A Verizon’s 2016 report on the Internet of Things reveals that retailers have shown a positive attitude regarding expectations of IoT deployments. According to this report, 77% of retailers expect that the Internet of Things enhances customer experience. Further, it says that 89% of early adopters of IoT in retail business can experience enhanced insight into the customers’ behavior and preferences from IoT. You can see below more infographics from the report.
The Sky is the limit for Retail IoT
Many technological developments are shaping the Internet of Things in the retail business. For example, the advent of in-store robots can transform the retail experience. These robots can help take inventory and stock shelved as tested by Target in a San Francisco location it owns. Some restaurants in China started replacing waiters with robots. Then there is the advent of Google Glass Virtual reality. Google glass sensors along with RFIDs can enable a customer who entered the store just with Google glass on to get the information he is looking for in a product by just looking at it without the help of any in-store attendee.
With such changes happening, the sky is the limit for deploying the Internet of Things in the retail business. With its disruptive nature, the IoT can scale retail to new heights in the coming years. You can find more on this in the most comprehensive report on IoT of the BI Intelligence, “The Internet of Things: Examining How The IoT Will Affect The World”.
The IoT bridges the gap between digital and mortar-to-bricks retail store
Today’s customer wants a smooth shopping experience in what, where, when, and how he wants to buy irrespective of the retail environment whether it is a physical shop or a digital one. And, it is the Internet of Things that is exactly bridging this gap in providing a seamless retail experience to the customer.
Equally, digital signage is providing a great opportunity for new engagement in the IoT environment. According to the Manthan infographic shown below, retailers can look for 99% accuracy in inventory, an out-of-stock reduction by 50%, and a reduction in shrinkage by 70% with the use of RFID tags.
IoT to metamorphose Retail and Consumer experience
The days are not far off when a coffee vending machine smartly recognizes us to suggest what kind of blended coffee with the proportion of a mixture of coffee, milk, and sugar we like most within a few seconds before pressing the coffee vending machine button for dispensing the coffee. This is possible with the IoT identifying the person with the help of algorithms to push the suggestion as above.
Thus, Smart Vending Machines (SVMs), a new generation vending machines are on the anvil that can become a favorite at retail outlets. The retail outlets come equipped with telemetry sensors, options with NFC payment, barcode readers, geo-fencing, large touchscreens adjusted to personalized services, all connected through a cloud to the internet. These Internet of Things, designed to be intensively customer-oriented, provide options to the customers like gifting to their friends and family members that are connected to them through social media.
The IoT is about creating a planet of virtual machines that can emit data. Thus, engaging customers in a better way and retaining them through the agile supply chain is going to be the gateway for building brands and sales. The flawless execution of the supply chain with IoT-enabled self-healing and predictive maintenance reduces the downtime for the engaged equipment and machinery helping retailers maintain their business. The smart mirror is going to be another prominent IoT trend. When shopping for clothes in a retail shop, these mirrors can take videos and stills of the clothes that customers make trials. The customer’s hand gestures allow color changes of the clothes without changing them in real-time. The customer can share these videos or stills with their family and friends for their opinion regarding the outfits they are trying.
A true transformation for a retail store outside its four walls
RFID technology, a component of the Internet of Things, helps to keep track of the availability of finished products and raw materials. A retail store can use RFID tags to identify a product’s batch that helps in case of a replacement is required or to solve a dispute. Apart from this, the Internet of Things can help the betterment of the business of a retail store out of its four walls in many ways.
Suppose someone is working on his document at his place, and suddenly finds the ink depleted for printing, then he can just press a button for ordering the ink supply from a particular retail store by the Internet of Things engagement. Therefore, without the customer visiting the retail store, IoT helps retail businesses make home replenishment possible in a grand manner out of its four walls, paving the way for happy customers and more revenue. Similarly, when you find that your BP pills are going to be out of your stocks, you can place an order for the pill with a local medical store if you are connected through the Internet of Things. Amazon already developed a Wi-Fi-enabled device, Amazon Dash Button that enables reordering your preferred product by simply pressing a button. There is no need of logging into the site to search for the item every time to buy.
Big challenges for retailers in managing IoT
Rapid changes in technology applications and the scope of connected ecosystems are a big challenge for retailers in adopting IoT for their business. It is a hard proposition for the retailers that have no guarantee for future-proof technology and investment. Retailers need to constantly keep a watch on the rapid developments in IoT. At least they have a danger of being uncoordinated if they are unable to replace connected things, technologies, and investments.
Another big challenge is facing the management of data pouring from the connected ecosystem, analyzing and acting on the insights. Capturing the data is one challenge, and drilling the data for actionable information is another challenge that needs both a good investment and workforce. For a small and medium retailer, it may be a difficult task.
Security and safety of IoT technology are also concerning issues. The vulnerability of the connected ecosystem, software applications, and hardware in IoT to cyber threats is a real-time challenge. The retailers have to manage these challenges effectively.
Retail IoT Market Predictions
The retail industry is significantly adopting the Internet of Things in every field such as supply chain and inventory management, marketing and advertising, vending machines and smart kiosks, customer management, and payments. The IoT has expected a promising growth in retail business because of increased competition and a need to provide better customer services, and reduced cost on account of connected things, RFID, and sensors. The analysis report on the retail market of Internet of Things, done in February 2017 by Grand View Research Inc., U.S.-based market research and consulting company, estimates US$ 94.44 billion of IoT global retail market existence by 2025, for both the retail store and digital operations.