How Internet of Things Is Revolutionizing the Retail Industry

The Internet of Things has been one of the most buzzed bywords in the tech industry the last few years, because it’s simply astonishing. At the heart of it is the possibility of people and gadgets interconnecting with each other. Through the Internet, people can connect with other people, people can connect with gadgets, and gadgets can connect to each other.

What Is the Internet of Things?

The concept of IoT involves the idea that just about every gadget can connect to other gadgets and to people through the Internet. A lot of factors have come together to make the idea possible:

  • Most people have access to broadband Internet, and they can also go online even on the road.
  • Just about everyone has a smartphone, and these gadgets act as one of the main hubs for all these connections. People use smartphones to control apps that manage gadgets, and because of the Internet these gadgets can be controlled remotely.
  • A lot more smart devices are being made with Wi-Fi connectivity and various sensors.
  • The costs of these items are going down. So just like the PC and the smartphone, pretty soon everyone from retailers to consumers will have smart interconnecting devices.

Connectivity can be seen in various ways. Your alarm clock can go off in the morning, and it will automatically turn on you lights, raise your blinds, turn on your TV or music, and set your coffeemaker to brewing.

Home security setups are also often connected. If your door lock gets the wrong code or your motion detector senses movement around the house, the alarm comes on, the video camera records what’s happening, and the lights go on. You’ll be sent an urgent message on your phone and you can even see the video or the real-time events at your home, so you can call 911 even if you’re in another country.

Obviously, it’s astonishing and revolutionary. But it’s not futuristic, or at least some parts of it. Its effect on the retail industry is already being felt, and in the future the change can be seismic.

Smoother Customer Experiences and Retailer Operations

There was a time when retailers absolutely loathed how the smartphone affected the way business was done in stores. A customer can look up an item online, and they may not buy the item if they find negative reviews or a better alternative when they go online. They may also buy the product elsewhere when their research shows them a store with lower prices.

But retailers have accepted this fact of life these days. Now they have also realized that a customer with a smartphone can be a great customer to provide for with an app and IoT technologies.

  • Customers can create grocery lists with the help of smart refrigerators, which can sense if they’re running low on certain items.
  • Customers can connect their grocery lists to smart grocery carts, which can then guide them to the proper location of the items in the grocery list.
  • There will always be adequate lighting in all the grocery or shop areas where there are people walking. This is done with sensors connected to lighting equipment. This can help retailers save electricity.
  • Smart thermostats can make sure that the temperature is always comfortable for shoppers.
  • Smartphones can be used to scan item barcodes so that they can get additional product information.
  • Retailers can be notified if particular goods are running low on the shelves. They can then resupply without waiting for the item to completely run out.
  • In clothing stores, smart mirrors can allow shoppers to see what they will look like with a particular article of clothing. Customers won’t have to actually try on the clothes.
  • Retailers can use automatic product scanning for contactless checkout.

Buyer Behavior Analysis

Many shops, and especially grocery supermarkets, are fans of using psych data to help them sell their stuff. They put the essential stuff at the very end so you’re exposed to the other items they’re selling, they put kiddie items at kids’ eye level, and they play relaxing music.

But now, IoT technology can help them learn so much more. They can do more too, including offering discounts based on shopper locations.

Inventory Tracking

It’s not enough that IoT can notify the grocery people about items running out. It can make tracking inventory much easier so that they can make items available when the customers want them.

With IoT technology, prices can even be changed in real time depending on the demand for the products. Low-selling or promotional items can be marked down, while in-demand items can have higher prices. It’s also possible to change prices so that they can match online prices, which can then keep customers from having to buy online instead.

In addition, the technology can also help with employee thieving and shoplifting. These crimes cost the retail industry more than $45 billion in just 2015. Shoplifting has become even more brazen, as the average loss for each incident was $377 in 2015. In 2014, the average was less than $60.

But IoT can have products tagged so that information can be gathered and thieves can be apprehended. It may even be possible to help recover items. This is done with radio frequency ID tags.

So How Do You Prepare for IoT?

Now you may think that all this is just a pipe dream, like hover cars and commercial spaceflight for everyone. But IoT is coming. You need to be prepared if you’re in the retail industry.

That means gradually transforming your corporate culture into becoming more welcoming of IoT technology. Tests can be conducted so that various IoT technologies can be tried out. These new solutions must be insistent with your business strategy.

You’ll also need to prepare technologically. You can start slow and gradual, but such advancements in customer experience can set your retail store apart.  Eventually, using IoT will be just like having a website or offering apps—every retail company will be doing it.

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