How IoT is Revolutionizing the Retail Customer Experience

Prashant Kumar, Founder & CEO, TechBlocks
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Implementation of IoT is becoming easier through falling hardware costs, productivity gains, and the focus of major players such as Microsoft with their Azure IoT Suite. As it grows in scale and accessibility, IoT will fundamentally alter business operations and customer interactions. One of the industries that will benefit from IoT is retail, in fact it’s already starting to happen. A look at some of the customer experience benefits of IoT for retail includes the following.  

Smoother In-Store Experience: 

In general terms, IoT sensors can be strategically placed in different areas of the retail store, and on the merchandise itself in order to relay real-time information. For example a motion sensor can be placed near the checkout line, and an alert can be sent to sales staffs if the sensor detects people are waiting in line past certain acceptable times. The sales people conducting inventory management in the back of the store can proactively help run registers during busy periods. Sensors can also but added to actual store product. When the product is placed in a consumers cart a signal can be sent to their mobile device which is equipped with an automated payment app – they can avoid standing in line altogether.

  Retailers should look at IoT as a “problem-solution” to the increasing demands of today’s digital consumer 

Customers want to make the right purchase for their needs, complete it quickly, and then move on with the rest of their day. Consumers will expect the user experience of IoT to be simplified and accessible through their mobile devices. So they can check “in-stock” status, grab instant coupons, and even develop robot-guided shopping lists – all through their phone or tablet. On the back-end, the merchant will use all of the IoT data gathered to adapt the in-store experience to the consumer’s needs, so shopping is personalized and easy to accomplish.  

Consider a clothing fitting room that is equipped with sensors and an interactive touchscreen. The sensors tell the screen which items the customer is trying on, and the display can then suggest complementary items to go with the items.  

Personalization: 

Other sensors can be affixed to product areas, and can be triggered by consumer actions. The retailer could offer, for example, instant discounts or detailed product descriptions straight to the customer’s mobile devices in response to where the customer is shopping within the store. This type of IoT structure is the ultimate in customer personalization and relevancy. It not only provides a better experience but can also help retailers boost in-store sales and size of basket. It’s a win-win for both. Another development is “smart shelves” that can detect actual inventory and send simple alerts to other parts of the supply chain notifying the appropriate person when stock is low.  

An interesting branding/IoT strategy can be seen with Amazon’s development of a “Dash Button” that is a company-branded Wi-Fi connected device. For example, Tide detergent has a branded device that the consumer sticks to the side of their washing machine. When they are running low on detergent, the consumer simply presses the button, and a new Amazon order is generated.  

The challenge for retailers will be keeping pace with both technology and customer expectations. Once some retailers dive fully into IoT, then consumers will expect the same level of relevancy and streamlined process from other retailers. 

IoT Benefits for Retailers 

Implementation of IoT brings a range of benefits for retailers – mainly a better understanding of how their customers interact with merchandise and the store itself. IoT enabled devices can provide data on shoppers’ behavior, find issues in store operations, and pinpoint underperforming merchandise lines. Additional benefits for merchants include: 

• Real-time inventory management based on product sensors such as RFID tags in clothing. Retailers can immediately keep track of inventory stock while also building an understanding of the customers’ preferences. 

• Companies such as Disney utilize RFID-enabled wristbands that provide theme park entry, access to hotel rooms, and a payment method. Retailers can establish similar models with cards or wristbands that unlock “VIP” areas of the store or preferred pricing. These tactics can increase customer loyalty and the amount of time they might spend with the particular brand. 

• Stores with personalized messaging and better managed inventory levels are more likely to convert shoppers into actual buyers and maintain brand loyalty. 

Retailers should look at IoT as a “problem-solution” to the increasing demands of today’s digital consumer, where they consider the customer experience as the foremost priority. With e-commerce many brick and mortar retailers are experiencing lower than average in-store activity. IoT bridges the gap between the digital and non-digital world and takes the experience people love online into the real world. 

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