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How IoT is revolutionising the retail landscape

By 4th June 2018Blog, Retail, Show on Homepage, Technology

Since the phrase “Internet of Things”, or IoT was first conceived in 1999, the concept of connecting physical devices to the internet has been gaining significant momentum. From sports watches to fridges and thermostats to security systems, everyday objects are now being turned into “smart devices”, collecting and sharing data via the internet. Virtually anything with an on/off switch can be brought into the world of IoT, adding a new level of digital intelligence to improve usability and experience.
The ability to connect objects and systems via the internet presents a huge opportunity for many organisations, especially retailers. There’s no end to the possibilities that can be explored, and many are already finding news way to improve customer experience with this technology.
Internet of Things (IoT) in retail

How retailers are using IoT

Bluetooth beacon alerts
Thanks to Bluetooth geolocation, retailers are able to send shoppers promotional messaging to their smartphones via beacon broadcasting. As long as customers have downloaded and enabled the mobile app, they will receive relevant offers based upon their preferences and proximity. With users required to register an account, retailers can collect data on who is receiving their messaging, at what time and location they received it and, most importantly, if the messaging led to a sales conversion or customer interaction. At the end of a campaign, retailers can analyse the data collected to highlight customer shopping patterns to improve future promotional messaging.

RFID tracking
Although Radio Frequency Identification (RFID) is not a new technology, retailers are discovering news ways to digitise products and their stores to transmit and receive information. The most widely adopted use of this technology is for driving efficiency and accuracy of inventory. By outfitting individual products with unique tags, retailers are able to ascertain exactly what stock they have and where it is, helping to minimise wastage and unavailability of products.

Some retailers have taken RFID technology one step further to improve the shopping experience. Fashion retailers are experimenting with augmented reality to create interactive fitting rooms. By combining RFID technology with smart mirrors, customers are able to see a 360-degree view of the items they are considering purchasing, as well as change the colour of the clothing without even entering a fitting room.

Smart payments
At the centre of all major developments in retail is the concept of making shopping more enjoyable, especially for brick and mortar stores. Retailers are looking to create an in-store environment that will encourage shoppers to choose their store over a competitor or an online shop. It’s not just about digital advertising and offers, it’s about enabling customers to interact and engage with the brands they love.

As technology has advanced, the first checkout-less shops have popped up around the world. Consumers can simply scan their phones upon entering a store, pick the items they need, and then automatically pay for them without the need to stop at a checkout. Through a fusion of cameras, sensors and RFID, retailers are able to accurately and automatically receive payments as consumers exit the store. These IoT enabled payment systems aim to create a more seamless and convenient shopping experience, which would ultimately lead to fewer abandoned purchases and increased customer loyalty. Though checkout-less shops are still in their infancy, it’s likely that once the kinks are ironed out, more retailers will begin to experiment with the technology.

Mapping shoppers’ baskets, movements and habits
Market basket analysis (MBA) is a data analysis technique used to predict future purchases, based on previous checkouts and items in the trolley. Utilising cloud-connected sensors, retailers can use MBA to identify particular groups of products that are frequently purchased together. This data allows them to strategically position certain products and promotions to increase the rate of sale.

There’s also valuable insights gained into how shoppers move around the store, locating points of high footfall, and helping to show how and where a customer finds and chooses a product. This enhanced level of digital intelligence allows retailers to make better informed decisions about when to replenish stock, clean the store, change promotions and how to improve the shop layout – meaning shoppers are more likely to spend longer in-store and plan a return visit if the environment and experience is appealing to them.

What next for retailers?
IoT solutions offer valuable and actionable insights for retailers, who are increasingly able to personalise the shopping experience to tempt shoppers to shop in-store, rather than online. With the introduction of smart phone technology, cloud-computing and enhanced connectivity, today’s shoppers expect more than previous generations. With so much choice available in-store and online, consumers have become less loyal to brands. Quite simply, if consumers can’t find what they’re looking for, or experience an element of inconvenience, they will shop elsewhere.

For retailers, the rise of IoT brings exciting new opportunities to personalise, simplify and improve their customer’s in-store shopping experiences, creating environments and experiences that can’t be matched online. One thing’s for certain, IoT is already disrupting the retail industry and it’s only going to continue.

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