Cloud and IoT Technologies in Grocery Retail

By: Jozo Džakula, CIO, Konzum

Jozo Džakula, CIO, Konzum

Lately everybody talks about new technologies, digital transformation, cloud, IoT, Big Data… But what does it really mean, and how it helps in grocery retail daily operations? Online grocery sale is still very small portion of total sales, which means grocery stores are here to stay. Daily operations are not much changed. So, how can we use these new technologies to help store associates do daily work easier?

Cloud technologies are available for many years. Nowadays, cloud is easily used. Many business systems are available as cloud services, which makes them easy to configure and use.

Same goes for IoT. Since connectivity became omnipresent, technology companies are seeking a way to connect everything to the Internet. We have heard of plans to connect home refrigerator to the Internet. Today, there is plethora of home management systems like alarms, sensors, HVAC management, and cameras. But in grocery stores, we haven’t seen much of IoT technologies in use.

Grocery store’s operations haven’t changed much. On top of that, there are many other processes in stores connected with food safety compliance. Since food safety is number one of every grocery retailer list, compliance processes are quite important.

"Since connectivity became omnipresent, technology companies are seeking a way to connect everything to the Internet"

The most time consuming process in food safety compliance is refrigerator temperature control. Twice a day, each refrigerator needs to be checked for the temperature. Supermarket employees are spending in average two hours per day just to check temperatures. On top of huge time spent, there is cost of rotten food in case of refrigerator fault and cost of refrigerator repair.

This is perfect case to utilize IoT and Cloud technologies to make daily operations in grocery store easier and more efficient. The idea was to deploy temperature sensors in refrigerators to get three main benefits: automate temperature readings to save working hours, recognize incorrect temperature so we can alarm store personnel to save food and reduce cost of rotten food. Third benefit was to decrease maintenance costs with better preventive maintenance. After the system recognizes there is something unusual happening with temperatures, information is sent to maintenance team for refrigerator inspection and repair.

After checking available systems, we decided to use system from technology startup KnowIT. They have developed temperature sensors, Cloud system for recording readings and analysis tools. We have been able to achieve all three planned benefits.

Store employees are not wasting any more time on checking temperatures since sensors are doing it more often and much more efficiently. We have setup sensors to read temperature every hour which gives us 24 readings per day instead of only two. Data is sent to the Cloud system three times per day if temperature readings are in expected range. If the readings are out of expected range, data is sent immediately so the system is able to alarm store employees and maintenance.

Based on hourly temperature reading, Cloud system creates usual temperature profile for each type of refrigeration equipment using machine learning algorithms. This functionality proved to be very useful for better recognition of unexpected temperatures. For instance, most refrigerators have no frost functionality which means that refrigerator will increase temperature out of normal range and after few minutes get temperature back. Without proper profile of no frost characteristics, system could be alarming for no reason causing even more work for store employees.

In this case, IoT, Cloud, and machine learning have brought real life changes to grocery store operations. Store employees are not wasting time for the job technology is capable of. Saved time is invested into better customer service which produces better customer experience. On top of that, there is less food waste and savings on maintenance costs.

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