How Internet of Things Is Disrupting Retail Industry
Internet of Things (IoT) is creating a tectonic shift in the way brands react to consumers and how buyers interact with each other and seek out and find sources of information that assist their buying decisions. A spate of recent events are re-shaping the way consumers communicate with each others, with the brand, conduct research and shop for goods and services.
New devices, systems, microprocessors, data hubs, networks, analytics and software demonstrating artificial intelligence are increasingly making their presence felt in the retail markets. “IoT data harvested from smartphones, wearables, sensors and other devices would soon provide significant insights and opportunities for both the customer as well as the brand. The use of predictive selling powered by artificial intelligence would enable retailers to deliver superior buying experience to customers, resulting in lifelong brand loyalty, says Suhale Kapoor, Co-Founder and Executive Vice-President of Absolutdata Analytics.
In a study conducted by Forrester last year on Global Business Technographics and Telecommunications, the analysts mentioned that were were close to 1,000 major retail companies that were seeking to use the IoT to improve efficiency, serve customers better and gain insights into the new ways of doing business and enhancing growth.
In terms of the hardware that would back the proliferation of the industry, a Juniper Research showed that by 2020, retailers worldwide would be spending upwards of $2.5 billion in terms of the hardware they use, including beacons, RFID tags, and other types of sensors. In relative terms, that number is 4 timesthe $670 million spent in 2015. Also summarized in the words of Mahesh Lingareddy, Founder & Chairman of Smartron, “The number of devices or touch points with customers are increasing manifold from a few hundred millions in the PC era to a few billions in the mobile era to tens of billions in the IoT era”.
Bringing along a seamless experience
Anywhere there is a customer touch point, whether in a ‘brick-and-mortar’ store, e-commerce website or even a telephonic customer interface, a seamless experience for the customer determines the success or failure of a venture.
According to Dan Mitchell, a retail industry consultant at SAS “From a perspective, WIFI and other indoor location based services technologies will allow retailers to bring IoT into the store in a way that makes sense.”
Echoing similar sentiments, Kapoor had spoken of examples in the sector where for instance an in-store app can identify long waiting periods at certain locations within a store and send text alerts to customers and notifications to save at-risk purchases. At the same time, in-store IoT-enabled smart cameras, beacons and sensors can be combined with real time location data from apps on smartphones to show the customer traffic patterns and buying behaviors.
Employees can also quickly react to bottlenecks, reducing customer wait times.Location based targeting is another new phenomenon that’s being adopted by retailers for better targeting the potential customers within the store. It can help businesses assess when customers stop going to a particular store and start going elsewhere, as well as give them a senseon the change in shopping pattern.”
Supply chain enhancements
A key reason behind the retail industry working so seamlessly stems from the logistics and supply chain functions that are also now getting enhanced by IoT.
In the ‘Internet of Things: Revolutionizing the Retail Industry’ report by Accenture, research teams state that the Industrial Internet has emerged as a term to describe how companies are leveraging cloud, mobile, big data and other technologies to improve operational efficiencies and foster innovation by tightly integrating the digital and physical worlds.
The combination of the Industrial Internet and IoT devices could add more than $14 trillion to the global economy by 2030.”Many examples proves that IoT is already making a difference in logistics and supply chain, such as the use of RFID technology. The main application comes in the form of inventory tracking that gets better precision and becomes more efficient to track.
The use of data visualization techniques allows employees to track products across the entire supply chain, and also with the use of ‘Real Time Pricing’ any inventory which has been lower in demand could be given better offers, or any product with a high demand could see a product price adjustment accordingly.
A fully integrated pricing system would help retailers improve synchronization of prices between the shelves and the registers and also across channels, to verify prices are consistent between online and brick and mortar stores.
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