There are various ways in which IoT technology is transforming our retail experiences. Here we discuss seven of them.
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Picture this. It is a certain hour of the day and the number of customers in your store has started to increase. The investment in IoT retail devices the store owners made means sensors have read that increase and adjusted the air-conditioning system accordingly. Meantime, the number of items available from a particular brand is almost finished. Through application software, sensors installed on that shelve have signaled to the store managers the need to re-fill.
Meantime, customers are walking around the retail store with a digital shopping list on their smartphones. They are alerted when a product they require is available nearby. After purchasing, that customer receives a personalized discount on his next purchase, along with offers based on their purchasing patterns.
This scenario as a whole may not be a reality yet, but it will probably be the type of in-store retail experience we will have in the future. It is the transformation of the traditional retail store into an IoT store. This is thanks to evolving IoT for retail technologies and the ability to create smart devices that are connected, and can provide us with enhanced data and the means to significantly improve customer experience.
Benefits of IoT in retail.
IoT and its innovative applications are revolutionizing many industries and the retail industry is one of them. With nearly limitless possibilities, the Internet of Things can be applied to the various sectors of retail for the benefit of both retailers and customers. In the next few years, physical devices capable of being connected to the internet will continue to rise. It is estimated that by 2030 the total connected units will reach the 30 billion mark.
There is a golden opportunity for retailers and marketers to innovate their businesses smartly and efficiently. IoT can help reduce inventory errors, enable a more optimized supply chain management, decrease costs and enhance customer experience. Big data gathered can be key to profound insights into shopping patterns and the overall behaviour of customers.
As we discussed in our article on all things IoT, the Internet of Things is a network of interconnected digital endpoints such as connected devices, networks, servers, IoT applications, etc. all communicating with each other. IoT is an umbrella term for a broad technological ecosystem that comprises technologies such as artificial intelligence, cloud computing, cyber security systems, advanced analytics, big data, machine learning, and so on. The ‘things’ that makeup IoT systems all share a common trait - they are IoT devices with the ability to transfer sensor data over a network,
In theory, anything can be connected to the Internet using IoT technologies, whether it is physical objects or living creatures. As the number of retail-related businesses adopting IoT technology to improve their products and services increases, the prediction is that an IoT-enabled retail market could be worth up to $94 billion by 2025. By now, the question is not, 'what can you connect' but rather, 'why should you connect'.
There are various ways in which IoT technology is transforming the retail industry. Let us have a look at 7 of them to help you understand how IoT could improve your retail business.
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1. Turn your store into a Smart Store.
The recent pandemic has given rise to a steep increase in online shopping. Amazon visits rose from an average of 2 billion monthly visitors in 2019 to a record 2.9 billion by December 2021. Faced with these numbers, stores closed for months on end, and increased difficulty in finding workers, retailers have had to rethink their overall strategies, speed up digitization and invest in more IoT solutions for their retail stores.
Yet the picture in the online retail world is not all rosy. Ever-changing consumer habits and pressures for fast-track delivery are some of the factors that can still hold sellers back from making online shopping thrive even more. So what is the solution?
The valuable data generated from retail IoT systems give retailers insights that allow upgrading merchandise placement strategies, inventory management, and smart packaging. It also allows them to connect with customers like never before, using data in real-time whilst offering content that feels more authentic and close to the consumers.
Manufacturers are wrestling with what their digital-first customers want for fast, efficient, and convenient eCommerce, but those same consumers, living in the digital age, produce daily an abundant amount of data retailers can use. IoT technology enables the gathered data to be analyzed in real-time such that necessary changes to improve the customers' experience is implemented in the shortest possible time.
2. Customer Experience Monitoring.
Smart Feedback push buttons offer a good way of collecting feedback from customers. Multiple color-coded buttons placed at strategic locations within a retail store would allow customers to rate their shopping experience at a touch of a button. Smart digital signage is another way of improving the customers' experience. With IoT, digital signs can be controlled remotely in real-time to display promotions and can be integrated with IoT devices to display messages to the customers.
Another option is the installation of in-store IoT sensors. These can track customers' journeys, analyze their habits and share insights with the marketing team. By placing IoT sensors around the store, managers can better understand which zones are the most popular and as a result place products according to their strategic needs. User activity heat maps help understand where items for sale are better placed, optimize layouts, and record shopping trends over time. The data gathered can then be used to better organize store layout and create a system of intelligent suggestions.
Ultimately, IoT can transform your traditional physical shop into a smart experience that can compete in what is fast becoming an online-first, social media-oriented shopping world, through improved customer experience and reduced expenses.
3. No more just display shelves.
In many stores, a lot of employees’ time and energy is often invested in keeping track of items' availability on shelves, their proper condition, ensuring they’re never out-of-stock, and checking that products aren’t misplaced. IoT in supermarkets has seen the rise of Smart Shelves, IoT technology automates the task of monitoring products.
