A customer enters a multi-brand clothing outlet to purchase his favorite blazer. He reaches the suit rack and points his smartphone camera at a 3D barcode tag clipped to the apparel. On cue, the retail store’s app directs him to the FITTING room, where it delivers the selected blazer through a chute. This scenario is now a reality, with the Internet of Things (IoT) facilitating efficient retail operations through the integration of sensors, smartphone apps and back-end automation.
Today, global retailers are deploying video surveillance cameras and other devices, besides leveraging social media and customers’ mobile data, to predict emerging trends and drive profits. As retailers begin to realize that shoppers factor in social media commentary when making their buying decisions, they are gradually expanding their online presence, and offering smartphone and tablet apps. Social media also provides them with a great opportunity to capture and analyze user data. Additionally, real-time data analysis enables retailers to track shopper requirements and prepare their staff for efficient customer service.
By 2018, IoT is estimated to account for 9 billion connected devices globally, significantly more than the current 1.9 billion devices. In the commercial segment, the retail sector could lead the adoption of connected devices. Smart retailers are already optimizing store layouts, fixtures, and product offerings through connected devices, to gather data and enrich customer experience. In retail stores, connected vending machines, electronic displays, digital signage, and other devices can help recognize customers and deliver them customized content. Retail chains are also installing sophisticated screens and connected data sensors at their brick-and-mortar stores to analyze data from their customers’ online and mobile transactions. Furthermore, the development of big data analytics helps them generate valuable insights from precise information on customer preferences and behavior.
Consequently, retailers are building shoppers’ trust by sharing relevant data with customers. A recent survey suggests that about 51 percent of online users are comfortable with retailers collecting personal information, provided they get personalized recommendations and rewards in return. In fact, industry research indicates that retailers could have realized an additional $99 billion in sales in 2013, if they were more connected across their operations.
Apart from engaging customers, retailers are also adopting IoT to train and empower employees. They can now share best practices, operational alerts, and offer mobile training kits to their personnel. In addition, employees can provide real-time feedback on products and promotion performances to their managers.
Furthermore, smart retailers can successfully leverage existing technologies, such as barcoding and radio-frequency identification (RFID), to keep track of their inventories and manage the supply chain. For instance, shelf sensing technology constantly monitors the items in a store and places orders when inventories drop below certain levels. Retailers can also track goods movement through RFID and interconnected sensors, employing data capture. And with most items currently RFID tagged, retailers can now document sales data and retrieve it later for analysis.
Do you think IoT will transform the way retailers cater to their customers? Share your views with us in the comments section below.