6 Ways IoT is Transforming Retail As We Know It
Everyone who knows anything about the internet will likely have come across the acronym IoT. Some say it is the hottest buzzword in tech now, and that's hard to dispute. Several years ago, Facebook's Mark Zuckerberg said he'd be focusing on building devices that can talk to each other. It's only been a few years since, and the reality of such devices is upon us.
An Introduction About IoT
IoT refers to the Internet of Things, and we consider how it will impact retail. If there is one idea that IoT represents through and through, it is the idea of interconnectedness. IoT stands for all the smart technologies of today and their connected devices.
IoT comprises hardware, software, data services, systems integration, and telecoms services. IoT is relevant in how our interconnected devices and technologies play (interact) with each other, and with humans. It is also applicable to how these deal with the vast range of present-day problems and create new solutions for them.
Today's reality is that the manufacturing costs for smart devices are increasingly lower than they used to be. Therefore, the adoption of these devices is growing across sectors, including retail.
Common Examples of IoT
In reality, IoT isn't far-fetched at all. It already lives in our homes. Amazon Alexa and similar voice assistants, smarty lighting, and automated security systems are some of the common examples of the Internet of Things.
We all know how it's easy to tell Alexa to complete our shopping list by merely reading out the shopping list. We're probably even more aware of the young lad who had Alexa doing his homework (he's not alone in this ingenuity!).
In anticipation of setting up repetitive tasks soon, Alexa even stores all conversations
Yes, IoT is for Everyone. Also Retailers.
Everyone can benefit from the Internet of Things. These include individuals, small enterprises, and large enterprises. Consider for a moment how a retail store may be able to use IoT in its operations.
They could dim the lights when they have a small number of customers, for instance. How about adjusting the air conditioning system as more people enter? These are straightforward possibilities for IoT in retail. The best part of IoT is its ability to do a task without the involvement of any person.
Possibilities for IoT-Driven Retail
As retail increasingly embraces IoT, it could invite the new wave in retail revolutions. Research by Global Market Insights, Inc. says IoT retail will eclipse $30 billion by 2024. Another projection puts this figure at more than $35 billion by 2020. It will include every facet of retail imaginable – manufacturing, field service monitoring, supply chain, and inventory management.
6 Areas of Retail Where IoT Has the Most Impact
The aspect of retail with the most significant influence of IoT is improving the customer experience, online and offline. Many cutting-edge hosting providers such as Apex Hosting are aware of the benefits of IoT to retail and are ardently working on delivering infrastructure to enable this purpose. Proponents of IoT report more precious and more profound insights into customer preferences. Customer-focused data is easily the most significant gift of IoT to retail. Such data could come from interactions with Alexa.
IoT in retail multiplies the number of channels retail operators can exploit to reach new and existing customers. Imagine the possibilities of targeted outreach in building customer loyalty and helping with retention.
At present, retailers are using IoT sensors to monitor customer satisfaction, monitor food safety, track assets, and provide supply chain insights.
#1 Using Smarty Shelves for Inventory and Supply Chain Management
Traditional stores and omnichannel retailers now use IoT retail to modernize and upgrade their operations and streamline inventory management.
Smart shelves and other similar innovations take automated inventory management to a whole new level. They give store managers the benefit of real-time notifications and updates on sales levels. They also gave updates on stock levels and alerts once an SKU (Stock Keeping Unit) falls below the reorder level. Smart shelves eliminate manual errors, aside from saving money through preventing overstocking and shortage.
Smart shelf systems depend on Radio-Frequency Identification (RFID) technology. These consist of three elements:
- An RFID tag to attach to the item or product.
- An RFID reader.
- An antenna.
The RFID reader uses radio waves to read the data the RFID tags transmit. The IoT platform then receives this data for storage and analysis.
RFID tags are like barcodes – a device can read and store digital data from a tag or a label. There are other exciting advantages to RFID systems. The most notable is that RFID systems can read RFID tag data outside the line of sight. It contrasts with traditional barcodes that must line up with an optical scanner.
Retailers can monitor goods throughout the entire supply chain. Tracking systems report valuable data such as location, temperature, shock and tilt, and provide profound insights into traceability and quality control.
Tracking solutions help ascertain that materials are safe, have timely delivery, and remain in ideal conditions during transportation. These data can help the retailer improve the efficiency of their transport logistics, minimize product damage, and prevent loss.