A simple Smart Shelf has three common elements - an RFID tag, an RFID reader, and an antenna. A microchip on a tag is transferred thanks to the help of an antenna to an IoT platform where it’s processed by a reader. In addition, Smart shelves are fitted with weight sensors and use RFID tags and readers to monitor the products on display whilst helping to re-stock shelves.
Smart Shelves inform you when items are running low or when items are placed on the incorrect shelf. This makes your inventory process cost-effective and more precise, whilst saving much-needed time on the tedious process of stock checking and counting. All the data collected by smart shelves during the day is later shared with a store manager to provide customer-related insights and stock data, reducing out-of-stock scenarios that can cause customer walkouts.
Additionally, each RFID tag is connected to a reader, so Smart Shelves can detect in-store theft, hence saving you money on security personnel and cameras.
4. Personalized Customer Discounts.
The pandemic has given us a taste of things to come, with the increase in online shopping and deliveries. That same rise in online shopping, with its flexibility and variety of options, has given customers the ability to feel more empowered than ever before to drive the change they want, as they get more control over their shopping experience.
With the growth of the internet of things, customers will increasingly enjoy a smart shopping experience, which is what both retailers and customers ultimately aim for. Frequent returning customers generally expect some sort of privilege, whether in the form of personal discounts or rewards that address their loyalty. Personalized deals, assistance finding products, and easy checkout are just some of the ways retailers are staying connected with customers using IoT technology.
Think of how with IoT you could set up sensors around the store that send loyalty discounts to certain customers on their smartphones about products they have been looking at online, or as they are approaching specific products you would like to promote. Rather than offering general discounts on a wide variety of products, you can tailor each discount using IoT to maximize your conversion rates.
5. Supply Chain Monitoring.
IoT supply chain monitoring is becoming more and more popular and is very beneficial in the retail industry. The use of IoT in the retail industry is closely connected to GPS and RFID technologies. These help brands track products through the entire supply chain process. Every step along the way, from production to storage to product distribution to end-users, items can be tracked and monitored.
This enhanced monitoring throughout the whole supply chain has led to improving quality control, product traceability, and customer service. The latter is achieved by providing the customer's ways of tracking their purchases and informing customers when a particular product will be back in stock. The advent of 5G is particularly significant, as this will enable the connection of devices at super speeds and allow the transfer of large quantities of data.
That data can be used to improve the quality of transportation moving forward, and act in real-time should a product be stored in a damaging way, hence avoiding losses. IoT also helps in minimizing any possibilities for item theft, counterfeiting, or any other safety issues. Whilst in terms of online shopping, insecurities regarding product delivery time and safety remain, enhanced monitoring has enabled retailers to increasingly involve customers in delivery processes.
This plays a vital part in enhancing customer fulfillment and experience by improving supply chain efficiency with its data-driven automation, sensors, and analytics that deliver unprecedented supply chain visibility and transparency.
6. Retail Cost Reductions.
IoT supply chain monitoring is not limited to location tracking. With RFID and GPS sensors, you can use the Internet of Things to obtain precise data, such as the temperature at which an item is being stored, tilt, humidity, or how long it is spending in transit. In addition, tracking your retail assets reduces costs by lowering the number of stolen or lost assets that have to be replaced. More data enables more insights, which if used correctly, transforms itself into innovations and reduced costs in the supply chain associated with product waste and loss.
Low-cost IoT devices can be installed on assets like shopping carts, baskets, tools, and pallets to prevent customers and workers from carrying them past a checkpoint or taking them out of the premises. By implementing this system, it would also be possible to locate lost or stolen assets and easily maintain asset and inventory records.
7. Improved Customer Experience.
Overall, the use of cameras, retail sensors, and tracking technology together with advanced analytics, means customer journeys and needs are better understood. In turn, this leads to more proactive decisions as well as an improved shopping environment. IoT customer experience monitoring eliminates the need of employing personnel and print survey sheets, which would cost more and may be less effective. Needless to say, customer experience also has a considerable impact on the business's profitability.
The pace of change in the technological and retail world is scary (and exciting). Just over a decade ago we started getting to grips with the newly emerging smartphones. Fast forward to today and we can check an online store, navigate through hundreds of options, make a purchase, and expect delivery as soon as possible - all whilst sitting on the sofa, sipping coffee.
Customers will demand more and more from this experience in the years to come, and it will be up to retailers to make use of emerging technologies and address the challenges of IoT in the retail industry. Those that won't, will be left behind. Customer satisfaction has always, and rightly so, been the number one priority for retailers. Online purchase has empowered customers even more. Customers want to explore and have easy access to items, but mostly they want fast and efficient service. That is key.