How IoT Can Transform Retail
Imagine a customer walks into your store. From the moment she enters, she gets information about products based on her personal tastes and the deals going on that day. She even receives special offers specifically catered to her individual preferences…all sent directly to her phone.
The Internet of Things (IoT) technology makes this vision possible.
Adopting IoT tools for the retail environment allows customers to interact both directly and indirectly with everything in the store. This presents incredible business opportunities. It can be daunting trying to step into the IoT space, though, and that fact keeps many businesses from embracing a lucrative transformation.
Let’s examine three of the biggest opportunities IoT technology presents for the retail environment, and how to capitalize on them.
#1. Personalize the Customer Experience
Improving the customer experience and reducing friction are great ways to foster a more personal, direct connection to your brand among customers. IoT technologies making their way into the retail environment may be the greatest advance on that front since the birth of eCommerce.
IoT devices present new opportunities to provide a personalized and unique experience for customers. For example, you can deploy sensors throughout your store to send discounts and other offers to customers’ phones. A similar tactic involves using Bluetooth-enabled beacons to send alerts and other promotions to nearby users. It’s a simple yet highly-effective idea; in fact, more than 6 in 10 consumers say they’d be more likely to visit a store as a result of a beacon campaign.
Delivering a personalized, unique experience with IoT devices presents more than a simple opportunity to boost sales. You also establish a closer relationship with buyers and potential buyers, generating customer affinity and increasing brand equity.
Carefully tracking customer data, then combining that data with IoT capabilities, gives you the power to engage in very granular microtargeting. Over time, you come to learn your customers’ individual preferences. This, in turn, produces incredibly valuable data from a marketing perspective.
IoT tools make it possible to know your customer better than ever before. You get to know what your buyers like and what they don’t, and you can tailor your offerings accordingly.
#2. Optimize the Supply Chain
You might think of IoT technology as primarily a consumer-facing innovation. However, there are plenty of tools out there to help improve operations, increase efficiency and prevent loss, too.
It’s entirely realistic to track items using GPS and RFID technology at every phase of the supply chain. You can identify and track each individual item, monitoring by location for better and more accurate inventory management.
This can also give you incredibly useful insight into the conditions in which goods are stored and shipped. If you’re transporting perishable or heat-sensitive items, for instance, you can monitor temperature conditions using IoT tracking to ensure they’re not compromised during transit.
Plus, employing IoT technology in the supply chain helps generate more precise and actionable data. Armed with that insight, you can respond quickly and with targeted accuracy to issues in the supply chain, and you can always know where all your goods are in that process.
This could produce added benefits you hadn’t yet considered. For example, consider that most discerning consumers—especially those under 35—consider corporate responsibility important. You can appeal to these buyers with complete, verifiable oversight into the supply process, showcasing where products were sourced and whether the conditions were humane and sustainable.
#3. Make Voice-Enabled Commerce More Effective
Voice-enabled purchasing is an intriguing new concept made possible by devices like the Amazon Echo or Google Home. We’re still far from widespread adoption, though; barely 2 percent of consumers who own an Echo device used it to make a purchase in 2018. Of those who did, most did not plan to repeat their experience any time soon.
While voice-enabled purchasing has a long way to go, that’s not the main opportunity presented by these smart home devices. For now, Alexa and Google have much more utility as research tools than they do at checkout.
The same study cited above finds about one in five consumers use voice-enabled devices to research and learn about products. This can be a great way for you to capitalize on the interest in voice-enabled IoT devices. Remember, though: voice-enabled commerce is different from traditional browsing. It will take time to optimize listings for how consumers shop using voice technology.
Engage in A/B testing and determine whether shorter or more descriptive terms work better. Maybe you need to add an accent or specific word choice depending on your target audience, especially when selling internationally.
Fortunately, there are tools to help. For example, you can use Amazon’s Alexa Skill Kit. This provides you with APIs and tools you can use to produce voice-enabled product listings, optimizing your pages for voice-driven consumers in the research phase of the buying cycle. Other tools, like the UPS skill for Alexa, let buyers track shipments via voice command. These and other similar options help make your products more accessible to these consumers.
We’re Just Scratching the Surface
I expect these three areas are where we’ll see IoT technology transform retail first. However, there are plenty of other opportunities out there to provide better experiences, draw more complete data, and streamline administration through IoT.
Progress on that front is contingent, at least in part, on customer adoption. There are plenty of customers out there who still don’t trust IoT-enabled technology.
Once we manage to eliminate the stigma surrounding these amazing tools, though, I think we’ll see rapid change.