Logistics businesses are reaping benefits and immense value from IoT. A survey of business leaders in a Deloitte Review about the Internet of Things and its ability to reshape supply chain management yields significant outcomes. Seventy-four percent of those who implemented initiatives like sensor-dependent logistics saw increases in revenue.
Interestingly, the average supply chain contribution to a company's profits grew from 4 percent to 8.5 percent in as little as one year. At this point, industry leaders started to see supply chain revenue contributions on the order of 10 percent.
#2 Checkouts without Cashiers
In another telling contrast to traditional retail outlets, the checkout cashier may only be a machine. Apps and device cameras are replacing human cashiers at the point-of-sale (POS). It just might be the final days for checkout lanes.
Stores can do much more with fewer systems, while mobile POS terminals will undoubtedly grow in number.
Artificial intelligence (AI) systems like Shoplift employ computer vision systems to identify suspicious behavior or possible theft. Install these in your store to improve stock visibility. Systems can detect not-for-sale items such as reusable shopping bags or merchandise that have not been through scanning when customers attempt to carry them past a checkpoint. The system also alerts store staff to respond appropriately in such situations.
#3 Using Beacons for Timed and Targeted Notifications
Beacons are tiny Bluetooth devices that send discount vouchers, or event invites to smartphones within a geographical coverage area. Businesses can attach them to counters, walls, and anywhere suitable within the vicinity of the store. Now that you think about those captivating notifications, there's every chance you've been "Beaconed" and didn't know it!
Such alerts can cause a potential customer to go into a store and take advantage of the offer. Stores may also let prospects in on on-the-spot contests or promotions, just as customers already in the store, may enjoy instant discounts.
#4 Digital Signage to Showcase IoT Retail's Interactive Shopping Experiences
To uplevel customer engagement, stores can use digital signage. These may be in-store digital displays, intuitive device touch screens, or even digital-out-of-home (DOOH) applications.
These may go along with beacons or other smart devices to help retailers with real-time design offers, targeted promotions, and product groupings, based on the captured data.
IoT pushes digital signage beyond the league of display boards. There is scope to collate data concerning buying patterns and behavior. Touchscreens in fitting rooms can suggest alternate designs or sizes, summon an assistant, or suggest accessories. Stores can acquire data on shopper's trials and final choices to buy.
Built-in facial recognition systems that recognize you as you pass by take the spookiness of IoT beyond anyone's wildest imaginations. These systems can alter the digital display to do what is likely to win the customer's attention and business.
#5 Asset Tracking
Retailers use IoT to track missing shopping baskets and carts. Successfully tracking these assets can enable stores to lower the cost of replacing them. Shopping carts are expensive, costing $75 to $250 to replace each. Sensors on assets like shopping carts enable retailers to track them to their exact location. There can also be status updates and alerts for when there is any damage to them.
Installing tracking devices on baskets or carts, function indoors and outdoors, and can run for several months or years without any need to change the batteries. These sensors can help retailers grow customer experience by ensuring they always have an ample number of shopping baskets and carts available for shoppers.
#6 Makes IoT Retail Outstanding
Once the latest and greatest technology is involved, everyone is impressed. Next-level tech like a robot assistant to help with routine errands. Some businesses are currently using robots to check inventory and restock shelves.
Companies are also developing service robots to give the customer the help they need to find the right products. Some of China's restaurants have debuted robot waiters. At the very least, some customers will be fascinated by the idea.
Conclusion
There are around 7 billion IoT-connected devices, according to IoT Analytics. It could reach 25 billion by 2021, and retailers will account for a large chunk of those. As IoT networks become more widely available, retailers will use the technology more. It will traverse all parts of their operations, improving business efficiencies, and enhancing the customer experience.
There continue to be emerging applications of IoT in retail; many wacky, many weird. Ever thought of a diaper-monitoring system? Or a bug catcher? These might go a long way in making for a great experience. IoT opens up multiple doors of opportunity for retailers. Still, it has the potential to be the product the customers will want to buy.
About the author: David Smith is a cryptographer with 12 years of experience in both the public and private sectors. He is currently working on his second startup (currently in stealth mode) that will track and interpret the use of contactless payments in the Greater China region.
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