TrendForce Anticipates Revolution in Shopping Experience with Integration of O2O and IoT

As applications of Big Data and Internet of Things (IoT) technologies widen, online-to-offline (O2O) will become the prevalent business model. The latest research by Topology Research Institute (TRI), a division of TrendForce, finds the falling prices of IC components drive down the costs of sensors. This trend in turn accelerates the developments in the IoT industry related to technological advances and entries into different vertical markets. Examples of such markets include smart home, smart energy, intelligent transportation, smart factory and smart shopping district. 

The drive to introduce micro-location and push notification systems into different applications has been gaining momentum since Apple launched its iBeacon technology in 2013. According to TRI’s Senior Research Manager Kelly Hsieh, one of the major developments in the IoT industry is using beacon hardware together with mobile apps to conduct Big Data analyses. With more beacon hardware being installed in the next few years, TRI expects the technology will spread to various hubs within the retail channels. Major retail companies around the globe have already used the beacon systems to guide shoppers inside their stores and send promotional ads to shoppers’ mobile devices – from Walmart, Macy’s and McDonald’s in the United States to NTT DoCoMo in Japan. The O2O model raises consumers’ willingness to purchase through this integration of the physical stores with the Internet. Currently, some districts in New York have stores outfitted with Bluetooth beacons. Mobile users will thus be able receive instant messages from these business venues when they are in transmission range. This kind of services are expected to extend to the rest of the U.S. in the near future. 

Smart commerce revolves around consumer behaviors, and the advances of Big Data and the Cloud technologies have made retail and warehouse networks more intelligent. These forces in turn spur the development of smart shopping districts in cities. Countries like the U.S., France, Japan, South Korea and China are actively rolling out plans to provide people more shopping information within a city via micro-location and push notification, thus creating a smart shopping district experience. Brick-and-mortar stores are also offering their customers one-stop shopping solutions with cloud-based POS systems and combining shopping experience with virtual reality. All these greatly hasten the integration of the smart commerce value chain. 

Nonetheless, smart commerce value chain are facing many challenges such as the lack of assessment standards and case studies. Moreover, tech startups have yet to gain the trust of large retail businesses. In the technical aspect, the penetration of 4G is limited and there are still not enough micro-location systems being installed. Addressing these issues requires further integration of the ICT sector. The most critical problem, however, lies in the ability of smartphones to receive micro-location and push notification signals anytime. Using location services involves more frequent transmissions of wireless signals and can quickly drain smartphone batteries. While these factors will influence the application development of micro-location and push notification, Hsieh believes the outlook for these technologies is positive in the long run as they become a trend in indoor, interactive applications.