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How IoT Technology is Revolutionizing the Retail Industry

Connected devices aren’t just helping people to shop, play, live, and work – they’re gradually changing entire industries. From smart home devices to real-time tracking systems in logistics and production, people have been applying and discovering new use cases for IoT (Internet of Things)  devices for a while now.

The retail industry is not an exception here. In fact, we’re great at discovering ways to how IoT can help us in this area, the global IoT in retail market size is projected to reach $94.44 billion by 2025, growing by more than 20 percent each year. 

Indeed, IoT technology will be particularly disruptive to the retail industry. Here are some of the most exciting opportunities that it presents to retailers and their customers.

Introducing the New In-Store Experience

Although  87 percent of consumers begin product research online, brick-and-mortar stores continue to play a major role in retail. Out of these people, 46 percent say that buying in a physical location is preferred. In fact, many actually use their smartphones while in a store. 

Despite a common belief that in-store shoppers mainly compare your prices to competitors’ while browsing the shelves, Google says that they’re 4 times as likely to search for the brand they’re visiting as well as the products it offers.


Source: Think With Google

Is there a way to make the experience of in-store customers better?

That’s where the IoT comes in, and it has a lot of benefits. Here are some of the ones impacting customer experience the most.

Benefits for Customers

1. Interactive Displays

With so many people using smartphones in stores while browsing, it makes perfect sense for retailers to bring digital touches into this experience.  Not only can this uplevel customer engagement, but it can also increase sales and increase awareness of new products and special offers. 

That’s where the IoT retail displays come in. They’re interactive, of course, and allow visitors to engage with brands by providing information about products, pricing, promotional offers, promotions as well as see the store’s plan for navigation.  Thanks to a Wi-Fi connection, the displays get all the data that it shows to customers. 

Here are some of the most important ways in which interactive displays improve customer experience:

  • Increase customer engagement by introducing the element of interactivity
  • Provide customers with detailed product information
  • Sharing immersive brand experiences to build trust and loyalty.

Unsurprisingly, the interactive display market size is projected to increase by 17 percent annually and reach $50.87 Billion by 2026.

2. Smart Mirrors

The experience of trying clothing will get even better with the IoT with the so-called “smart mirrors.” The main purpose of this incredible device is to allow a customer to try on clothing virtually and excite and delight them in the process. 

Not only augmented reality-powered technology is fun to use, but it also eliminates a couple of big drawbacks of in-store experiences – standing in long lines and discovering that there’s a limited product selection. 

The experiences of customers with smart mirrors were great. Marina Nazario, a retail writer for Business Insider, has tried using the technology in a Ralph Lauren store in New York, and in her own words, “it blew her mind.” It was installed in a fitting room, and it was essentially a touch screen with a bunch of options.

According to her incredible article that she wrote to share her experience, the things that she loved were:

  • It showed the information about the items that she took with her to the fitting room (general information, availability, sizes, etc.)
  • It allowed setting the lighting of the fitting room
  • It lets to choose a language to use
  • It allowed messaging an employee so they could come to assist with something
  • It showed product recommendations to “complete the look”
  • It sent a text message to her smartphone with the information about a product she liked (consent required).


Credit: Marina Nazario/Business Insider

It’s safe to assume that we’re going to see more retailers, especially clothing brands, installing these devices soon, as the smart mirror market is poised for huge growth.

3. Automated, Cashless Checkout

Wouldn’t it be great if you could just walk out of a store’s door without having to wait to pay? It’s exactly what this next IoT-enabled technology delivers. A retailer sets up a system of beacons to read tags in each item carried by a customer when he or she leaves the store, so there’s no need to wait in long lines that deter many from purchasing products.

The beacon system transmits the information about the items and the cost to a special system that automatically deduces that cost from a customer’s mobile payment application. For example, Amazon Go, one of the pioneers of the cashless automated checkout, has an app for both Android and iOS that needs to be downloaded and provided with payment method before arriving at a store.


Source:, screenshot.

Mckinsey expected this technology worth to grow up to $380 billion per year in reduced costs for retailers by 2025. This growth will be observed all around the world.

4. Personalized Coupons with Discounts

Personalized discounts are a good way to reward returning customers. There are two ways you can do this with the IoT in your store with Bluetooth sensors and beacons connected to the Internet:

  • Track products that a customer viewed online and send them a discount on that product when he or she is in the store
  • Send a personalized digital coupon to a returning customer based on their previous purchases when they enter the store.

In addition to discounts, retailers can also share promotional messages, announcements, location-based messages, and reminders.

Benefits for Retailers

Thanks to the IoT, retailers can create an ecosystem of connected devices to establish a real-time interaction with their customers as well as improve the readiness to meet their needs. 

 1. Smart Shelves

Even though a smart shelf looks almost exactly like an ordinary shelf, it does so much more. Thanks to RFID (Radio-Frequency Identification) tags that are real-time data transmission devices that read product availability and send that data to an IoT system. 

Their secret here is that a smart shelf has weight sensors connected to readers that transmit the information to the store’s management in real-time. As a result, the retailer can see a lack of inventory and replenish it, thus reducing the need to hire security personnel for detecting in-store theft. 

One of the pioneers in this area is Kroger, a U.S.-based retailing company. Last year, they’ve partnered with Microsoft and developed Kroger EDGE, a smart shelf that uses Azure to store and process data generated by customer demand. Moreover, it can light up if a product it’s under is in your pricing list (an app required), and give information such as gluten content or country of origin.


Kroger EDGE shelves. Credit: Microsoft.

Brett Bonner, the vice president of research and development at Kroger explains why this new technology is exactly what modern shoppers are looking for. He says that it enables retailers to share important information on products in a simple way just like users can see it on the internet. One-click and you have what you need.

2. RFID Item Tracking

With RFID trackers, retailers can:

  • Track in-store inventory to see product abandonment, identify product location, and deter theft
  • Track inventory in the supply chain, from the warehouse shelves to the store shelves. Increasing supply chain visibility helps with building flexibility and making better decisions.

3. Smart Price Tags

The main purpose of smart price tags (also referred to as “smart labels”) is to change the prices of products in real-time based on demand on other trends. As a result, the manager can adjust prices when needed without the need to print new prices for each product sold in their store.  For example, smart price tags are helpful in the following scenarios:

  • If there’s a sale and the store needs to reduce the price for a bunch of products
  • When there’s a need to lower prices on low-turnover items
  • When the store has to increase prices on higher-demand products.

This fully-integrated, real-time pricing system can be a tool for synchronizing prices between the registers and the shelves as well as verifying prices for monitoring and control. A lot of retailers have expressed interest in employing such a system; in fact, the smart price tag market is projected to expand by almost 12 percent over the next five years. 

It’s Just a Beginning for The IoT

Although there’s a bunch of impressive use cases of the IoT in retail and other industries, the technology is in the early implementation stages. With analysts predicting an IoT boom in the next five years, it’s reasonable to claim that more retailers will experiment and adopt the solutions described above. 

However, the things we just discussed certainly have great potential to improve the customer’s in-store experience and the retailer’s supply chain performance. That’s why they’re going to be a reality very soon. 

About the author: 

Bridgette Hernandez is a content creator and editor at TrustMyPaper. She is known for writing informative texts based on thorough research that are still engaging and pleasant to read. Bridgette`s obtained a Master’s degree in Anthropology and currently, is working on her first book.

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