The Internet of Things (IoT) is transforming our perceptions and way of interacting the “things”. This is leading towards innovations and generating new opportunities for all the industries. The retail sector is not contrary to this transformation. Retail owners across the globe are doing experiments with IoT for the optimizations of operations for bringing seamless shopping experience. As the industry adapts the innovations, IoT is unruffled for creating revenue opportunities, improving customer experience, generating new business streams and boosting the operational efficiency.
Let’s see how it is revolutionizing the retail industry:
Generating new revenue opportunities:
Marketing based on the location with the use of GPS and beacon technology for pushing personalized coupons and the information of sale, when the customer is in the desired territory of the retail outlet, is making one more touch-point and creating an opportunity for a retailer to convert a passer into a potential buyer. As per the report of an independent media, personalized coupons encourage 39% of customers for spending more on shopping.
IoT implemented with analytics initiates the retailers to increase the sales not just through physical stores but also with the other mode of channels. ECommerce giants like Amazon are already going through and analyzing the customer consumption patterns for providing best services to customers at their doorsteps through amazon dash. Vast consumer data increases the sale not only with existing revenue streams but also avails the retailer’s insight for new product and services offered to consumers.
Boosting the operational efficiency:
IoT is potentially stronger for a transformation of the retail supply chain industry. This can be better managed through Radio Frequency Identification (RFID). It tracks the inventory up to SKU-level that moves across the supply chain. Moreover, a data visualization layer initiates real-time inventory visibility. This is an extent to self-service for enabling consumers to locate the products. Sensors on stock keeping unit of perishable goods help in preserving quality of the products.
Retailers have significant concerns for stock-outs. RFID tags connect and communicate information based on a stock level of the items on shelves, triggering out the alert for automatic replenishment of shelves. RFID boosts the inventory accuracy up to 95% and diminishes the stock-outs by 52%. Tesco initiates its tagging of clothing range having RFID tags. This help in reducing the stock-outs by 95% and lower down the stock checking by 7%. RFID not only improves the inventory accuracy but minimizes the shrinkage of inventory by 60%.
Analytics data based on the point of sale and inventory data helps in the identification of low performing and overstock SKU’s priory to reduce stock carrying a cost for the retail owners.
Retailers are seeking towards integration of delivery option with the fulfillment criteria for providing the best shopping experience for the consumers on various channels. The Omni-channel model requires the business owners for having inventory accuracy for more than 90% along with the visibility of stocks in supply chain management. IoT based tracking solutions and visualization of data for inventory accurately and enables the retailers for initiating Omni channel model that is getting service differentiator for retail owners.
Improving consumer’s experience:
Consumer experience is crucial for the fortunes of the retail industry. So, retailers utilize a variety of tools for reaching out and retaining the customers. Point of purchase digital signage along with appropriate content provides retail owners to touch up one more customer for promoting their products and enlarge the engagement with consumers. According to the survey, by an independent Internet Research Company reveals that almost 68% of the purchaser change their decision to purchase based on in-store messaging and 29% of the purchaser buys the products unplanned because of POP displays. Data analytics based on purchase history, customer preferences and store visitors can be utilized for sending customized suggestions and best services to the customers.
Retail today, faces common problems like in-store navigation. IoT gadgets integrated into BLE and Wi-Fi helps in facilitating in-store navigation and insist the customers in finding the products as per their needs. Integrated lighting controls not just help with the conservation of energy but allows managers to studying the movement of purchasers in the stores over certain periods of time. With the help of heat maps, the shop layouts can be optimized for keeping the store lit as per the managers requirements.
Purchasers have the major concerns over long checkout queues. Smart shopping cart ensures contact-less, and easy checkout through scanning the products when consumers go out from the store.
To receive the rewards of IoT even though there are various challenges in front of the industry, it is essential for retail entrepreneurs and businesses to understand the importance of implementing IoT and the requirements of the industry. The complete spectrum of partnerships needs to be developed, and favorable ecosystem need to be built to flourish IoT and its benefits in an organization.