Retail is one of the fastest changing industries and often at the forefront of technological innovation and digital transformation. A growing pressure for profitability, low margins and the need to meet the evolving cross-channel and convenience needs of a 24/7 customer base drive the retail transformation agenda.
The physical store remains vital for retail, yet its role is evolving, mainly due to the Internet and the preferences of the Gen X and Millennial generations. For owners, managers and franchisees of retail chains, convenience stores and other shopping outlets and retail facilities, the challenge is to innovate, optimize and future-proof the business.
“This requires operational efficiency enabled by an end-to-end data-driven view on the business and the stores, allowing to save costs, enhance customer experience, ensure business continuity, and increase revenues through insights and actions in a sustainable way.” says Marine Petry, in charge of the Channel Strategy for the Retail Segment at Schneider Electric.
By 2020 Millennials will account for nearly USD$1.4 trillion in spending power. More than anyone else, they use omni-channel shopping tools to find the best price and ensure they’re supporting the “right” brands.
Marine walked us through some important changes and priorities in the retail industry and more specifically on the retail facilities. She is responsible for a brand-new retail Specialization program at Schneider Electric. The goal: empowering partners in its EcoXpert channel program to help retailers succeed to deploy all its connected solutions that will provide the visibility required to run their business in the IoT (Internet of Things) age.
Optimizing now to be ready for the next opportunities – and challenges – is key to success says Marine Petry. And those opportunities are right around the corner.
The architectures and solutions for retail business facilities
Marine, thanks for your time. Schneider Electric launches a retail specialization training module in the EcoXpert partner program. You already offer solutions for retail facilities across various segments. Can you give us a brief introduction to the program?
Marine Petry: Retail is a new strategic segment for Schneider Electric. The retail specialization for our EcoXpert partners is launched in August 2019 and covers the optimization of store operations as well as new opportunities and innovative applications.
We are developing offers that are dedicated for the retail segment which we divide in six subsegments:
- Food retail with, among others, supermarkets and convenience stores;
- Specialty retail such as fashion retail;
- Restaurants with, for instance, fast food chains and coffee shops;
- Banking, Insurance and Workforce services, with a special focus on the agencies in retail banking;
- Automotive Services including Gas stations where a lot is poised to happen in the coming years;
- Infrastructure retail, meaning the various stores and outlets in airports, metro stations etc.
The architectures and solutions are tailored to the needs of retail businesses from small to large which of course can be quite different. The needs of a fast food chain are not the same as those of large supermarkets of course.
Automatic, multi-store analytics and reporting increase efficiency. Digital diagnostics help reduce energy output and ensure no energy is wasted.
The EcoXpert partners who chose to follow the retail specialization help us deliver and support the solution worldwide and we help them enter the market or broaden their reach and expertise if they are already active in one or more of these retail segments.
Clear. We’ve had interviews with some of your colleagues at Schneider Electric before who are responsible for Certifications such as BMS (Building Management Systems) and Critical Power to mention just two. Yet, with retail we have a specialization. What’s the difference?
Marine Petry: For starters, specializations are different in the sense that companies who want to follow one or more of these additional training paths already have a certification.
Secondly, the trainings themselves are different and less technical. While there is attention for the various solutions for the verticals addressed with a specialization, overall the trainings are more commercially oriented.
In other words, partners already need to be a certified EcoXpert and have technical skills, project training and expertise in their domain.
From building management, light & room control and connected power to refrigeration
What certifications would a partner, that goes for this retail specialization, typically have? Building management? Others?
Marine Petry: We are mainly looking at EcoXperts with certifications in building management, light and room control or connected power.
There is also a new certification coming soon: refrigeration. System integrators in refrigeration are the historical partners of Eliwell, a brand which Schneider Electric acquired when acquiring Invensys. They are experts in temperature controllers for all possible refrigeration environments, including supermarkets, refrigeration distribution, and self-contained fridges.
Each of these partners come in with their expertise and knowledge. A BMS partner will be an expert in EcoStruxure Building Operation. A lighting and room control partner will be specialized in KNX and so forth. While we train them on our EcoStruxure for Retail value proposition they all have most of the skills and we simply apply them to retail.
The requirements to enroll in the retail specialization have been kept easy because we want to give our partners the opportunity to join as it’s a very promising and dynamic market. Obviously, they need to have an electrical accreditation but most of them do. And they just need some experience, or at least some willingness to do some retail projects.
