A boom in IoT retail use cases is demonstrating exactly how much and how quickly The Internet of Things is reshaping the retail industry. The days of chain store dominance are fading, with new and innovative technologies paving the way for small brick-and-mortar shops to compete on a more even playing field with their larger, more established counterparts. Retail business models are evolving, as companies take advantage of Machine Learning, automated inventory management, and eCommerce to facilitate operations, increase sales, and provide a better, more personalized shopping experience for customers.
In this post, we take a look at different IoT retail use cases, the benefits of IoT-connected solutions, and what this means for the future of retail for both companies and consumers.
Benefits of IoT Retail Use Cases
The way in which consumers are engaging with brands is becoming increasingly digital, and providing an excellent User Experience (UX) is key. Retailers that have begun to leverage IoT retail use cases are already experiencing tremendous benefits in their operations and customer satisfaction ratings.
According to an Oracle report titled “The Impact of Emerging Technology on CX Excellence,” 66% of retailers that were surveyed are already using at least one form of connected technology and this has led to significant improvements in customer experience and overall sales. IoT software facilitates the consumer journey, making it easier to shop for products and services. It even helps retailers gain better insight into the needs of their customers, which in turn, enables them to offer more personalized solutions.
Below are some of the many ways in which IoT technology is improving the way retailers conduct their business.
Greater Insight Into Customer Behavior Patterns
One of the ways in which IoT is transforming the retail industry is by facilitating the way consumer data is gathered, shared, and interpreted. Through the use of open-source data communications between retailers and financial institutions, social media platforms, and general consumer data platforms, retail companies have been able to gain a better understanding of customer behavior patterns. Digital sensors, which can be placed inside retail stores and even on items, also inform retailers about consumer shopping patterns and product preferences.
The data acquired offers retail stores several opportunities to improve their strategies and productivity. These insights have been particularly useful to brick-and-mortar shops, which previously didn’t have the technology, funds, or manpower to obtain this type of critical data.
Armed with a greater understanding of their customers’ needs and preferences, retail companies can now provide a more personalized shopping experience and promote the products and services their customers are most likely to favor.
Optimized Supply Chain Protocols
IoT can facilitate supply chain management for businesses by reducing ambiguities with end-to-end order fulfillment. Through the use of IoT retail use cases like Radio Frequency Identification (RFID) tags, GPS sensors, and video transmission, retailers can track products from the moment they are manufactured to the point at which they arrive in stores to the instant they reach the customer.
IoT has also made it possible for retailers to access other critical details about the condition of their products in real-time, including the amount of time their products spend in transit as well as the conditions of the transportation vehicles or storage facilities themselves. This information is particularly beneficial to food retail companies, as they can monitor the temperature and condition of their perishable goods and act quickly to prevent losses.
Automated Inventory Management
Even the most meticulous retailers often have trouble keeping track of their inventory. The larger the business, the easier it is for things to fall through the cracks. Manual inventory assessments are often inaccurate, leaving retailers to believe they have certain items in stock when they might actually be out. This can lead to a loss in sales and reduced customer satisfaction, especially if the item was in high demand or a customer needed an item immediately. Fortunately, IoT can automate these tasks through smart inventory management systems.
IoT technology, including digital product tags and shelf sensors, keep track of exactly how much of each item is in stock. When inventory begins to run low, the system automatically orders additional items to prevent a full product shortage. Retailers can also view their inventory in real-time using video monitoring equipment so there is never any doubt as to what items are in stock. Furthermore, this technology can also help reduce losses from theft, as retailers will receive instant notifications the moment a product is taken off a shelf or rack and leaves the store without being paid for.
Real-Time Price Updates and Promotions
One of the most innovative emerging IoT technologies that are expected to transform retail environments is the smart shelf. Smart shelves communicate with retailers in real-time, letting them know how much of each product they have in stock and providing key insight into purchase trends. Retailers can then use this information to update prices and offer promotions digitally.
Furthermore, smart shelves can also be integrated into a store’s mobile app to improve customer service. Smart shelves interact with apps to help customers navigate through stores and find what they need quickly. They can also detect when customers enter the store and recommend items or deals based on previous purchases. Kroger, the popular grocery chain, is already implementing smart shelf technology at a number of stores and causing competitors to rethink their retail marketing approaches to keep up.
Facilitated Checkout Process
One of the biggest reasons why retailers lose business is because of poor checkout operations. A shortage of cashiers or long lines can lead customers to become frustrated and leave without making the purchase. IoT can prevent this from happening with smart checkout systems. Customers can scan product tags on their mobile devices and pay for them digitally, saving them time and the hassle of waiting in line.
IoT Retail Use Cases: Impact on the Future of Retail
It’s safe to say that the future of retail is connected. Every new IoT solution that hits the market affects smart devices, which affects consumers, and in turn, retailers. Retail companies need to keep up with the latest tech trends if they want to continue offering a great User Experience to their customers and remain successful. Retailers who haven’t yet integrated IoT software into their apps should contact an app development company as quickly as possible to get ahead of the competition.