The retail industry is in an enormous state of flux. Traditional bricks and mortar businesses are struggling, while many online-focused retailers are among the biggest corporate success stories of the moment. Major names that have been established for decades are vanishing, yet others are recording strong growth.
The Internet of Things (IoT) has numerous applications in the retail industry, and in many cases can make the difference between success failure. Here are just some of the ways in which the IoT is transforming the sector.
Long checkout queues can be a seriously off-putting sight for shoppers, and can make the difference between a completed purchase and a product left on the shelf. The IoT can enable tags on each product to be read automatically as the customer leaves the store, the total totted up and automatically taken from a mobile payment app. In other words, the IoT can dramatically streamline the checkout process – and potentially hike up revenues in the process.
The retail industry has long understood customer tendencies to cross-reference products online whilst they are browsing a physical store. If they can find the same product more cheaply elsewhere, then said retailer is likely to lose an in-store sale. However, the IoT offers opportunities for customised best-price offers or location-based services, by placing sensors throughout the store that detect when a customer with the relevant mobile app is nearby. From there, returning customers can be sent, say, special offers or loyalty discounts, or offers relevant to items they have already been browsing online.
All this helps build customer loyalty by rewarding repeat custom and delivering a truly tailored, personalised approach. It also makes the experience of visiting physical stores exciting and beneficial for the consumer, moving away from the assumption that the best deals are always to be found online.
Away from direct engagement with shoppers, physical stores can still benefit hugely from using IoT technology to gather intelligence on their retail experience. Automated sensors tracking how customers move through the store, where they spend the longest browsing and so on can provide rich data for informing both immediate responses – say, alerting a sales associate to where a customer may need advice – and longer-term strategy, say, redesigning the layout of the shop in a more customer-friendly way. It also provides opportunities for better in-store marketing, both through store design and the communications that customers receive on their mobile devices whilst they browse.
Warehouse logistics and transport
Moving to the back end of the retail sector, and we all know that managing warehouses and logistics processes effectively is one of the hallmarks of an efficient and cost-effective retailer. Here, too, IoT technology can have multiple transformative impacts. Demand-aware warehouse fulfilment, for example, combines real-time data on online and in-store shopping demand and RFID tags for thorough inventory management to deliver more intelligent and automated warehouse logistics. Warehouses of the future are already predicted to be far more open spaces, with self-organising and automated pallets responding to demand in real-time. Once products are out on the road, IoT technology can be used to enhance fleet management and for route optimisation, ensuring that deliveries are made as quickly and as cost-effectively as possible.
All retailers have large physical assets to maintain, from generators to picking and packing machines, to specialist storage such as refrigerators. IoT sensors can be used to measure key characteristics of these assets – from temperature to level of consumables such as oil or water – and deliver automated alerts when particular benchmarks are reached. This enables are far more streamlined and responsive approach to maintaining said assets, leading to longer equipment lifespan, more efficient maintenance schedules and ultimately saved money.
The retails sector is undoubtedly facing major challenges. But the IoT offers myriad ways of meeting those challenges – and moving into a more innovative and customer-centric future.