The impact of technology is disrupting the general course of how businesses operate, people connect, and automation takes place. Undoubtedly, the internet has played a pivotal role in almost every aspect of our lives. With the emergence of several internet service providers like Optimum, Cox, Spectrum, and SuddenLink, people are taking advantage of high-speed internet to browse, interact, entertain, and work whether it be at home or in the office.
As the internet is evolving, the majority of industries are leveraging emerging technologies to benefit from it and make the business processes easier. Especially, when it comes to retail, the majority of retailers are embracing the Internet of Things by heart. The reasons are obvious i.e. to enhance the processes, improve customer experience, and boost efficiency.
Before we dive deep into what IoT in retail means, we would like to shed some light on what is the Internet of Things along with data and statistics revealing the impact of IoT.
What is the Internet of Things?
Internet of Things is the machine-to-machine connectivity allowing sensors and hardware devices to interact with each other on their whereabouts. The technology might be new for many, but the fact is that it was recognized as an emerging technology in 1999.
However, the use of IoT has been seen in the past few years. Some of the IoT examples in real life include smart appliances, smart switches, smart lighting, smart security systems, and smart speakers.
On the macro level, the examples can be seen in the form of biometric cybersecurity scanners, smart factory equipment, wearable health monitors, autonomous farming equipment, and many more.
IoT is evolving with each passing day and big and small enterprises are leveraging the technology to benefit from it in the long-run. Still in the state of disbelieve! – have a look at some of the statistics and studies revealing the major impact of the internet of things at present and fruitful rewards in the future.
IoT Statistics and Studies
- According to Gartner, by the end of 2020, more than 5.8 billion enterprise and automotive gadgets will be on IoT
- The total spending on IoT by 2021 will be approximately $3.1 million (i-scoop)
- 77% of retailers recognize the Internet of Things as a means to change customer experience (Verizon)
- According to the Global Market Insights, by 2024 the IoT in the retail market is expected to exceed $30 billion
- Around 77% of Early adopters believe that IoT technology allows better cooperation with partners in delivering products and services to the consumers (Verizon)
Why You Should Adopt IoT?
The above statistics show a massive impact on the internet of things and its global spending in the coming years. In the past, we have seen many big enterprises who weren’t willing to accept the adoption of technology – leading to packing up the business or near to packing up. For instance, Nokia was once a market leader and had 50% of the share from the mobile phone market in 2007. But back in 2013, the company’s management feared bankruptcy. Thanks to Microsoft for rescuing Nokia.
The point is to emphasize the importance of emerging technology and change that everyone should bear in mind. If you are still relying on your bricks and mortar shop rather than making a store online, you are far away from adopting IoT. So be quick in adopting the change especially when it comes to business operations and revenue generation.
So now, let’s have a look at some of the cases of how IoT can be leveraged in retail to enhance customer experience, increase sales, and generate revenue.
Many retailers have already adopted innovative business models and leveraging emerging technologies like IoT to enhance their processes. Smart shelves are replacing ordinary shelves to enhance inventory management. A smart shelf comprises three elements namely an antenna, RFID tag, and an RFID reader.
RFID tags are placed on goods that contain a microchip antenna and an integrated circuit allowing it to transmit data to the RFID reader. Data collected from the RFID tags are then sent back to the IoT system where it is stored and analyzed.
As discussed earlier, smart shelves are helping retailers to manage inventory, which otherwise is quite hassling. Smart shelves send the notification to managers by analyzing and monitoring data to help them know when the items are running out or when they are going to expire.
It allows managers to save losses incurred due to a shortage of goods, thefts, and oversupply. By optimizing the inventory system, the managers are less prone to stress, allowing them to save costs, and eliminate operating blunders. Moreover, smart shelves also help in making informed decisions by collecting data on customer’s behavior.
By tracking inventory and transferring data about items arrangements to an IoT platform, retailers can know more about customer preferences and needs. Retailers to enhance customer interaction, boost sales, and improve services can then use the information.
In today’s era, no one likes to stand in a queue and wait for the long checkout process. The customer will either leave the store or simply purchase online in the future. It might largely impact the sales turnover and revenue of the store. However, not anymore when IoT can read tags when the customer is leaving the store. The checkout system will automatically read the items and deduct the amount from the customer’s payment app.
Leveraging an automated checkout system through IoT devices would allow customers to save time, shop more, and leave the store happily. Customers would like to shop more from the store that allows hassle-free checkout instead of any store that follows the traditional checkout system.
According to McKinsey, automated checkout can reduce the human workforce as much as 75%, allowing the stores to save as much as $150 billion to $380 billion by the year 2025.
Bluetooth Beacons uses low energy Bluetooth connections to send push notifications directly to the customer’s smartphone once they are in the coverage area. With beacons, customers can be informed about discounts, products recommendation, and real-time offers. The beacons can be placed anywhere including shelves, counters, and walls.
Retailers incorporate beacons to identify customer in-store navigation, collecting data, and sending push notifications. Moreover, pairing the beacons with mobile apps allow retailers to boost sales and increase customer loyalty. With beacons, retailers can easily understand the customer’s behavior, their liking, and disliking, and make some tweaks to make it more engaging.
Frequent customers are the driving force for any retailer to generate sales and increase revenue. But returning customers surely deserve some gesture from the retailer as well. With IoT, the retailers can send discounts and special offers to the returning customers on their smartphones while they are near to the product.
Internet of Things can also be used to track items that customer has been searching online for a while. He/she can be offered discounts when in-store. In short, instead of offering discounts on all the products, it is better to send tailored discounts for maximum conversions and sales.
To leverage IoT devices efficiently in your business operations, you need to devise ways to provide a better experience and give customers a reason to come back and leave with a happy face.
The online shopping trend is on the rise and has largely affected consumers’ behavior and the way products are offered. People are inclined more towards online shopping not only for convenience but also largely due to product offerings at a cheaper price. Moreover, people can compare product prices offered by different stores and shop from the one offering at a cheaper price.
However, traditional retailers operating bricks and mortar shops are faced with several challenges. As most of the consumers prefer to shop online rather than visiting stores in person – yet retailers can attract masses to shop from their stores. For instance, digital signage that connects with social network and feedback of customers can help shoppers to view related information about the product on their mobile devices.
Digital signage can also help in showing related goods that customers might like to purchase. In addition, digital signage can lead customers in the right direction within store premises to find goods that would supplement their purchase.
Marketing is the backbone of any business’s success and failure. The core purpose of marketing is to inform customers after recognizing their needs. To attract the masses, an ad can be displayed on the customer’s smartphones when they pass by the store. Moreover, retailers can also use the feature for customers already present in the store to display products in real life and introduce them to the new products through sales assistant. While the sales assistant can verify the availability of items in stock and ensure a seamless transaction.
Retailers are deploying digital signage in shopping centers and supermarkets. According to an estimate by MarketsandMarkets, it is expected that the market value for digital signage will grow from $19.61 billion to $32.84 billion, at a CAGR of 7.4% between 2017 and 2023.
Internet of Things is being leveraged by different industries including retail to enhance operations and reduce human effort. However, the IoT has not gone mainstream as much as that of other emerging technologies just like AI chatbots and AR/VR. However, in the next five to ten years, we expect a revolutionary change in every sector of business driven by the Internet of Things.