Many experts believe the Internet of Things (IoT) could have a massive impact on the retail sector. Indeed, some retailers are already using IoT technology to optimise supply chains and back-office operations. But could the IoT also change the customer-facing side of the industry? One London-based retail startup certainly thinks so.
Founded by UCL alumni Peter Juen Ho Tsanga and Julija Bainiaksina in 2014 on the back of the Tech City-based Idea London initiative, The Dandy Lab is a retail store stuffed with "Internet of Everything" technology provided by Cisco, and supported by software from third-parties and fellow Idea London startups.
On a tour of the store, which is nestled in a trendy corner of Spitalfields Market in East London, Bainiaksina told V3 that the initial idea behind the venture was to "provide a platform for small independent British fashion designers to sell their products and tell their stories. What we're doing is using technology to facilitate that".
She added that the store was specifically designed to bridge the gap between online and physical retail: "We're fusing e-commerce with our in-store experiences."
This is achieved through the use of several different devices positioned around the shop floor.
Towards the entrance of the store is a large flat screen connected to a near-field communication (NFC) terminal and surrounded by NFC-tagged products representing each brand the store stocks.
By placing a product on the NFC terminal customers can see information about the brand and its history on the screen.
Complementing this main product information system are several tablet-sized screens embedded into the shelves around the store.
These provide product details, stock levels, price and other information when an item of clothing or an accessory is held in front of the screen.
Virtual shopping in the real world
In one corner of the store is a webcam connected to a screen running software from Snap Fashion, another Cisco-sponsored Idea London technology startup.
This combination of software and Cisco hardware effectively creates a virtual styling wall.
Jonathan McCoy, chief technology officer at The Dandy Lab, demonstrated how the system captures a picture of a garment or potentially anything else with a colour or pattern that a shopper is keen on, and provides advice regarding clothes that could match or clash with the colour.
He said The Dandy Lab has an ambition to build on Snap Fashion and create a virtual dressing room featuring facial recognition technology that can monitor a shopper's emotions as they select an outfit.
Startup attitude injected into retail
The startup spirit behind The Dandy Lab is so strong that it even extends to the shop floor, with a downstairs area featuring desks and Aircharge wireless chargers set aside for anyone to come in and do a spot of work as well as shop.
A bar will be added in future to encourage people to spend even more time in the store.
To make the shopping experience feel even more personal and interactive, The Dandy Lab boasts Cisco DX70 video conferencing systems that customers and staff can use to communicate with product manufacturers and suppliers to discuss, for example, bespoke product designs or alterations.
Behind the scenes
While a lot of the technology The Dandy Lab uses is costumer facing, there is still a significant amount hidden behind the scenes.
Using the store's Cisco Meraki WiFi routers, the Dandy Lab can tap into Cisco's Connected Mobile Experiences (CMX) analytics package to see how many passersby come into the store, as smartphones pickup and interact with the wireless signal.
This gives a far more accurate picture of how busy the store is than simple sales figures alone.
Bob Garland, vertical solutions architect for UK retail at Cisco, said the company has ambitions to update CMX so that it can help to deliver an even more personal shopping experience.
"Longer term, we're looking at building out a context-aware portal for that, so it would know who you are. And if you start to link that with other data sources like sales records and other touchpoints of the technology in the store and your online behaviour, we start to remove the distinction between online and physical [retail], and then it's just a relationship with a customer," he said.
The Dandy Lab uses London-based Hoxton Analytics software and hardware to analyse the shoes and ankles of customers in order to get an indication of their age, style preferences and demographic without compromising their identity.
Underpinning most of The Dandy Lab's technology is Cisco's Store in a Box, which provides a suite of products and software to support the running of a store.
Utilising the concept of "fog computing" where computing capabilities can be carried out on the edge of IoT networks, combined with Cisco's retail analytics package, The Dandy Lab can analyse the data it collects from the variety of sensors, apps, and systems mentioned above linked to the store's network.
This bypasses the need to have a collection of servers of large amounts of centralised computing power.
The harvested data can range from sales and stock levels, to the shop's energy consumption and customer behaviour.
McCoy said having access to all this data from across the store allows The Dandy Lab to get much deeper and real-time insights into the operations of its store.
"There's all this data that you don't expect from the outset and you'd never think to sit down and compare it," he said.
"But now that we've got it we can actually start seeing trends and see how things are relevant," he added, noting how footfall and sales data can be combined with weather data to see if the store's performance was affected, and how it can adapt to such situations.
Beta testing future retail
At first glance The Dandy Lab may seem as high-tech as retail environment could possibly get. But McCoy said the store is only in its beta phase and is serving as a way to see what technology works and what does not in the retail world.
"The whole idea is really to evolve it, so the store is a beta. A lot of people drive towards having the final version for the launch, but the problem then is you've already taken too many decisions in advance of understanding what really does happen and how people will accept it," he said. "Developing in the lab is very different to how it works in the field."
He said The Dandy Lab is planning to use Cisco's connected lighting in the store's changing rooms so that the lights can be adjusted digitally by a user, allowing them to see how they look in selected clothes under different lighting.
For example, simulating the lighting one would expect to find in a bar on a Friday night.
Ged Fitton, senior business development manager at Cisco, said all the data collected by The Dandy Lab can be put to use in its negotiations with suppliers and manufacturers, as it will have an insight into how customers interact with products beyond sales figures.
This potentially opens up revenue streams beyond just the sales that are put through the till.
"By connecting everything to the internet what you are ultimately doing is accessing a very, very rich dataset that you're collecting, and all of a sudden the retailer is actually gathering data that becomes very powerful in their conversation with suppliers," he said. "And that's a very valuable data source that could be a back-office revenue stream in the future."
As The Dandy Lab pushes ahead with its ambitions to realise the future of retail, Cisco will be alongside to offer its technology and support, as Garland said such a partnership adds credence to the use of Cisco's technology in the real world.
"From Cisco's point of view we're happy to supply all the equipment because we want to see this realised rather than just on slide decks," he said.
The Dandy Lab offers a compelling look at how physical retailers can embrace the latest digital technology rather than being muscled out by e-commerce rivals.
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