Technology is rapid-fire, and those who don’t keep up are left in the dust. The Internet of Things (IoT) is propelling this change, reinventing the way businesses operate, how consumers buy goods and the methods by which companies communicate with their customers.
The IoT is an automated transmission of information using a network instead, making communications and processes easier and more convenient for both consumers and businesses. The technologies being implemented over the past couple years utilize IoT in different ways, but all have given companies an edge over their competition making it easier for customers to purchase goods and for companies to deliver products more efficiently.
Midway through 2016, we saw smart retail donning its Smart Glasses and IoT-ware to become even brainier, as retailers implemented new technological systems. Retailers also started to sell products that do the same for their customers. These advanced devices will permanently alter the way business is done, streamlining processes shooting for the utmost efficiency in everything from store layout to ecommerce.
As reported by retailtouchpoints, “Retailers, overall, are ready to embrace IoE and IoT. In fact, 67% of retail decision-makers have already implemented an IoT strategy, and another 26% plan to roll one out by the end of this year, according to research from Zebra Technologies.”
In light of this dramatic shift in technology focus by retail behemoths, here are five ways in which IoT is reinventing retail.
- Supply Chain Optimization
Technology always plays a role in managing inventory, but RFID tagging is one way in which IoT is streamlining processes. RFID tagging tracks and manages inventory, prompting retailers to replenish based off of demand. As reported by David Dorf, senior director of technology strategy for Oracle retail and contributor to Forbes, “Using RFID tags, retailers can expect 99% inventory accuracy, a 50% reduction in out-of-stocks, a 70% reduction in shrinkage, and sales lifts in the 2% to 7% range.”
RFID – or radio frequency identification – has enabled retailers to nail down inventory more precisely across whole companies. The tags are embedded with microprocessors or EPCs (electronic product codes) which give the product an ID number, linking its SKU (stock keeping unit) number with other product details, like size and style. When merchandise is tagged, employees can track down any item through the RFID reader to see whether or not it’s in stock. Retailers know the precise location of the product, as scanners track it throughout the supply chain. The tag is deactivated at POS (Point of sale) by readers which then communicate to the inventory management system, removing the merchandise from stock.
Knowing exactly where the product is from start (product is stocked) to finish (product is sold) will reduce waste and improve inventory management efficiency.
- Management & Customer Engagement
As we’ve discussed in our article on the future of retail, this emerging market of IoT is putting virtual reality into the hands of consumers. Smart devices – like fitness wearables, Smart Glasses, Smart Watches, clothing wearables, and senior/baby monitoring items – are providing consumers with immersive experiences, recording and reporting data (health data and location info, for example). Some wearables offer more efficient ways to be healthy, safe, and, in general, are creating interactive methods by which to visualize data and engage consumers.
Smart Glasses, for instance, could allow store managers to scan barcodes, receive inventory updates and quickly locate detailed product information. They might also use these virtual specs to scan the store itself, receiving flash reporting that delivers information comparing a department’s real-time sales versus their target sales. Additionally, managers could use their Smart Glasses to confirm override requests at checkout through the Smart Glasses as soon as they happen.
- Tracking Customer Behavior
As anyone in retail knows, the layout of a store matters. The path shoppers take may determine if and/or what they purchase. This is why new wireless tracking technology can help retailers optimize their store layouts. Sensors – like Bluetooth beacons – placed at strategic points within the store can track smartphones as they weave in and out of aisles, recording their path-to-purchase data. This can then be used by the company to create a more shopper and purchase-friendly store layout, one that also communicates offers and promotional information at the most strategic points along the shopping route. Basically, the trackers allow stores to better appeal to customer behavior.
“You need to make sure you’re delivering the right message to consumers and are nurturing relationships,” Mike McMurray, SVP of Marketing and Business Operations at Point Inside, explained to retailtouchpoints. “It’s all about context. And if you have the right data, you can provide that context. Location alone provides a great indication of what people are doing, whether they’re interacting with deals, shopping lists or moving throughout the store.”
- Alternative Payment Methods
Purchasing has never been easier than with NFC-equipped contactless cards. Similar to the RFID technology used in supply chain optimization, when it’s activated by one chip, an NFC chip becomes wirelessly linked, transferring incremental data from one device to another when these two devices are within about three centimeters of each other.“No pairing code is necessary to link up and because it uses chips that run on very low amounts of power (or passively, using even less), it’s much more power-efficient than other wireless communication types,” Cameron Faulkner of techradar explains. “At its core, NFC works to identify us by our enabled cards and devices (and by extension, our bank accounts and other personal info.)”
Alternative payment methods – like PayPal, Apple Pay, and Softcard – are also options that streamline payment processes for retailers while allowing customers to cash in on rewards and digital coupons, still resting assured that the transaction is secure.
- Automated Ecommerce
Picture this: You notice your dishwasher detergent is running low, but instead of trying to find your keys to run down to the store, you simply push a button on your dishwasher, and a new package of detergent is ordered and delivered to you via an online store. This quick, convenient option could soon be the mainstream…in fact, it’s already reality.
As reported by Sarah Perez (@sarahintampa), contributor to techcrunch, “Amazon’s Dash Replenishment program doesn’t only involve smart machines that place orders for you – the company also sells cheap “Dash” buttons that are associated with SKUs for common household items like paper towels, diapers or gum (!!). When pressed, the buttons will place an Amazon order for you.”
Buttons for various home supplies may soon be placed at strategic points around the home, making your house self-replenishing by linking e-commerce sites to home automation.
These five areas are only a handful of ways in which IoT is reinventing retail. Cloud-based data storage options, cheaper sensors and interconnected networks have come together to enable technology to do so much more for the retail sector and for the consumer. By employing IoT, processes are becoming more convenient, payment and purchasing more efficient, and retail shopping is simple as it’s ever been. Those in the retail sector who take this ball and run with it, standing apart from their rivals by putting these IoT-enabled tools to use in creative ways, will be the victors of the future.