The future of retail: How IoT is transforming the retail industry
Over the past 20 years, the traditional retail landscape has dramatically changed, providing companies with innovative opportunities to collect and analyze data and ensure successful targeting across various channels.
A growing need to increase customer loyalty and deliver the best in-store experience is driving the adoption of The Internet of Things (IoT) in the retail sector. According to a new research report by Global Market Insights, Inc., IoT in the retail market is predicted to reach over $30 billion by 2024.
In another report, Verizon showed various use cases in retail IoT. They found that retail companies realize the potential of IoT and are positive about many aspects of its deployments.
- 77 percent of retailers believe that IoT solutions help improve customer experience.
- 89 percent of early-movers in retail report that IoT enables to gain increased insights into customer preferences.
- 77 percent of early-movers in retail say that IoT technology helps better cooperate with partners in delivering quality products and services to customers.
The image is taken from i-scoop.eu. Internet of Things in retail – positive experiences reported by early movers – source Verizon: “State of the Market – Internet of Things 2016”.
IoT use cases in retail
Bringing innovative business models, smart shelves have already started working their way into the retail industry. Smart shelf systems contain three elements: an RFID tag, an RFID reader, and an antenna.
Being placed on the goods, RFID tags have an integrated circuit and a microchip antenna that transmits data to the RFID reader. Information is collected from the RFID tags and sent to an IoT platform, where it’s stored and analyzed.
Smart shelves are suited to inventory management, that has been an expensive and tedious process for a long time. Now smart shelves can automatically monitor inventory and send managers alerts if a certain item is running low or its date will expire soon.
Therefore, connected devices are crucial for avoiding oversupply, shortage of goods, and thefts in stores. By tracking inventory, they enable to reduce stress, remove operating mistakes, and save costs.
Smart shelves also take an important part in making intelligent insights into customer behavior.
By monitoring inventory and transmitting data about items movements and whereabouts to an IoT platform, the system can provide retailers with information about customer needs and preferences, showing them ways to improve their services, increase customer interactions, and boost sales.
Beacons are devices that use low-energy Bluetooth connections to automatically send push notifications directly to shoppers’ smartphones once they appear in the coverage area.
Customers are notified about shares, discounts, and offers in real-time, making them more likely to enter a store and make a purchase. As beacons are small, they can be easily attached to walls, counters, and other places.
Retail companies also use beacons for customer in-store navigation, sending push messages, and collecting customer data. Coupled with mobile apps, beacons enable retailers to increase customer loyalty and boost sales. Through beacon technology, retailers can easily reach their audience and provide an engaging experience.
Also, beacons are irreplaceable for customer in-store navigation and collecting data about customer behavior, for example, the most preferred routes, goods, and stores in the shopping center.
Now beacons are becoming widely introduced in the retail sector. BI Intelligence, Business Insider’s premium research service, predicted the beacon installed base to swell from 96,000 in 2015 to 3.5 million in 2018.
Robots have the potential to significantly change the retail sector. BI Intelligence predicts 2.8 million enterprise robots to ship between 2016 and 2021. Wishing to become pioneers and take a competitive advantage, many companies have already integrated robots into their work.
Target, for instance, tested robots in one of its San Francisco locations to help stock shelves and take inventory.
Restaurants in China have started replacing waiters with robots. Startups Simbe Robotics and Fellow Robots are creating service robots that help shop visitors quickly find products they need as well as ensure the shelves stay stocked.
Digital signage helps retail companies provide personalized and interactive shopping experience. Digital signage solutions like Ipad screens, digital-out-of-home applications (DOOH), intuitive touch screens, and in-store digital screens, help retailers impress customers and increase sales. With digital signage applications, marketers save costs related to traditional print media and push customer engagement to the next level.
Digital signage solutions can serve not only as an attractive and simple way to display advertisements, but also be successful in thinking logically and improving in-store experience, due to the Internet of Things.
For example, they can push ads and price changes to stores in real-time. Also, digital signage can be programmed by accumulating contextual cues and patterns from the customers and establishing connections based on their expectations.
It can work as follows: using beacons, sensors, or smart devices, the system collects customer data, calculates when customers generally group particular items, the time of the year these items are purchased, and so on. Using IoT technology, digital screens can display not only commercials and catalogs but also personalized promotions based on collected data.
Realizing great prospects of smart signage, retailers are integrating this technology in stores, supermarkets, and shopping centers. MarketsandMarkets expects the global market value for digital signage to grow from $19.61 billion in 2016 to $32.84 billion by 2023, at a CAGR of 7.4% between 2017 and 2023.
IoT will dramatically transform and innovate the retail industry in the coming years. The integration of IoT solutions will enable retail companies to create successful marketing campaigns based on customer behavior, deliver high-quality services, improve inventory management, and reduce operational costs.
The post The future of retail: How IoT is transforming the retail industry appeared first on ClickZ.