Why Internet of Things (IoT) in Retail Industry?
Over the past two decades, the traditional landscape has changed rapidly, providing companies with groundbreaking opportunities to accumulate and evaluate data and ensure successful targeting across multiple channels.
The retail industry is seeing a speedy transformation, with the Internet of Things taking center stage in the sector. The expansion of IoT technology in retails is expected to reach US$ 94.44 billion by 2025, with 21.5% CAGR in this period.
Retailers are using IoT technology to reduce costs & inventory error, drive growth, optimizes your supply chain management, and improves overall performance.
According to a survey by the global technology company Zebra, around 96% of smart retailers are ready to alter their store and office infrastructure to adopt the Internet of Things. A piece of recent news says, approximately 65% of respondents have already adapted IoT solutions, and another around 26 percent of retailers ought to adopt IoT within a year.
There are many ways in which retailing marketing has gained through IoT application, but here, we will whet in on the seven most important ways we think IoT will change retail in 2020.
- Different ways IoT is changing Retail
- Personalized discounts
Every business will have frequently returning customers, and most of the companies want to reward them for their fidelity.
With the newly developed IoT, beacons, and sensors, you can send loyalty discounts to selected customers when they come closer to the products with their smartphones if the customers previously sign up for a loyalty program earlier.
In addition, you can use IoTs stock to track & analyze items that customers have been looking at online and send them a personalized discount to each customer when they come physically to the store.
Let us consider a simple example for a better understanding of the concept.
Imagine one of your customers has gone through your perfumes online, after that he visited your physical store then received a discount on her favorite perfume? It is better to offer a discount on a single product instead of providing on various general discounts, by which you can enhance your business conversation rates.
One thing is for sure if you want to integrate IoT devices into your day-to-day business, it needs more of foresight and creativity. No doubt, IoT in the retailing application can help businesses in discovering innovative solutions to attract more loyal and valuable customers.
- Optimizing supply chain management
What is the need for IoT? When we are tracking products without using this application.
The question came to many of the retailers.
However, the reality, the tracking information we get without IoT is limited. When you start using IoT, it will help you to get data that are more precise such as how long it spent in shipment or temperature at which an item is being warehoused.
The above data can be helpful to improve the quality of transportation, and another most important thing is you can respond to real-time activity if a product is being kept at temperatures high or low, to avoid significant loss.
According to the survey, in 2014, manufacturers using IoT solutions saw an average of 28.5% increase in revenues. It helps in handling long line of suppliers, vendors handling your products, and truck drivers, it is imperative for you to correctly keep track of how your product is dealt with and where exactly it is located in supply chain management.
Another facet of supply chain management that has been benefited is fleet management. IoT in fleet management is works based on three technologies GPS, RFID, and on-board diagnostics. After knowing the benefit, you will say thanks to IoT; it establishes a connection between manufacturers, stakeholders, retailer’s network, and transport companies.
- The idea of Smart shelves
From time to time, business operations are changing drastically. Many businesses said goodbye to the traditional approaches and started using advanced technologies & techniques, such as the concept of smart shelves (retail shelving ideas).
Whenever you go to a supermarket, you will find a lot of people’s energy and time is attentive on keeping track of items to make sure they are never out of stock and checking items missing or misplaced retails products on wrong shelves.
You can practice smart shelves to automate both of these tasks, and simultaneously discovering potential theft.
The idea of smart shelves depends on three essential elements
- RFID readers
- RFID tags
An RFID tag is something that you can find on a product. It will have a microchip antenna and an integrated circuit that transmit data to an RFID reader. The data collected from the RFID tag is sent to the internet of things stock device, and then it is stored & examined.
The RFID reader is a device that gathers the information from RFID tags that used to track objects.
An RFID antenna helps to detect the frequency low, high, and ultra-high. Until the introduction of smart shelves, inventory management is a monotonous and time-consuming task.
Thus, IoT technology shows to be handy for the stores, helping retailers circumvent the overstocking of goods, as well as notifying them if anything is falling short. Along with that, it also averts the theft of goods as each product has an RFID tag linked to an RFID reader.
- Automated checkout
As an owner or store manager, you have witnessed long lines of customers at checkout counters for purchasing products. It is the most hated & frustrating thing for customers, and as an owner, you can feel unprofitable to pay multiple employees at peak hours of shopping.
But, automated checkout technology has made standing in long queues at the checkout counter a thing of the past. With the help of IoT, you can easily set up a system to read tags on every product when a customer leaves the store with no trouble.
The checkout system would read and tally the items up and instantly deduct that cost from the customer’s mobile payment app.
Image source: Wikipedia
Developing an automated checkout system with the help of IoT devices would make your customers happier and more interested to revisit your store, mainly when they are on a time crunch.
According to the reports, automated checkout can decrease cashier staff requirements by 75%, which results in saving of $150 billion to $380 billion a year in 2025.
Along with making things hassle-free for customers, the smart retailing systems helps automatic retail companies bring change in their workforce by replacing cashiers with automated software retailing system.
Beacons are innovative Bluetooth devices that have changed how retail companies send notifications to customers regarding sales and discounts based on location proximity.
It means the customer can receive special offers, discounts when they are near target stores application and have previously downloaded that retail store app Beacons first introduced by Apple in 2013.
These are battery-operated devices that can easily go to customers with the right mobile application. As of now, many famous retailers all over the world have started using this cutting-edge technology (retail IoT) to offer the ultimate shopping experience to the users.
This beacon IoT has helped retail companies maximized the in-store shopping experience & the latest reports have found that a bulk of shoppers used offers notified by beacons for buying products in the store.
Along with helping customers in the store, beacons also send alerts to the people who pass by from the store that can be used to advertise effectively. A research study found that 70% of the shoppers said beacon-triggered content & offers enhanced their likelihood to purchase in-store.
- Robot employees
It is a little bit hard to believe a robot to be your retailing customer service representative; it is an excellent opportunity to cut down on menial tasks burdening your workforce and with no error.
Robots are transmuting the existing workforce by replacing humans, and robots can do multiple tasks with expertise from executing jobs like reporting on the inventory to regulating customers while shopping.
According to Business intelligence stats, about 2.8 million robots are expected to be shipped in the next five years.
Currently, many retailers are using robots in their stores; among them, one is Target. It is used stocking shelves and taking care of inventory. In the coming up years, the number of companies using robots will go on increasing.
- In-store layout optimization
It is another way in which IoT is changing the retail industry is by doing In-store layout optimization.
You might be amazed to find your retail space isn’t optimized for your customer behavior; it is like placing least popular products upfront, or your customers would desire more area around the couches in the back.
By employing aisle-analytics software by using infrared sensors, you can use IoT technology to improve your retail layout.
Let us take a simple scenario.
Let’s think most of your customers spend most of the time checking out your TV’s; but, those are placed in the back of the store near DVD players which rarely touched.
So, doing such type of things will arms you with necessary customer behavior knowledge, so place the items the customers more care about like washing machines, Tv’s, and refrigerators in front of your store.
- Final thoughts
After knowing the results, more and more retailers are looking to implement the IoT to improve their results.
There are already a lot of companies who adopted assistance from IoT service providers, and it is expected that the number of such companies will upsurge in the coming up future, especially when you deliberate the fact that these solutions are going to become better and better.
Are you a retailer?
Do you wish to attract more customers to your store?