Real-time data provides critical, money-saving alerts on things like food safety issues and refrigerant leaks that lead to inventory loss.
Concerning the non-technical aspect of the training that is the main part we empower our partners with skills on how to raise retail customer’s interest, how to face and understand their challenges, and the key food retail regulations and retail trends.
EcoXpert isn’t just a partner program but also a community that brings together various types of partners to exchange ideas and to work together on projects. How is this in retail, considering the buying journey of supermarkets regarding the solutions you offer? Do they typically work with a lead partner who has a network of specialized partners or do they work with different partners?
Marine Petry: They typically have different partners so it’s quite a complicated ecosystem. One of the main reasons for the retail specialization obviously is to enable us and our partners to do more in retail.
And EcoXpert indeed will play its role as a community too. You can, for example, imagine that if we have a supermarket project that requests various solutions such as refrigeration control, power management and others, we’ll aim to bring together the various experts needed to ensure the integrated approach that is needed and enables an overall view. This is also part of the training: create a network between the various types of EcoXperts that want to be active in retail and get to know each other despite their different expertise so they can collaborate on projects.
Providing the intelligence to store managers to run their facilities
How do the solutions of Schneider Electric help retailers optimize their operations and offer better customer experience?
Marine Petry: In the first place we make sure that store managers can focus on their customers by giving them the intelligence they need to run their facilities and avoid issues.
That’s essentially what we enable with our application for the store manager, Facility Expert for Small Business. It makes the store manager aware of a potential issue in real time, and sometimes even before it occurs. This could be a problem with a refrigerator, an electrical outage and so forth.
Analysis of multi-store data helps increase visibility, meet consumer sustainability demands and improve the reputation of retail brands.
Having this information saves a lot of time because the store manager doesn’t have to focus on all these potential issues, whether they are small time-consuming ones or very impactful issues whereby, for example, food would have to be thrown away or the store or restaurant would even need to be closed because of maintenance issues.
This aspect is all about business continuity with a very convenient way to manage the store by having a full view of it and, obviously, building automation areas such as lighting, HVAC and others are also key in optimizing customer experience.
Enhancing the shopper experience: moving from back-end to front-end
Marine Petry: However, regarding the consumer we want to take it a step further through partnerships. We’re, for example, talking with Fujitsu that has many solutions regarding the customer front-end that make a perfect fit with what we do in the maintenance and facility optimization part.
Examples include a smart self-checkout application with a camera that is able to recognize each product and learn through artificial intelligence which enhances shopper experience and reduces theft. Another solution is a software application that can analyze the behavior of people in the store, respecting privacy regulations such as the GDPR (editor’s note: the EU’s Regulation for personal data protection) and enabling to optimize the store in function of that behavior.
A third example is flow tracking to analyze which parts of aisles are empty and where all the shoppers are, enabling the retailer to optimize his flow, his merchandising and the location of goods. It’s still early days and discussions are ongoing, but we’re absolutely committed to broaden our overall offering with partners for the retail segment, on top of our refrigeration and facility-related capabilities.
Back to the retail specialization. It gets launched in Australia first, correct? Is this the case for all the subsegments?
Marine Petry: Australia is indeed the first country to have the retail specialization, starting end August. In Australia we’re training around ten to fifteen EcoXpert partners. Israel will follow soon after with a handful and from there it will grow for all countries based upon their partners’ retail project activity and willingness to do more retail business.
The subsegments I’ve mentioned before are all those we can cover with our retail offer. However, it’s indeed up to the countries to cover a few or all of them as there can be quite some differences in these subsegments per region.
For a chain manager or facility managers, maintaining large networks of hundreds of retail stores is a major challenge. They need to help the store owners ensure business continuity, that the power is on, lights are dimmed properly, the temperature in the store is comfortable, fridges, ovens are working, cash registers are connected, and most importantly that customers have the best shopping experience.
The impact of electric vehicle charging on supermarkets and gas stations
Among the several solutions that are also offered for retail, are certified electric vehicle (EV) charging solutions, enabling supermarkets and stores to prepare for the future of mobility. Is this something retailers are starting to implement today?
Marine Petry: Yes, there are requests, mainly coming from big supermarkets that still have a car park. It’s also a topic for the gas stations of the future since for many oil and gas brands EVs are poised to change the way they organize stations.
It takes more time to charge an electric vehicle than to fill a tank and in the 20 minutes or so charging takes, people want to do something.
