Since the last few years, IoT in retail is an emerging area. Though it is still in the early adopter stage, there are many challenges associated with the experienced-based retailer. However, IoT in retail is about to make a smarter change in retail business than we ever imagine. IoT is related to machine-to-machine (M2M) connectivity where hardware devices and sensors communicate.

Moreover, the powerful aspect of IoT comes into the picture when Artificial Intelligence (AI) and machine-learning combine this data to turn it into something meaningful for the business. No doubt, this is a useful way to strengthen the relationship between the retailers and the customers. Besides, it will help track stock levels and better analyze customer data, which is a soft area for most retail firms.

IoT in retail has a large impact not only on the business but also on the industry. It is the real-time data that come out from IoT sensors that directly impact the business insights, be it the stock status or what customers have bought for a day. Besides, it helps manage employees, whether it is their attendance status or regarding their equipment status.

Here are some of the areas where IoT in retail is being implemented:

– Retailers rolling out smart shelves along with robotic sales assistance.

– The use of sensors and RFID tags increases for monitoring goods and how the store is performing.

– IoT in retail, transforming retailers into experience-based retailers. They combine the in-store and online experience for customers. Furthermore, with the help of Virtual reality, Augmented reality, and data analytics tools, they are turning the store into an entertainment place.

– IoT in retail is offering retailers the ability to connect both things but people. This helps to get a better insight into who their customer is, products performance, and innovative ways of engaging with existing and new customers.

Related post – Top 12 IoT Trends in 2020 and beyond!

Why is the IoT in retail is a big deal?

As we shift towards experience-based retailing, we observe a dramatic change in terms of complexity and flexibility in retailing. However, this change should be consumer-centric, whereas new retailers should be flexible, fluid, and happy to adapt. They should be able to re-design this experience-based retailing based on the change of consumer behavior. Furthermore, this approach must be taken for all the five channels of customer engagements, as mentioned below:

Physical stores:

The store has taken a new shape as a place for entertainment or a pop-up store where brands operate for a limited amount of time in specific locations.

Online stores:

This is the e-commerce platform for ordering and buying goods, a platform that is becoming increasingly customized with data analytics tools.

Social media:

This has turned into a key channel for engagement between customers and brands. It is helping to build brand awareness and customer loyalty. Not only awareness but also social media sites are turning into online selling platforms.

Mobile communications:

Smartphones and tablets are powerful modes to engage customers with brands. This works as a source of information via the retailer’s mobile applications. Almost all retailers nowadays offer mobile applications that are increasingly being used by consensus to buy products directly from online stores.

Public spaces:

Brands are leveraging public spaces like kiosks in shopping malls, NFC readers, or QR barcodes to engage with their customers.

The core areas where IoT in retail has big impacts

Consumer goods

The retail industry has seen trends in online shopping services. Today multiple online retailers such as Amazon and eBay are offering the same goods at lower prices. This shows a sharp competition among sellers. However, these online retailers neither deal with managing bricks-and-mortar stores nor deal with the overheads that come with them. As online shopping is more hassle-free, online sales continue to grow. Furthermore, consumers find multiple benefits in online shopping like comparing prices, viewing online feedback on the product, comparing prices, etc.

Nowadays, traditional stores have become a place of window shopping where consumers view products, try them, and finally purchase online as they get more flexibility in terms of price. This is really a tough area for traditional retailers. Hence, traditional retailers are looking for new customer engagement ways to attract them back to the store.

Digital signage is a way by which the IoT can resolve this issue. It offers a connection to social networks and enables consumers to review the product’s feedback, and that all in-store. This reduces the requirement of taking the help of mobile devices for the same information. Besides, digital signage suggests related products on offer.

At the same time, to attract and engage customers, it is required to understand their behavior. Different marketing tools can be utilized for this purpose. One of the easiest ways is to put advertisements in the customer’s mobile phone’s notification bar when they pass the store. Alternatively, retailers can do the same thing while the customer is inside the store. If, as part of this engagement, the sales assistant can check the product’s availability and make the transaction successful, it turns out as a seamless buying experience that engages the customer effectively.

This is where the IoT can contribute effectively. For example, in the above scenario, the sales assistant can check the product’s availability using a smartwatch connected to the database of all products and connected to sensors. A tablet and mPOS solution can be used to complete the transaction.

Food shopping

Purchasing foods is always preferable to physical locations. Often consumers prefer to feel, test, or smell products before purchasing them. However, online food shopping spree is upward nowadays. While the online shopping experience drives customers away from visiting traditional stores, the IoT eases the experience one step ahead.

In this scenario, in-store shopping can be made easy by upgrading the stores by equipping them with sensors. This can assist sales assistance and customers to locate specific products easily. Additionally, digital displays can inform customers regarding the food descriptions and their nutritional values using the sensors on products. At the same time, this digital display saves the cost of relabelling goods.

Not only foods in the shopping store, but also grocery retailers identify the importance of omni-channel. This merges the online and offline shopping experience.

Logistics

Logistics is an integral part of retail. In this context, deliveries are a huge challenge. However, logistics has improved over time, and now for most grocery retailers delivering items even within one hour is not a big deal. For some, even narrowing it down further is a reality. Another important consideration that must be considered, especially in food and grocery items, is that some products have a short shelf-life like dairy and non-veg items. These require additional care.

IoT can hugely benefit this case. Multiple technologies have already been in use, ensuring that the retailer delivers the right product with the right condition to the customer, from shipment to arrival. The IoT can also help to ensure that the packaging due dates are correct.

Quality control

Digitalization has a good impact on the quality control of products. At the same time, it provides the retailer with information regarding the pre-packed product. Hence, it helps in better waste management resources. Besides, it helps maintain regulatory compliance as the health and safety regulation in food retail is a crucial factor.

IoT enabled devices to work very well by automatically recording any issue. This also reduces the cost of servicing equipment as digital diagnostics can be useful without interrupting the business. Additionally, IoT products also help in saving energy costs. For example, instead of keeping a freezer in constant deep-freezing mode, a smart freezer can adjust the temperature depending on the outside influences. Similarly, if a refrigerator door is left open for some time, a sensor can send an alert so that the door can be closed immediately and no energy is wasted.

IoT in retail for In-store technologies

Will the proliferous eCommerce eliminate the concept of the in-store shopping experience? Well, if you consider the industry consensus, then stores are still significant for fashion retail. This segment of the retail industry need s to create a rich experience of human shopping in the store. Already different technologies have been implemented to a  rich shopping experience for the customers that are: virtual mirrors,  digital screens, virtual tables, Augmented Reality (AR), virtual mannequins, and mobile applications on tablets.

But only making a shop experience-based does not suffice the business need.  Retailers have to be capable of capturing the key decision moment of buying or not buying. IoT in retail plays a vital role here. With it, stores can transfer knowledge about items on a real-time basis through RFID tags, NFC readers, and barcodes.

Conclusion:

IoT in retail helps retailers know about their customers and products and all aspects of their business, including their supply chain. Today, in a crowded market, data-centric retailers are king, and those who are not innovative will disappear altogether. IoT in retail makes retailers forward-thinker of tomorrow so that they can tell customers what to buy when their favorite item is back in stock, where the discounts are, and much more advanced information. On the back end, this innovative approach will result in much tighter inventory control.

IoT for retail will undoubtedly drive a much deeper shift in how customers consume goods and their payment approaches. However, the path of success in the field of IoT in retail will also face some technical as well as cultural challenges. Few of them are related to data privacy, security, ownership related, and also integration aspects.

But above all, we must agree that IoT in retail is already disrupting the retail industry. So, are you ready to embrace the changes?