout the three demos, highlighting the ability for IT professionals to gain greater control over the critical devices generating, capturing and analyzing data. This control extends to a range of devices including POS systems, hand-held devices, digital signs and kiosks.

Once data is captured by a device, it can be consumed and analyzed by a variety of Microsoft applications and third-party services that live within a company’s channels, datacenters or on a public cloud:

Ultimately, intelligent systems will benefit everyone along the spectrum, giving retailers the relevant and timely information they need and offering customers the service they deserve.

The Microsoft end-to-end retail demonstrations will be held in the company’s booth at NRF through Jan. 18, 2012. For more information on these demos and how intelligent systems are transforming the retail experience, visit the Microsoft in Retail & Hospitality home page.

* Worldwide Intelligent Systems 2011-2015 Forecast:  The Next Big Opportunity, September 2011

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