They might want to go to a convenience store next door or do more shopping and, in fact, in many cases, the gas station itself will start becoming a mini retail center. People will want to do some shopping, buy a magazine and have a coffee, perhaps work whereby they need a table, the list is long.
Yet, there is indeed a whole concept to rethink here and for oil and gas brands reality today already is that they have higher margins on that cup of coffee than on the petrol. So, it’s definitely an opportunity for them to make the retail part of the gas station a better source of revenue than it might already be today.
Probably that will also depend on the context, for instance with differences between gas stations close to supermarkets or commercial centers on one hand and those in remote areas on the other.
Marine Petry: Exactly. The business model will be different, depending on whether the gas station is on a highway, in a city center or next to a supermarket. Behind these different business models will also be a lot of IT.
You can imagine that people will want to pre-book a charging slot for their electric vehicle to use their time in an optimal way. I think there will be quite some Internet of Things services and applications coming with this impact of electric vehicles on retail in general and gas stations in particular.
An integrated retail facility management approach using the power of IoT
Let’s talk solutions for retail, more specifically, the IoT-based integrated retail management solution EcoStruxure for Retail. On the Schneider Electric website, a distinction is made between some EcoStruxure architectures for retail, respectively for supermarkets, convenience stores and specialty retail, and there are other applications as well. Can you tell us a bit about them?
Marine Petry: The differences among others concern the size of the retail operation and facility management. A supermarket is obviously bigger than a fast food restaurant or a convenience store and we might need a Building Management System (BMS) whereby the refrigeration monitoring and control is directly integrated into the BMS.
IoT adoption allows the monitoring and control of all the technical sub-systems in a shop, enabling pro-active maintenance and avoiding potential issues and revenue loss. For instance, monitoring the refrigeration units in a convenience store avoids any food wastage if the unit fails and helps with regulatory compliance.
This is actually a new approach for many supermarkets since traditionally they have different people who are responsible for the BMS than those who take care of refrigeration.
Moreover, the integrators don’t often talk to each other and when something doesn’t show up on the BMS there can be some discussions on who is to blame. So, typically it’s not integrated.
However, Schneider Electric is the only one in the market today that can fully integrate all the sub-systems within a facility including the BMS, the refrigeration, lighting, energy, power, UPS and much more.
We’ve made sure that for supermarkets it’s easy to install, easy to program and not too expensive. Since we’re used to do projects for very large and critical buildings, we can package our solution for smaller buildings such as supermarkets and bring the refrigeration system in so everything regarding the building can be monitored using EcoStruxure Building in a highly cost-effective way.
For smaller sites where a full BMS is not needed we have Facility Expert and Facility Expert Small Business, where retailers can connect the energy and the temperature from the refrigeration; the fridges and cold rooms; to the Facility Expert and to Facility Expert Small Business app.
Both apps show different parameters for different stakeholders. One is for the store manager who wants to see that all the fridges are at the right temperature and wants to generate his daily temperature report to be compliant with the HACPP regulation. The second app is for the brand facility manager or operation manager, who typically wants to have a view of a large number of stores, be able to benchmark them and see why one store is costing much more than another one in terms of energy etc.
Micro data centers in retail
Micro data centers are also mentioned in the retail solutions portfolio. With edge computing being more important Schneider Electric is focusing a lot on these micro data centers nowadays. How are they used in retail?
Marine Petry: Since one or two years our IT division, Secure Power, which is mainly coming from the acquisition of APC and has a data center offering, indeed has a micro data center offer that is very well suited for retailers.
To give an example of an application: in Brazil, a famous global restaurant chain has micro data centers in all its stores. The flow of data coming from orders customers make using screens needs to be treated very fast so essentially, they needed these micro data centers for edge computing, in combination with the cloud.
It’s really another illustration of how the EcoStruxure for Retail is not about reinventing the wheel but leveraging existing offers that Schneider Electric has in various divisions, from refrigeration to building management and data centers, make them easy to install, easy to integrate and offer them at the correct price with additional partnerships on the horizon. And it’s on all this that we train the partners through the retail specialization.
Thanks, Marine, and all the best with the launch!
Disclosure: this is a sponsored interview in the scope of the commercial collaboration between i-SCOOP and Schneider Electric, containing links to solutions and the partner program of Schneider Electric. EcoStruxure is a registered trademark of Schneider Electric.