The internet of things (IoT) refers to any device connected to the internet. These devices are increasingly common in the home – from virtual assistants and thermostats to smart fridges – and‚ in recent years‚ have started to make their presence felt across a myriad of industries.
IoT devices allow companies to record data‚ share information and connect with their customers more closely. They can be used as standalone machines or bring connectivity and functions to other devices. Their impact could be transformational. The value of IoT in the retail sector is expected to grow to .
In this blog‚ we’ll explore the possibilities and uses of IoT in the retail market.
Why is the retail market investing in IoT?
Customer habits have undergone a massive shift during the pandemic. Consumers now expect a seamless retail experience‚ including mobile integration and speedy delivery. With that in mind‚ retail companies know they must respond to changing demands‚ both in–store and online.
The statistics show that retail and IoT go hand in hand. In a recent Microsoft survey‚ stated that IoT technology is now critical to their company’s success. As IoT integration continues to improve business processes and customer experiences‚ those retailers not investing in IoT may be left behind.
What value does this bring to business and to the end consumer?
- More than two–thirds of companies believe IoT will lead to increased efficiency
- Sixty-four per cent of businesses will use IoT to cut costs
- Sixty-two per cent of companies believe that IoT gives them a competitive advantage
- Finally‚ half of retailers will use IoT technology to target new revenue streams.
IoT will help retailers to achieve these in two ways. First‚ many IoT devices will be used to collect data. This data can be processed and evaluated. Store managers will then be able to use these insights to make real–world improvements for their company and customers.
Second‚ many IoT devices will be able to act on data. Receiving information from other devices‚ they’ll use automation to make real-time improvements to retail environments. Only by using automation will retailers see the highest possible gains in efficiency.
These improvements will mean an enhanced experience for the retail customer. They’ll see a more seamless integration between online and brick-and-mortar shops. As well as this‚ IoT will also remove many pain-points customers have traditionally experienced in retail.
How is IoT already used in the retail sector?
Many stores have already embraced IoT in retail‚ reaping the rewards of improved processes and more personal customer relationships.
A more connected consumer
Customers are now used to browsing online before shopping in–store. They may look for recommendations‚ check prices‚ or see where stock is available. After this‚ they have the option of purchasing online‚ collecting their items‚ or choosing home delivery.
US retailer Walmart enhanced with IoT data. Customers can search for in-stock products and create a shopping list in advance. When they arrive at a Walmart store‚ their mobile app will enter In-Store mode. This uses IoT devices to direct customers to their products‚ scan their barcodes‚ and quickly checkout after shopping.
The app also uses IoT information to offer customers more granular promotions. In-Store mode takes customer profile data and matches it with real-time stock and store information. This lets Walmart deliver relevant advertisements‚ product reviews and price check data.
This allows the app to recommend products to the customer according to location. On their app‚ the customer will see a newsfeed style screen‚ showing them nearby items. As with the Walmart app‚ customers will also see reviews‚ pricing and further information.
Not only does this increase customer satisfaction; it can lead to further insights. Marketing teams can use IoT data to further personalise advertising while offering custom discounts or promotions that encourage future store visits. This enables stores to optimise prices and services according to demand.
A smarter store
Smart stores are the future of retail. In them‚ IoT devices monitor shopper traffic levels and make automated adjustments. This might mean opening more checkouts or moving staff‚ for example.
Several IoT devices also offer customers new and exciting experiences in-store. Interactive displays guide customers through stores‚ while virtual changing rooms and smart mirrors give them more information about their goods.
Data from IoT can also lead to rich customer insights. Using IoT technology‚ smart stores will learn where customers experience difficulties. This might mean dwelling in certain areas or struggling with store layout. This information can lead to crucial retargeting or improvements to the in-store experience.
The future of retail
The future of IoT in retail will transform how stores operate. They’ll use data to increase efficiency‚ reach more customers and offer deeper personalisation. The key to IoT usage is to learn from the data. Retailers should incorporate robust analytics to make the most of IoT’s exciting possibilities.