Retail gurus long have predicted the future’s connected store. And because of the unique convergence of advancements in technology, adoption rates as well as sheer scale, the IoT or the Internet of Things finally is changing shopping as people know it.
IoT AND THE EXPANDING RETAIL
For years now when the ‘store of the future’ topic arose, conversations rapidly and almost always veered to technology and the IoT. The idea of having things such as shopping carts, merchandise, display fixtures connected to the web was intoxicating and retail experts longed for the huge amounts of data potentially available that empowers better decision making.
WHAT HAPPENED TO THE WAY OF RETAIL IN THE FUTURE?
IoT technologies adoption in retail faced a sort of prolonged incubation phase for several reasons. The industry in general is thought of as new technology adopters. However, there were good reasons for the slow and steady approach for retail. In the Omni channel retail reality of today, competition is tough and margins razor thin, and the result means that retailers should prioritize scarce resources investment. Up to this point, a lot of retailers focuses on fixing gaping holes and survival in their fundamental foundations. Secondly, the technologies themselves have to bet proven, vetted and improved on, with expenses coming down and benefits more readily delivered not only to a retailer but shoppers themselves. That was then. Now, the Internet of Things is poised to reinvent the whole 360-degree retail space.
KEY TAKEAWAYS OF IoT
Build a better customer experience with the Internet of Things. Now, sensors are on the market, which enable retailers to track customer paths via a store to identify differences in the shopping behavior. The insight could help managers enhance the layout of the store, minimize customer frustration and optimize merchandise placement.
Identity new opportunities. Connected platforms provides retailers with new direct channels to customers, gathering incremental incomes and a possible gold mine of customer date.
Increase effectiveness of supply chain. Shortages of inventory are a significant cause of customer dissatisfaction and sales loss. Smart shelves alert the staff to shortages before they happen, lowering manual work and providing staff more time for interacting with customers instead of managing inventory.
SHOPPERS ON PHONE, SHOWROOMING
Semiconductor chips have remarkably become smaller than ever, all the while more powerful and, probably most important of all less costly. Now is the point wherein a semiconductor could be attached and incorporated into almost anything and everything. Telecommunication networks have expanded and the whole world is now crisscrossed with webs of wireless and wired bandwidth, giving infrastructure for all ubiquitous chips to connect inexpensively. Big Data analytic platforms have been created and refined to efficiently and effectively collect, analyze, process and present the huge amounts of information made each second of every day. Technology and infrastructure convergence has made it easier to acquire, collect, analyze and share data. Over time, the price points have decreased to a level wherein it makes good business sense.
IoT PROMISES RETAILERS EFFICIENCIES AND DEEPE CUSTOMER RELATIONSHIPS
Forecast to constitute ‘the biggest device market in the world’ by the year 2019, the IoT promises retailers operational efficiencies and deeper customer relationships. It’s already here as retailers are testing or in full roll out of beacons, wearables, smart fitting rooms intelligent supply chains and many more. Operational efficiencies likely are the easier initial objective for retailers and could more rapidly yield a positive impact on the bottom line. To develop long lasting and deeper relationship with customers however, retailers should think in terms of how IoT could help customers solve or simply everyday concerns.
At present, retailers should stay flexible in an as-yet fragmented device market, while making certain that they have the data management requisite capabilities and permission from their clientele to start testing how they could reap operational gains and add real value to the lives of the customers. The connected things are making their way to the retail space as well, with the global IoT retail market estimated to grow to $36 billion around 2020, a compound yearly growth rate of 20 percent. One of the fastest growing IoT deployment technologies in retail is in RFID or radio-frequency identification tags and sensors, empowering companies to supply chain efficiencies, enhance employee performance, lessen waste and manage compliance requirements better.
CREATE BETTER CUSTOMER EXPERIENCE
IoT presents a chance for retailers to develop a hugely enhanced ecosystem, which connects physical and digital worlds, enabling real-time, and bidirectional interaction with consumers inside and outside the store. Retailers could leverage the data made by the interactions to boost the in-store experience of customers.
The true power of IoT lies in the opportunities that it presents to retailers to make new revenue streams. There are already many retailers that grow incremental revenues.