The increased connection between people, products, data and the things we’re all experiencing in our day-to-day lives, which some credit as the “Internet of Things” (IoT), is helping companies in the retail industry get smarter about the products and services they offer their customers and how they deliver them. As a result, shoppers are having more exciting experiences and businesses are maximizing their profit margins.
Peter Middleton, research director at Gartner*: "The growth in IoT will far exceed that of other connected devices. By 2020, the number of smartphones tablets and PC's in use will reach about 7.3 billion units. In contrast, the IoT will have expanded at a much faster rate, resulting in a population of about 26 billion units at that time."
Cisco highlights how the IoT will help retailers and other businesses deliver relevant information and offers to customers at just the right time and place*:
Attendant-less smart vending machines with an internet connection that can sell small, fast-selling, or season-specific items:
Using an internet connection, retailers can communicate to the vending-machine shopper through the mall’s network infrastructure and a cloud-based server. Retailers can provide shoppers with information based on browsing history or sales activity and then inform them about future offerings.
Shoppers can also communicate with retailers in order to do things like dynamically adjust pricing to move inventory, take advantage of weather conditions, or mall events. The vending machines can also communicate any functionality problems to service representatives and inventory levels to supply chain constituents to service, or restock the machines as needed.
Using location-based technology to draw in customers:
Retailers can enhance their loyalty programs and shoppers by sending them pop-up messages or alerts of in-store trends and new arrivals with time-bound discounts. As a result, shoppers will be enticed and more likely to enter a store, which will more likely turn a visit into a purchase.
Optimizing inventory to increase sales:
With location-aware sensors that communicate through a cloud-based server to the retailer’s data center, a retailer is able to analyze regional, seasonal, and other micro-trends in a timely fashion.
Sales data across all channels can be analyzed and correlated in real-time to leading indicators of demand (ex. extreme weather conditions, or fashion-trend comments on social media channels) to anticipate proper stock levels by style and location. As a result, shoppers will have several options to purchase from. This increases revenues, decreases markdowns, and develops a strong and reliable relationship between the customer and the retailer.
Assisting shoppers and increasing revenue:
“Smart mirror” functionality can assist shoppers with buying decisions, by displaying suggested items in the mirror of a changing room. This gives the shopper the impression that they’re trying on the suggested items all at once, which saves both the shopper and the retailer time and effort. As a result, smart mirrors can make the shopping experience much easier for the shopper, resulting in more selling opportunities for the retailer.
Connecting shoppers to improve omni-channel sales:
Connecting a customer with a retailer’s app can increase in-store sales. For example, if a certain sized item doesn’t fit while the shopper is trying it on, they can scan the item’s tag. If the certain sized item is available in the store, the nearest sales associate would receive an alert to locate the item in the correct size and deliver it to the customer. If the correct size is not available at that particular store, the customer is instantly given the option to confirm a “hold” on the desired item at another nearby location, or to purchas the item through the retailer’s app and having it scheduled for delivery at home.
IoT is here, even if we don’t always pick up on it. More and more devices are being connected, enabling automated processes and customized offerings. Communication is becoming standardized, which admits for simple implementation, and more devices are coming with built-in connections to central systems. Today’s shoppers are becoming used to having immediate access to information wherever they are. Now it’s up to the retailer to take action, in order to meet the consumer’s demand for a seamless shopping experience.
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*“IoE at Work: Retail” Cisco. accessed December 5, 2014.
*“This Could Be The Biggest Thing In Retail And It’s Not Mobile” Forbes. accessed December 5, 2014.
Graphic credits: Developer Tech, Industrial IP