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Retailers are struggling to cope up with challenges, such as the ever-changing customer expectations, declining customer loyalty, internal communication gap, employee retention, and management of operational efficiency. With eCommerce growing in popularity and more brick-and-mortar stores bringing their customers online, retail business leaders should look to leverage technology to transform customer experiences and stay ahead of competition. Among the emerging technologies, IoT is increasingly helping the industry reduce costs & inventory error, drive growth, optimize supply chain management, and improve overall performance.
The global Internet of Things (IoT) in retail market size is expected to reach USD 94.44 billion by 2025, according to a new report by Grand View Research, Inc., exhibiting a 21.5% CAGR during the forecast period.
The technologies that retailers are currently using (and spending on) reflect the omnichannel nature of today’s retail businesses. Systems that can help retailers track inventory and fulfill orders across multiple channels are becoming more critical as consumers engage with brands across a variety of touchpoints, often in a single purchase journey. The chart below reflects that trend, with inventory management systems, order management systems, and order fulfillment software the top choices among respondents as per Total Retail’s 2020 technology report.
Among the many potential differences IoT can make in the retail industry, here are 10 of the most relevant ones.
Smart shelves use weight sensors and RFID tags to automate both of these tasks, while simultaneously detecting potential theft.
This way you can make sure that you don’t run out of inventory and reduce possible losses by smartly protecting yourself against theft.
You can further automate the billing and payment process by directly generating the bill to your customers’ mobile phone or email and deducting the payment from their payments app. This seamless process can result in high levels of customer satisfaction and end up saving your customers a lot of time which would likely make them return to your store more often, even when they are in a rush.
Enhance the in-store experience by delivering targeted advertising related to the products that your consumers are already shopping for.
Keep customers up-to-date with the latest product news and promotions by delivering information straight to buyers in retail locations.
If you have frequently returning customers, we bet you’d like to reward them for their loyalty. With IoT, you can set up sensors around the store that send loyalty discounts to certain customers when they are at set locations around the store with their smartphones if they have signed up for a loyalty program in advance. You can also use IoT to track what the customer has been looking at online or during their other visits or the current one and make offers or provide discounts based on them.
For example, imagine if your customer had previously viewed a pair of sneakers online but didn’t purchase them due to a high price. Instead of running general offers, you can offer that customer a discount on the item of their interest, increasing the possibility of a purchase. Consider another scenario where a customer has bought paints in their recent purchase. You can offer them a discount on a canvas or a sketchpad or sell them as a combo pack.
Not just within stores, but beacons can also be configured to send alerts to people passing by. This can be used to advertise the currently running offers or in-store events.
Here’s how Coca Cola Hellenic Bottling Company used smart refrigerators to ensure the optimum performance of their coolers while increasing sales by the use of beacons and managing their supply chain using sensors.
If you’ve got a long line of suppliers, truck drivers, and vendors handling your products, it’s imperative for you to accurately keep track of how your product is handled and where it’s located in the supply chain. This information helps you ensure your process is running as efficiently as possible, and can help you get your product into your customers’ hands faster.
Customers tend to give feedback when asked for it. With IoT, you can send notifications to customers asking for feedback right when they step out of your store. This way you can gather fresh insights. Even if customers choose not to give feedback at that moment, you can always ask again, when they return to your store.
IoT can reduce inventory error, optimize your supply chain management, and decrease labor costs. Ultimately, IoT can help your traditional brick-and-mortar shop compete with today’s online-first shopping world, by exponentially improving customer experience and decreasing unnecessary expenses.
The market conditions and consumer behavior are changing dramatically. So are you informed and equipped enough to face this change and sustain?