How IoT can change retail

How IoT can change retail

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There are many reasons why every upcoming programmer should consider becoming an internet of things developer. First, with the advent and inclusion of IoT technology in the retail industry, the portfolio items embracing this technology have immensely expanded resulting in massive demand for these professionals.

Secondly, over the last few years, the retail industry has received the much-needed momentum to enhance sales. Instead of relying on an e-commerce website to boost sales, more and more businesses are riding on Virtual internet connectivity to create intelligent stores, customized shopping experiences, and remote product interaction, which has expanded the horizons of this technology.

In this article, we are going to learn what IoT, industries using this technology, and the influence it’s having on the retail industry.

What is Internet of Things?

Commonly referred to as the Internet of Things, its a system of interconnected computing devices, digital appliances, and objects that have unique identifiers and capable of transferring data within the network without human intervention.

Using embedded technology, IoT pushes internet connectivity beyond the typical day to day devices to a wide range of devices enabling them to interact and communicate with the external environment via the internet.

Examples of objects that qualify to be categorized as IoT systems thermostats, cars, connected security systems, electronic appliances, alarm clocks, vending machine, and many more.

The Growth of IoT

A decades ago, no one could have imagined that a single technology could impact the world in more ways than what IoT has done today.

In 2017, estimates showed that the global IoT market would grow at a rate of 28.5% annually to reach approximately $457 Billions by 2020. That notwithstanding, It is estimated that by the year 2025, more than 75 Billion devices will be able to communicate with each other.

During this growth period, 3 major sub-sectors will have the largest market share; Smart Cities with a 26% share, closely followed by Industrial IoT and Connected Health with 24% and 20% respectively.

These numbers are just an indicator of the massive potential of IoT and how much industry players are willing to pump into this technology.

Industries that Have Already Embraced IoT

It’s hard to find an industry that hasn’t felt the impact of IoT by now. Many companies have realized the myriad benefits of offering and embracing IoT retail solutions. All they need to do now is to convince customers why their sandbox is the best compared to the rest. For example, Amazon is already wooing their customers with Prime whereas Apple has jumped in with iOS, OS X, and other glossary products within their catalog.

In recognizing that data-driven analytics is important in improving customer experience, retail companies have heavily invested in IoT technology. Using this collected data, they can reach out to potential customers with customized packages which have proven to be a great concept in market penetration and boosting sales. For example, Amazon is developing a delivery drone which is expected to revolutionize retail delivery methods.

IoT is sufficiently represented in the healthcare industry. The technology has been used to develop wearable technology that monitors body conditions irrespective of time and location. With the encrypted sensors collecting and relaying the data to physicians, patients can go about their business knowing they are being remotely monitored.

The manufacturing industry isn’t left behind either. The industry is using smart machines and robots to produce goods efficiently especially in areas where there are repetitive tasks. As a result, there is improved efficiency and reduced redundancies.

How IoT Can Influence and Change the Retail Industry

Over the past 2 decades, the retail landscape has undergone dramatic changes. This has provided retail companies with an innovative opportunity to collect and analyze data for target marketing across various channels.

There is also a growing need to increase customer loyalty incentives which have seen the uptake of IoT within the retail ecosystem in an equal measure.

Global Market Insights has recently released a forecast report citing that IoT in the retail ecosystem will surpass the $30 Billion mark by 2024.

Another report by Verizon shows that 77% of retailers are strongly convinced that IoT platforms and solutions can greatly improve customer experience. 89% of those already using IoT solutions feel they have seen improved customer preferences insights.

Understanding Shopper Psychology

Initially, e-commerce marketing was a preserve of large online retailers like Amazon and eBay. This is no longer the case as retailers are also embracing smart devices like Beacon to observe and learn the shoppers’ psychology. These smart devices can only continue being smarter and sophisticated as IoT technology continues to improve. For example, some retailers have installed tracking systems to track a customer right from the doorstep, their path, and the products they are interested in.

Armed with such information, retailers can pinpoint the demographics attracted to certain store sections and use it to overhaul the displays and layout spaces for a seamless shopping experience. After all, just like real estate, strategically placing and displaying products is everything.

Eradicating Checkout Lines

Many retailers are assessing the possibilities of eliminating the checkout lines using IoT. To some extent, this has worked when the first ever checkout free grocery Amazon Go was unveiled early this year. Basically, a customer uses an app to check into the store and pick the needed items.

Of course, the concept is still in the infant stages. However, once proven viable, it could dramatically transform the way brick-and-mortar retail shops operate.

Smart Shelves and Fleet Management

Both small and big retailers face one common denominator, having enough inventories in the right place and at the right time. However, IoT has shown the potential of eliminating this vexing problem by taking RFID technology and using it to improve inventory tracking for retailers. For example, Macy’s uses RFID tags that can be read using handheld RFID readers to keep track of all the products within their stores. Previously they had deployed the same technology to monitor their supply chain. This combination of product-location information rounded off with additional store data could easily turn into the magic bullet for retailers in monitoring the whole inventory chain.

The internet of everything coupled with IoT can also play an important role in improving fleet management. By establishing a robust connection between retailers, manufacturers, and transport companies, these stakeholders can then interface their systems to share information making fleet management easy.

Beacons

Beacons have been touted to spawn the next retail revolution given their aptness in customer attraction. These peculiar Bluetooth transmitters send push notifications to customers’ smartphones within the business range notifying them on available offers and discounts. Given they miniature size, they can be easily attached to counters or walls.

Beacons are also relied upon by retail companies in data collection through tracking the navigation behaviors of customers. Once coupled with information from other mobile apps, retailers can easily boost sales and increase customer loyalty by targeting the appropriate shoppers.

Generally, this is how beacons are programmed to work. Together with other smart devices and sensors, digital signages collect data. Data collation is then done to determine when customers flock to purchase particular items plus many other aspects. Using IoT technology, personalized promotions are then created using the collected data and played during this period.

Digital Signages

Digital signages are helping retailers create a personalized shopping experience. Signage solutions like Ipad screens, intuitive touch screens, and digital-out-of-home applications can be used by retailers to impress their customers hence boosting sales.

They can also be used by retailers to push price changes and ads in real-time. This is because they can be programmed using the accumulated contextual cues from the customers to establish connections. As a result, marketing expenses for the retailers which would have otherwise gone into advert placement on the traditional print media are eliminated.

Creating Smart Stores

Most people are familiar with smart homes, but retailers are also exploring the possibilities of running smart stores give the massive money-saving opportunities.

Integrating HVAC systems, security, and lighting with IoT technology has proven feasible in terms of energy costs saving. Automatic On/Off lighting in some areas depending on how that particular space is being used or even setting the temperature inside cooling systems may seem like a yawn–but the cost-saving benefits cannot be downplayed.

Final Thoughts

Whether in an online business or the typical bricks-and-mortar retail business, IoT has positively impacted the business world. It is totally changing retail marketing and everything about it. Instead of the traditional marketing methods, digital platforms are riding on IoT to target audience through custom-made marketing and shopping experience. As we speak, IoT technology is on the radar of big companies as there are multiple innovations being created around it. Early-gamers do recognize that failing to explore the valuable opportunities of IoT may mean being irrelevant in the future, while the late-gamers are slowly joining the bandwagon. With a strong emphasis on enhanced customer reach, improved user experience, and speedy supply chain operations, IoT will drive retail business a long way.

To know more about the importance of IoT in businesses today click here.