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Retail Technology: How IoT Can Transform Your Retail Business?

September 6, 2016

The world is moving into an exciting space at a faster pace. The mad as march things VR and AR can do is a minuscule of the firework show up ahead. Perhaps, the Internet of Things (IoT) clan are the ones making way for it. As you already know, IoT is a system of interrelated computing devices, mechanical and digital machines, objects, animals or people that are provided with unique identifiers and the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction. IoT is an iron in the fire. We are looking at $US 19 Trillion worth opportunities by 2020. YES! WITH A T! Very soon, with the emergence of the IoT technology, some of the fantasies you thought can be pulled off only in a Sci-Fi movie is becoming a run of the mill.

IoT-retail

The window blinders opening when your alarm goes off. An alternate route suggested on your phone instead of your regular jogging route as there is an unexpected traffic. Your car waiting for you at your doorstep while the garage doors opens and shuts without bothering you. Your kitchen making an order of the vegetables and groceries to restock. The light and temperature controller of your living space optimizing the settings relative to the weather and the climate conditions to save energy and to set to your needs. If you have not seen any of this happening already, you’ve a lot of catching up to do. The technology and products available today lets you do this – nothing fancy yet!

eMarketer estimates retail global sales to top $US 27 Trillion in 2020. If the retail industry look into the possibility of teaming up with IoT, we are looking at $US 46 trillion worth opportunities give or take. With IoT, retail industry will not only be able to give an exceptional In-Store experience – inventory management & supply chain operations can be improved, new channels & revenue streams can be created.

In-Store Experience:

As AR and VR is creating a spectrum of new experience for customers, there is hope that the world is in safe hands for the Sci-Fi enthusiasts in us. AR and VR are scaling experience to a new level. Product placement at a location can be judged with relative size of real time images- from a couch to a table or that bedside lamp you wanted, you can view them all on an AMOLED screen or a retina display screen and see how they fit out need in the location we want. Technology today supports to record and display 8k videos, which should cover the details we want in the quality of images and display. You can see how an apparel or footwear will suit you without even wearing them. Oculus Rift and Hololens have already shown signs of the spiffy things you can do.

The reality of IoT kicks in when the store identifies you from the moment you enter the building. An In-store map on the cart is something that will assist you to discover new products and take you through multiple aisles to help you identify products you want to buy from your list. As you move around the building, imagine the shelves, racks all identities you and gives custom notifications on a display. Something like ‘Welcome back Linda! The xyz shoe you were checking out last time is on a 10% discount sale!’. You don’t need a discount sale to get someone’s attention all the time, but the part where the shelf or the rack identifies your interest and then gives you a personalized notification and offer is what will possibly bring you back to the store. A happy customer aligns your business strategy on the right track!

Scanning a barcode or QR code to show product information will assist a customer’s decision making. Along with product information, an AR ‘Try on’ feature, checking reviews and social media commentary, finding other colors or sizes on the retailer’s e-Commerce portal widens the customer’s choices.

There are instances where you feel the retail stores are packed and stuffy. IoT can disrupt the shopping experience. Imagine only single pieces of the products are displayed across the store and a customer can shop without even carrying a cart. To do this, you just need a large physical storage for your inventory which is not displayed – however you reduce the distance required for a customer to walk around and see all the products displayed. So how are you making them buy the product? There are few or more ways to look into the operations. A simple way to do it is scanning a reference code on the retailer’s mobile App – giving option to the consumer to choose quantity or maybe different sizes. A conveyor belt connecting the checkout point of the store will help you pick up the stuff you wanted before the payment. If you haven’t picked them up from the conveyor belt, a scanner towards the end of the belt as it goes back to the storage area will identify if the customer has picked the product or not. Call to action buttons on the App will solve all the details of the operation and sale. If not the conveyor belt, the products can be shipped directly to the customer’s delivery location.

Contact less payment is going to be taken care off through Android Pay and Apple Pay. The mobile devices manufactured these days are equipped with NFC and fingerprint scanner which is what is needed for Android Pay and Apple Pay along with your banking details setup with the App. Time you spend waiting on a Queue is going to significantly reduce. Unless there are customer escalations, the need for human interaction can be brought to minimum. You will no longer be greeted by a grumpy person at the point of sale.

Assuming that the retail store already has an eCommerce Application, data like customer behavior, interest can align digital signages and push notifications leading the customer to other areas in the store which might help them discover more products. A pattern can be found on the purchase characteristics of various categories for all the customers. Reminders in the form of push notification and SMS will boost sales. The digital signages can display real time information on inventory, new products and simple interactions.

Inventory Management and Optimize Supply Chain: Supply chain and inventory management has seen several reforms over time. IoT will help optimize operations in complex supply chain. The sensors in the shelves or racks can track the availability of the products which are displayed. When the availability reaches certain number, immediately it can be flagged and bring it to ones notice that it should be restocked. A rule can be set to let the supplier know as and when the availability of a product has reached a number. This also helps the supplier to track the sales real-time.

Using smart tags which are connected, managers can adjust prices real time for low-turnover items and increase pricing on high demand items – including a real time comparison of price in multiple channels. Between the shelves, registers and inventory management softwares, demand supply gap can be reduced. Using RFID technology and data visualization, customers and suppliers can track products across the supply chain even in the case of a custom order. From production to distribution, real time tracking makes it easier for the governance. The APIs from inventory management software talk to other systems like the shelves, databases or anything that’s connected to the IoT system of the store.

New Channels & Revenue Streams: IoT expands the channels through which the customer is connected to the retail store. Every retail store (of the same brand – or whoever is connected to each other) providing a personalized experience gives the customer a reason to build a trust with the brand. Every activity that a user engages with the brand in the store or in the eCommerce App is adding to an ocean of data that can be monitored, studied and tracked to provide easier, safer and efficient service across multiple channels.

Connected platforms can work together to provide better service for products like grocery; especially dairy products and vegetables. If the containers that these are kept – cans, trays, refrigerator – are equipped to monitor the condition and quality of these products, they can alert the customer as the quality is degrading or the quantity is reducing. The containers can also talk to the supplier and let them know that they have to be restocked.

Bottom Line:

Setting up IoT infrastructure is a solid investment in hardwares and networks. Not all the devices or infrastructure has to be replaced, additional hardware with sensors and connectivity will enable shelves or carts or any retail infrastructure to talk to each other. The softwares will need to start exposing the APIs to share real time information on the inventory management and tracking the numbers. Cloud based support, encryption, data sovereignty are the other vital facets that should be thoroughly thought through.

Timely investment is well worth it as it will significantly improve the quality of service, experience, real time inventory management and faster checkouts.

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