How Internet of Things (IoT) Technology is Used in Retail
Retail is a tough business, and keeping customers happy (and buying) requires a bit of a juggling act. Customer experience, payment processing, and smart inventory control come together to create a retail environment that is easy, pleasant, and above all, conducive to sales. Retail is a highly competitive space, and both brick-and-mortar stores and online retailers leverage new technologies to give themselves an edge wherever and whenever they can. One of the latest technological trends to hit retails around the world is the Internet of Things.
A great deal of research and thought has gone into applications for IoT across all industries and in all fields. In the retail space, tech giants such as Cisco have weighed in, as have marketing and business development think tanks like Accenture. The retail industry is already seeing enormous gains through the adoption of IoT, and according to a Forrester Research survey, the majority of large organizations (companies with at least 1,000 employees) have firm plans to implement IoT into their retail components.
There is a wealth of information available on how IoT has transformed the retail world, and much of it is immediately visible simply by looking around at how we shop. Here are some of the most impactful trends we have seen in the retail IoT space.
Smart Inventory Management
Before any retail sales can be made, of course, there needs to be product to sell. One of the best applications of IoT in retail is in ensuring that store shelves remain stocked, perishable goods don’t expire, and nothing walks away in a shoplifter’s pocket. By implementing IoT techniques like RFID or NFC tags, or simply being diligent about scanning ordinary barcodes or QR codes, smart inventory control systems can ensure that each and every item in a retail establishment is tracked and controlled at all times.
This has more benefits than simply setting off an alarm in the event of a shoplifter. Sales forecasting and product reordering, historically a bane of the small retail operator, can be largely automated. By collecting data on sales and spoilage, a smart inventory system can advise a store owner which products sell, when they sell, and how many units they will sell. IoT excels at data analytics, and inventory management solutions like Stitch offers reports on every aspect of the retail process, from stocking multiple retail locations to forecasting future needs based on the time of year.
The other key to retail is in customer experience. Buyers, whether visiting online retail sites or brick-and-mortar stores, are notoriously fickle. The typical customer wants to come in, find what they need quickly, pay for it almost instantly, and leave without any hassle. A quick payment processing solution benefits everyone involved in retail, from the cashiers to the customers, and even the other customers in the store. Everyone has experienced the frustration of waiting in line while a customer struggles with their checkbook.
One of the greatest innovations in customer experience, at least in brick and mortar, comes from the world of IoT. NFC payments are today built into most smartphones, and includes platforms from Samsung, Google, and of course Apple.
These payment systems are faster, easier, and even more secure. With support to carry data from multiple credit and debit cards within a single device, paying for purchases is as easy as pressing a button. It’s faster, too, as customers can typically find their phone faster than a particular card in their wallet. Finally, by leveraging the advanced security features on modern devices, like Apple’s TouchID biometric fingerprint scanning technology, the likelihood of a fraudulent sale decreases dramatically.
NFC payments have a definite “cool factor”, as well. Waving one’s phone near a terminal and receiving a cup of coffee or bag of goods in return is a novelty that has not yet worn off for most users. It’s not surprising that Apple Pay drove 1% of all retail sales in November of 2014, and the platform and technology have only picked up steam since.
Leveraging IoT to Create the Ultimate Customer Experience
Payment processing isn’t the only way that the Internet of Things can be leveraged to improve customer experience. Another area in which IoT is applicable to retail is in driving customer loyalty. IoT-enabled devices can, for example, troubleshoot themselves.
Modern printers and appliances often come with user guides built into their memory, ready to be called up on a screen. Changing the ink cartridge on a printer, once a tedious exercise in trial and error, is now quick and easy, guided along by a step-by-step process on the printer itself. By using sensors already built into the printer, devices from Brother, HP, and others can intelligently detect if their lid is open and if the cartridge has been removed or replaced, and display the relevant next step to the user. No more struggling to align the cartridge.
This type of informational content included directly in the product itself reduces customer frustration. This, in turn, reduces returns and warranty claims, and increases the likelihood that customers will recommend a product to their friends.
The Amazon Dash Button
Amazon, as the single largest eCommerce retail establishment, continues to innovate and lead the path in creating and retaining customers. One of their latest forays into new retail technologies involved a unique application of IoT.
The Amazon Dash Button is beautiful in its simplicity. At its core, it is simply a button that, when pressed, places an Amazon order for a product. Inside, the button is Bluetooth enabled. It pairs to the owner’s smartphone and uses the existing Amazon mobile app to place the order. The specifics of the order, such as quantity and flavor, are set up when the button is first paired to the device.
Like most of Amazon’s projects, the true genius lies in the details. The Dash is not marketed as a single generic device, but rather is branded with Tide, Red Bull, Bounty, and the various other products currently available to order. It comes with both an adhesive backing and a hook, allowing the Dash to be placed directly in the cabinet or next to the items to be ordered. Finally, the Dash generally comes with a $4.99 credit, letting it pay for itself with the first order.
All of this adds up to making the retail customer experience completely effortless. Buying paper towels or energy drinks from Amazon is now so easy that it can literally be done with the push of a button, and that button is sitting next to the empty cupboard. Customers don’t even need to remember to place the order until they are in front of their computer or device. This kind of smart application of IoT and other technologies is the reason Amazon remains on top.