Wal-Mart Stores Inc. has filed a patent application for a platform to track products in consumers' homes through the use of sensors that could trigger automatic replenishment, suggest additional items to buy and help the retailer collect data regarding consumer habits.
The patent application, titled "Retail Subscription in Internet of Things Environment," was filed with the U.S. Patent and Trademark Office last October and published Thursday. In the application, Wal-Mart describes the platform as a system and method for item replenishment.
"The present concepts relate generally to a retail subscription model, and more specifically, to the use of an Internet of Things (IoT) environment for determining where a consumer product requiring replenishment, replacement, or upgrade may be automatically delivered to the consumers or where new or additional consumer goods may be recommended," Wal-Mart said in the application.
According to the filing, Wal-Mart's system would incorporate sensor technologies on products and inside homes, including bar-code scanners, Bluetooth, radio frequency, infrared or near field communication devices. The system could monitor how much a product like milk is being consumed, whether it has reached the expiration date and automatically reorder the item when needed.
The technologies could track where items are located within a home and when they are used or moved as well. The number of times a toothbrush is picked up could help determine how much toothpaste is being used and when the tube should be replenished. The number of times a shirt is put in a washing machine could help predict the durability of the clothing on the basis of data from the manufacturer, which would then lead to a new shirt being ordered and delivered.
Wal-Mart also could use the data collected for marketing, advertising and cross-selling additional products to consumers. For example, a consumer who orders milk through the system could also be alerted to other recommended items like cookies or chocolate syrup.
"The more and more information that organizations have to predict when I am going to need that and just send that to me, that is very critical right now," said Annibal Sodero, an associate professor at the University of Arkansas Sam M. Walton College of Business. "So the one who can use that information and anticipate the consumer needs is going to win."
The system is the first of Wal-Mart's more than 800 patent applications to focus on the "Internet of Things," according to data from research firm CB Insights. The Internet of Things refers to a network of Internet-connected devices that are able to collect and exchange data. The firm also said the submission is among the first patent applications submitted by Wal-Mart that branches into shoppers' homes, comparing the system to Amazon Dash "buttons' that quickly lets customers reorder items.
Amazon introduced the Dash button, a one-touch reordering system, roughly two years ago. They're now available for about 300 consumer products.
"Walmart's system would require even less effort than Amazon's," CB Insights wrote in a blog post published Thursday. "While Dash buttons still require users to press a physical button separate from the product (easy though that may be), Walmart aims to integrate IoT into the products themselves for automatic re-ordering with no user input at all."
Wal-Mart declined comment on the patent application. There is no guarantee a system will be introduced by the retailer. Companies often file patent applications for products or services that are never adopted.
But Wal-Mart is making hefty investments in technology under Chief Executive Officer Doug McMillon to meet consumer demands. McMillon said customers expect companies to be "innovating all the time."
"We've got to move faster, we've got to make our customers' worlds simpler, and we're excited about doing that and feel like we've just started to make some changes that will help us win in the future," McMillon said during the Bank of America Merrill Lynch 2017 Consumer and Retail Technology Conference in New York earlier this year.
Sodero predicts Wal-Mart will introduce the system at some point although it's hard to know how quickly it can be accomplished. He believes that receiving a patent for the system is important for the retailer.
"The Internet of Things will be part of our daily lives as consumers," Sodero said. "So one way to interpret what they're doing is they really think they need to block any other companies from obtaining this technology because Amazon already has it. They found a variant of this technology, and they want to play in that space, but just make sure they are entering and nobody else will."
Business on 05/06/2017