What is the impact of IoT on the ecommerce industry?

Al Sisto

Blog by: Al Sisto - 6 / May / 2021

The future of retail is arguably in the digital space, with the power in the hands of those outlets that are taking full advantage of emerging ecommerce tools. The next big leap, which will take e-commerce to the next level, looks to be greater IoT use.

E-commerce is already big business, with worldwide sales rising from $1.34 trillion in 2014 to $2.84 trillion by 2018 and expected to hit $5 trillion in 2021 (according to figures from Statista), but IoT promises the prospect of a smoother, smarter user journey. For example, instead of tapping or clicking on a web page or app to order food, home IoT devices (such as Alexa or Google home) allow you to use voice commands instead. Similarly, it is easy to reorder household staples with just one press of Amazon's dash button.

It's not all about finessing the point of purchase however. In fact, IoT is having a wide-ranging impact across all elements of the ecommerce industry

Providing insight into customer preferences

Using IoT, sellers can gain deep insights into shopping habits and purchasing patterns (what styles of clothing they prefer, sizing, how often they spend etc.) as well as target markets.

By using the customer profile data that IoT devices generate, merchants can then target their products, selling them to the right people at the right time. More than this, access to the same data will allow ecommerce sellers to create a more deeply personalised experience for shoppers, boosting customer satisfaction and loyalty in the long term.

Fine tuning tracking and logistics

IoT has long been used to improve the supply chain and other aspects of logistics. When it comes to the fulfilment process following an online order, IoT tracking means that you can see when the order is placed, when it is loaded, where it is on the journey, and when it reaches the door of the customer. Alternatively, customers can order an item online and collect it from whichever nearby site has it in stock.

Not only that, but retailers can also get a far more accurate and up to date view of their whole inventory and which staff are in which location. Meanwhile tertiary abilities, like tools to forecast the weather and give live updates on traffic mean that unforeseen delays and other issues can be avoided.

Improving relationships between manufacturers and consumers

Thanks to connected appliances, IoT can help to establish a firmer relationship between manufacturers and the end consumers. This is especially true in the case of items that are either perishable or in need of regular refills.

Printers are a prime example. With IoT, any device that is running low on ink can automatically order a replacement from the manufacturer. This removes a pain point for the customer (running out and having to source the product), while also keeping the brand at the forefront of the customer's mind throughout the lifespan of the device. A well run automated service like this is also likely to engender trust and positive feelings toward the brand, increasing the chances of further purchases.

Similarly, IoT can be employed to offer other ongoing services such as remote monitoring of devices, and even predictive maintenance; lessening the need for customers to access help services and keeping any fixes in-house.

Automated checkouts at physical sites

As well as being able to automate purchasing and repeat orders through the methods discussed previously, there is also the dawn of the automated checkout to consider.

Already being introduced by Amazon through their Amazon Go stores, automated checkouts allow customers to enter the premises, pick up the desired items, and have the cost deducted from their bank accounts via their smartphone as they walk out.

Predictive systems are also being developed that will allow stores monitor shopping lists, preparing and packing the most frequently bought items for collection in time for the customer's arrival.

It may be subtle, but IoT is having a huge impact on ecommerce for both consumers and sellers. With such a a high value industry using the latest cutting edge technology, even more new developments are surely to emerge in the coming years.


Topics: IoT, IIoT, ecommerce

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