Will the Internet of Things transform retail as we know it?
The Internet of Things (IoT) could transform retail by providing access to in-store analytics and enabling interactive consumer engagement.
An IDC Retail Insights report highlights how consumer demand for convenience, product availability and personalised and contextualised interactions will drive retailers to adopt multiple IoT technologies.
The report states common IoT retail use will include product tracking and traceability, interactive consumer engagement and operations, smart operatives (including interactive consumer engagement), mobile payments, fleet management and asset management.
Forrester Research has recently released a report on IoT and retailers, with principal analyst Adam Silverman leading a team that interviewed 19 retailers including IBM and Motorola Solutions. The report found IoT technologies, such as beacons, store analytics and fulfillment programs, is fundamentally changing the way stores operate.
Silverman says, "While 68% of customers use a mobile device while in a store, retailers are just beginning to take an active role in that in-store digital experience."
According to Forrester Research, retailers will use technologies such as Wi-Fi, Bluetooth, GPS positioning and advanced video analytics to look into how customers are interacting with the store.
They will be able to look at which areas are visited, which displays capture attention, which sales associates they engage with, and how all of these factors contribute to what customers are purchasing.
Instead of simply knowing how many customers come through the door, retailers can “measure the conversion rates of customers who enter after viewing a store window.”
This information can be paired with databases and analytics about a customer’s purchases to see their shopping habits and respond with targeted, personal offers.
On top of this, the same technology can be used to manage inventory in real-time, so appropriate stock can be replenished and shop-lifters can be caught.
"eBusiness leaders who seek to rapidly deploy new digital store capabilities will require the agility to swap out modular components to create a retail store “ecosystem of value.” In order to achieve this state, the store must act as a platform, connecting functionality together with a common set of data," says Silverman.
Shish Shridhar, Microsoft director of business development, retail, says, “While there are some barriers to overcome, retailers seeking to build their business through IoT are advised to partner with their technology vendor and start small, using insights from a pilot deployment to build a use case for a broader implementation."
Microsoft's IoT retail strategies combine loyalty programs with point-of-sale devices, in-store customer tracking and social media.