In the face of online competition, retailers need to invest in transformational initiatives more than ever. Increasingly, customers expect an omnichannel experience (Hossain et al., 2021) at each touchpoint. Customers want to find the correct data at the right time and location. Retailers need to transform to improve their margins and improve the customer experience. IoT should be a part of retailers’ business transformation. Here are ideas on why and how.
The time is now for retailers. Retailers have a lot of IoT devices, and the number of them will continue to grow. There are barcode scanners, RFID tags, intelligent kitchen appliances, cameras, and more. The challenge for retailers is integrating these objects into their enterprise technology stack to reduce costs and improve performance through real-time data analytics.
Business Transformation through IoT has already started. 37% of food and grocery organizations are exploring IoT innovation or have effectively started IoT services. 58% are growing their use of IoT innovation.
IoT generates data. Increased access to data creates opportunities to create new business models (Sharbaf, 2022). New business models include improving the customer experience (which drives revenue) and operational excellence (which reduces operating expenses).
Area-based advertising through location-based awareness enables retailers to connect with customers and provide a personalized, omnichannel experience. Consumers can receive relevant, personalized, and timely promotional material through their mobile device, in-store via Electronic Shelf Labeling (ESL), or digital signage.
In-store navigation makes it easier for customers to find their products, leading to increased purchase rates and reduced staff interactions.
The retail industry is very competitive and operates on narrow margins. Retailers must deal with an unpredictable supply chain and a high-turnover labor market. IoT increases worker productivity and improves back-office operations.
Measuring the environmental conditions within the store and in specific locations reduces waste, including refrigerated, frozen, and fresh produce. Smart energy equipment management assists in managing a store’s energy utilization to reduce individual store operating expenses and increase security.
Inventory management is improved through real-time visual information gathered through IoT and analyzed via automated systems to predict stockouts. When combined with external information such as weather, local social events, and consumer behavior, stockouts and excess inventory are reduced.
Hossain, M. S., Chisty, N. M. A., Hargrove, D. L., & Amin, R. (2021). Role of Internet of Things (IoT) in Retail Business and Enabling Smart Retailing Experiences. Asian Business Review, 11(2), 75–80. https://doi.org/10.18034/abr.v11i2.579
Sharbaf, M. S. (2022). IoT Driving New Business Model, and IoT Security, Privacy, and Awareness Challenges. 2022 IEEE 8th World Forum on Internet of Things (WF-IoT), 1–4. https://doi.org/10.1109/WF-IoT54382.2022.10152044