IoT in Retail: Unlocking New Opportunities

Internet of Things (IoT) can be described as the network of software applications embedded with sensors, software and other technologies to connect and exchange data with other devices and systems over the internet. Such devices can range from ordinary household objects to sophisticated industrial tools.

IoT has become one of the dominant technologies of the 21st century. Using low-cost computing, cloud computing, big data, analytics and mobile technologies, IoT can collect and share data between connected devices or things.

How does IoT help in Retail and what is its importance?

A continuous and seamless communication is now a reality between people, process and things. IoT spending in 2020 was $749 billion, expected to hit $1 Trillion by 2022. By 2023, this spending is expected to increase to $1.1 trillion. IoT allows retailers to connect between people and businesses to gain useful insight about product performance and engagement of people with products. It is estimated that more than 400 active IoT platforms are in existence as of date.

It helps improve customer experience in new ways and help brick and mortar shops compete with their online counterparts by engaging customers in different ways.

IoT can track customer preferences, analyze their habits and share relevant information to the marketing teams and help improve the product or brand features and design and keep the customer updated for new products, delivery status etc.

Benefits of IoT in Retail:

• Logistics and supply chain management - IoT provides an unparalleled visibility across warehouses, shelves and in-transit stock. This is extremely helpful in reducing costs and enhancing efficiency. IoT devices like RFID tags, GPS sensors can be used to get a detailed and a comprehensive view of the movement of goods from the manufacturing units to the warehouse to the retail outlet. It offers retailers an advantage through its real-time detection feature. It aids in factors like analyzing transportation time, ideal temperature for storing goods etc. This helps identify bottlenecks, plan for contingencies etc. It helps in reducing handling time, ensures efficient processing of goods, and ensures that receipt of goods can be planned for vendors and customers.
• Facility management - Retailers need to ensure that the premises are kept clean, attractive, safe and properly stocked. Numerous IoT devices can help in streamlining these tasks and reduce associated costs and stress. Using wireless IoT devices on shelves, stock inventory can be monitored and replenished as needed. Energy management is also easy using IoT sensors which can monitor temperature, lighting, ventilation and refrigeration. These sensors can provide a complete view of the consumption pattern, overuse, etc.
• Customer behavior - IoT can track customer preferences, analyze their habits and share relevant information to the marketing teams and helps improve the product or brand features and design and keep the customer updated for new products, delivery status etc. IoT can improve the overall customer experience in a significant manner with automated checkouts, integration of messaging platforms and order systems. Occupancy sensors provide vital data on store traffic patterns and also on the time spent at any particular area. This helps retailers for better planning and product placement strategies, with better effective display setups, space layouts and management.
• Traffic control - It can help in tracking the number of persons entering a facility. This type of tracking is especially useful in a pandemic situation, where it becomes necessary to ensure that no overcrowding takes place and distancing is maintained within the premises.
• Asset tracking - IoT helps in asset tracking in items like shopping carts and baskets. Sensors in the carts ensure that location data is available making retrieval simple, and carts can be locked if they are being taken out of a demarcated area. In 2022, asset tracking and monitoring revenue is estimated at $17.2 billion, going up to $37.7 billion by 2030.
• Personalized shopping - IoT devices can and are being used to personalize the shopping experience. Beacons can send personalized real-time alerts to phones when the customers are near an aisle or a store. Such alerts prompt a customer to enter the store or look at the aisle area to take advantage of offers. Consumer media and interconnected devices revenue in 2022 will be $101.8 billion versus estimated $203.1 billion in 2030. IoT based beacons can target customers, collect user data and send hyper-personalized content to customers.
• Smart shelves - Smart shelves are another example of innovative IoT ideas. Maintaining shelves to refill products or ensure correct items are placed in right shelves is a time consuming task, and simultaneously detecting any potential theft. Shelves fitted with weight sensors and RFID tags can scan for products on display and on shelves and can send alerts to the staff when the items fall below a specified quantity.

IoT technology has revolutionized the retail sector in new and better ways. Digitalisation or digital transformation of brick and mortar stores is not a new concept. With every industry wanting to improve their services and facilities and trying to stay ahead of the competition, use of IoT is playing a big role in this transformation. To summarize, IoT helps in enhanced data collection, helps data driven customer insights, gives a better customer experience, increases profits and productivity. It encourages a digital culture. For retailers looking to transform their business using IoT, an experienced IoT mobile app development company can offer the right insights.