The landscape of the retail industry has been revolutionized thanks to the Internet of Things (IoT). From the comfort of our homes, all we need to do is power up our mobile devices and instantly connect to any virtual store on the planet. Unlike physical stores, the internet has granted us access to view and purchase a virtually unlimited number of products and also the option to have those purchases delivered to us via drone. This reality will soon be widespread as the ever expanding world of IoT is equipping more and more things around us with sensors that enable data transmission and communication.
Game changer for retailers
Retailers are realizing the significance of incorporating IoT programs involving various sensor data management tools to carry out analytics, devise better retail strategies and use data-derived insights to aid in decision making. In today’s digital age, consumers are always searching for information about products and services they are interested in to help them make more informed purchasing decisions, and this is where IoT becomes a game changer for retailers. Those who incorporate IoT will ultimately develop a superior consumer and supply chain intelligence that will better facilitate seamless shopping experiences and logistics systems. This notion ultimately signifies a transformation of the entire retail industry.
Cultivating Personalized Shopping Experiences
According to Frost & Sullivan, retail transactions are projected to reach almost $23 trillion by 2025 with a whopping 81% accounting for “The New Brick and Mortar” – an amalgamation of online and physical stores. While virtual stores are aplenty, it’s safe to say brick-and-mortar will not go extinct. This is especially true in the case of perishable goods where customers would want to physically see and feel these items before purchasing them. Amazon’s grocery store AmazonGo allows customers to walk in, pick up anything and walk out. Purchases are tracked via IoT devices and synced with a mobile app that charges their Amazon account.
A survey by retail traffic counting company, SMS Store Traffic, found that 86% of customers want a better shopping experience and are willing to pay 25% more for it. Many brands are indeed recognizing the significance of IoT in facilitating superior experiences. Walgreens uses IoT to build a 3D map which helps customers locate in-store items. Target uses beacons to tailor location-specific promotions and pushes them to customers walking nearby. In the near future, customers will be able to access product information, reviews, social media commentaries, and check product availability through their mobile and wearable devices. Apparel brands Rebecca Minkoff and Ralph Lauren utilize IoT technologies like smart walls that suggest product options such as sizes and colors to customers as they walk into the store. When customers proceed to the dressing rooms, they are greeted by smart mirrors that
allows them to browse for more options including items styled with different looks, colors and sizes as well as additional product pairing recommendations and different lighting options. At apparel store, Hointer, customers can use a mobile app to order different sizes of clothing they wish to try on. The clothing will be sent to the dressing room they’re in through a robotic cable system. They may also purchase the item on the spot through this app — without having to leave the dressing room — which enhances their shopping experience. Retailers can collect data on what customers try on, their preferred pairing choices, and time spent deciding. Retailers also face issues such as sudden demand surges. These challenges can be addressed through the utilization of IoT.
Leveraging IoT to transform operational outcomes
The Frost & Sullivan report “A $22 Trillion Economy Depends on It: How Big Data Powers the Retail Enterprise” shows that the retail industry is confronted with a huge $1.75 trillion loss per annum due to the “Ghost Economy” – gaps in data that results in overstocking, out-of-stock items, and returns. Retailers also face issues such as sudden demand surges.
These challenges can be addressed through the utilization of IoT such assmart shelves and RFID solutions to track inventory, digital price tags that adjust according to demand, and sensors that monitor the expiration date of perishable goods, sending restocking notifications to the suppliers when necessary. Online retail giant Alibaba is venturing into brick-and-mortar and has plans to integrate a Click-and-Collect mechanism. Customers can view the inventory of physical stores to see if the items they want are in stock or are on promotion. They can then purchase these items online and schedule convenient times to pick up these items. Not only does this leads to efficient inventory management and faster delivery times, it also allows Alibaba to derive invaluable insights into the demands and preferences of its customers and adjust its inventory accordingly.
Amazon‘s IoT-enabled Amazon Dash allows customers to order items such as groceries, health and beauty products, laundry detergent, baby products, and pet food that will be delivered with a mere push of a button.
After-sales services such as warranty tracking and traceability is fundamental, particularly when retailers look to build long-term relationships with their customers. Retailers may track their products with IoT and gain real-time insights to detect glitches, warranty concerns and optimize product development and quality control. Meanwhile,
embedded sensors can be assimilated to track premium items in the event of theft. General Electric utilizes IoT to keep track of its turbines, jet engines and wind farms. They save cost and time by obtaining data to
ascertain the precise time, say, a wind farm requires maintenance, as opposed to technicians making intermittent time-consuming trips as part of scheduled maintenances.
Thanks to the implementation of IoT in the ways illustrated above, the future of retail is looking positive and the heights to which industry players can attain by incorporating IoT and data management is virtually limitless. However, retailers would require a comprehensive data tool with predictive and prescriptive analytics to analyze massive amounts of real-time data. Fusionex Big Data Analytics is a robust end-to-end platform that has the ability to determine pertinent and actionable data which would otherwise be overlooked and to harness this data to enrich all areas of retail and their outcomes.