The IoT in retail industry has been witnessing vibrant advancements over the past few years, owing to the dynamic market share battle between the e-commerce and the brick and mortar stores. A common entity gaining weightage in both these retail platforms is digitization. Undoubtedly, the integration of the physical and digital world is taking place at a pace beyond human comprehension. The Internet of Things, which is no more a thing of the future, has already created a disruptive spectrum across all the industries, retail being no exception. With increasing digitization and connectivity, the expectations of consumers have risen subsequently. Be it any retail platform right from the outlets, e-commerce websites to even a purchase via customer care phone call, a seamless shopping experience is the what consumers demand.
IoT in retail industry has gained a heavy momentum and is poised to disrupt the traditional retail trends over the coming years. The e-commerce sector has benefited tremendously via IoT in retail adoption. As per the US Department of Commerce, e-commerce market in US recorded an Y-O-Y growth of 16%, hitting USD 97 billion in Q2, 2016. It is worth noticing that this was the highest growth rate recorded ever since Q3, 2014.
The consumers today are digitally empowered with product data being just a touch away. Smartphones, wearable devices, and a series of interactive interfaces have made the access to the desired products much easier than before, enabling a next-level customer satisfaction cycle. Enterprises have embraced the connected era quite well, which is quite evident from the exponential increase in the connected devices sales. The Internet of Things, aptly titled ‘the Fourth Industrial revolution’ will highly impact the retail industry over the years to come. Studies suggest that more than 70% of the retail enterprises have some IoT projects in pipeline, which depicts the extent to which the Internet of Things is about to disrupt the traditional retail approach worldwide.
Let us have a look at how the Internet of Things is revolutionizing the retail space, indeed at an appreciable pace.
How IoT in retail industry is helping the organizations to increase the profit margins?
Inventory management is one of the top concerns of the retailers. IoT in retail stores helps the retailers get an exact idea of the inventories, avoiding the cost burdens due to oversupply or shortage situations. RFID (Radio frequency identification), which has become an important IoT tool in the retail outlets is being popularly used for inventory management. As per a report by Global Market Insights, Inc., approximately 29% of the printed and chip-less RFID market is shared by the retail industry. One such implementation of RFID is exhibited by Levi’s showroom in San Francisco where Intel’s RFID tags are allocated for each item enabling an accurate inventory management.
Moreover, the real-time data access can help to adjust the pricing, shuffle the inventory, and enable better observation of the sales activities in retail stores, thereby enhancing the ROI.
Can IoT in retail industry redefine in-store consumer experience?
IoT is the technology backbone, which is improving customer service with data-directed sales support. Retail has seen a lot of action with the advent of online stores with over hundreds of e-commerce companies constantly changing the outlook of consumer shopping. A recent study report stated that, more than 95% of retailers are ready to bring IoT in retail into practice in the hope that it will strengthen their consumer relationship by painting a complete new picture of customer experience. AR/VR technologies are very relevant in customer engagement, as they are creating a prominent impact on the look and feel of the stores. Deployment of these technological offerings will surge Augmented Reality Market in e-commerce and retail verticals.
The concept of IoT in retail industry is dramatically reshaping segments with more intelligence and more connectivity to the objects around us. Say for example, smart mirrors enhance the shopping experience by letting customers virtually try on clothes. This gives an added convenience for the shoppers by avoiding the chaos of fitting rooms. Also, smart mirrors allow customers to use a touchscreen on the mirror to access the product details, ring or message an associate to bring the product to them, or even view the lists of contextual product in a specific size. Another technology that’s powering the smart shopping experience is the Apples iBeacon. These beacons can detect the location of a customer and capture their attention by promoting offers on their smartphones, providing access to speed checkouts, and also search inventory, thereby engaging with customers in a more personalized manner.
What are the new technological aspects of IoT in retail industry?
Many companies are already taking full advantage of the IoT in retail trend to turn their store into a place of entertainment. It is very clear that IoT in retail industry has made a significant impact, right from the shopping experience of the customers to making retailers more profitable, unique, and efficient. It is estimated that the IoT in retail industry will reach a potential value of over USD 1 trillion by 2025.
With digital transformation of retail industry, consumers become more aware of their possibilities. For instance, the emergence of “Connected Homes” has set an example in building entirely new channels and revenue streams in this business space. The Smart home industry is embarking its significant presence in every corner of homes leading to easy control of household appliance via smartphones and laptops. This has further helped the retailers connect products and provide one integrated platform with existing e-commerce channels. Improved access to knowledge and technology will help retailers drive more targeted offers, create new channels, boost profits, and grab new opportunities. Smart Cities, smart homes, and connected cars could be the emerging areas of focus for future customer engagement.
On the flipside, it will not be an easy path to success for the field of IoT in retail industry. The growth can be hampered by the cultural and technological challenges such as privacy, technology integration, security, and data ownership. But it is important for retailers to take steps now to lay a foundation for IOT support in the future. After all, IoT is reputed for the behemoth of opportunities it provides to retail merchants for generating lucrative revenue streams via expansion across new channels. This will prompt business professionals to work hand-in-hand with IT leaderships to bring new ideas and technologies in the retail industry by embracing the Internet of things.
Putting all this together, it is quite evident that IoT in retail industry is set to be the next disruptive trend revolutionizing the traditional retail approach, transforming the notion of smart retail industry into a reality, indeed at a quicker pace than envisioned.
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