How the Internet of Things is Revolutionizing the Retail Industry
Online and offline shopping have long been very different experiences. Ever since e-commerce gained a foothold and consumers became more accustomed to convenient, personalized shopping, traditional retailers have been under pressure. As shoppers increasingly moved from stores to smartphones, making purchases with the tap of a finger, the retail game changed.
Longstanding retail chains like Borders collapsed in the wake of Amazon’s success, and e-commerce allowed niche brands to find a loyal audience. Deloitte found that the top 25 established retailers have lost $64 billion in market share to smaller players, fuelled by digital transformation. However, with the rise of the Internet of Things, the line between online and offline has blurred. With insights from sensors and smart devices, physical stores are now able to challenge established ways of doing business, offering more tailored experiences and incorporating digital elements into the shopping journey.
The new retail landscape
The world’s most successful retailers now use physical and online stores as part of a seamless integrated marketing strategy. In the new digital ecosystem, customers can interact with your business however and whenever it suits them, from social media and email marketing to TV ads and in-store promotions. IoT technology helps to connect all of these channels by providing physical stores with the same capability for personalization and data-capture as online platforms.
The shopping experience of the future will be filled with sensors, from digital ad screens in shopping malls that use facial recognition and beacon technology, to smart barcodes that provide customers with product insights. This data will also transform the efficiency of business operations – an eMarketer study found that 80 per cent of retailers believe IoT will drastically change the way they do business.
Here are three ways IoT will continue to revolutionize the shopping experience for your businesses and your customers:
Better in-store experiences
IoT has provided retailers with greater opportunities to customize in-store experiences and increase efficiency, improving the experience for customers. Combined with customers’ smartphones, IoT technology provides access to product information and can send targeted offers. For example, customers can scan products to get more details about available sizes or colours. They can also sign up to receive SMS notifications of special deals while in-store. When combined with wearables or other smart devices, sensors placed strategically throughout stores help staff improve customer service. A sensor near the counter might trigger an alert to an employee’s smartphone once a customer has been standing there longer than 30 seconds. This means employees can provide faster assistance to shoppers while also balancing other tasks.
While digital marketers have made leaps and bounds with tracking the customer journey online, the same insights haven’t typically been available in physical stores. By using sensors such as Bluetooth beacons, retailers can now track customer behavior by following smartphones throughout the store. This helps businesses better understand the journey customers take before purchasing, as well as improving placement of products or store layouts. Insights gathered from connected devices also have significant operational benefits, helping to make repeated processes more efficient. For example, smart shelves can send staff a notification when they’re empty and need to be restocked, while also giving managers the ability to change prices remotely to shift end-of-season lines.
Automatic online orders
It’s not just physical stores that will benefit from IoT adoption. E-commerce stores will increasingly see customers using physical objects to make online orders and automate the purchase process. Amazon pioneered this with the Dash Button – a device placed around the home that reduces the purchase of household staples like milk and toothpaste to a single click. There are already smart fridges that allow users to order food from a screen, but it’s likely that fridges will soon be able to scan for products and automatically order pre-determined items like sparkling water or a favourite brand of cheese when supplies run low. This technology will make people’s lives easier and help trusted brands establish closer connections with customers.
The market saturation of smart mobile devices and the rise of IoT technology are disrupting the traditional retail industry and shifting customer expectations. IoT allows your business to provide personalized, hassle-free experiences and customers will increasingly expect this level of convenience – both online and offline. They’ll soon also expect devices to act autonomously and automate purchases. With access to more data than ever, retailers have an opportunity to refine the customer experience with an integrated approach, helping to increase customer loyalty and gain competitive advantage.