In the past decade, there has seemingly existed much ado about something termed as the ‘Internet of Things’ (IoT). Industry experts, technologists and researchers have since then devoted resources — monetary and human — to come to terms with this new reality. The retail industry among many others has undoubtedly been the earliest to adopt the IoT and has imbibed its own life and breath. In this article I like to term that as ‘Retail of Things.’
The unanimous view in the retail industry is that the future of retail cannot be envisaged without IoT. According to a study by Retail Systems Research (RSR), 72% of retailers surveyed stated that they have invested in IoT related projects already. We believe that the Retail of Things journey requires companies to adopt a multifold approach that includes not just reengineering the technology strategy, but also conceptualizing strategic approaches in the customer experience and new revenue spheres.
Extracting RoT From IoT: The Growing Trend
Agile and Automated Supply Chain: With the introduction of Radio Frequency Identification Devices (RFID) and sensors, companies are able to track their products at every stage. This has helped immensely in accurate inventory management and reduction in product loss. According to the RFID Lab at Auburn University, the use of item-level RFID raises the accuracy of inventory management from 63% to 95% to 99%. The opportunity to track real-time inventory movement also enables firms to allocate their resources appropriately on logistics, raw material acquisition, etc., thereby managing costs effectively.
Convergence of physical and digital store: The integration of physical and online store is also an important objective for retailers, with omnichannel service becoming a prerequisite rather than a feature. This is also being implemented via the RFID-enabled products and electronic product codes that track the location of the product in the chain. Amazon’s Dash button is a WiFi enabled device that takes care of replenishing out-of-stock products such as detergent by automatically placing an order on behalf of the consumer.
Automating Manual Processes: As per a Cisco report, nearly 48% of processes in the retail world can be automated. Product information through barcode scanning, app integration, mobile payments, automated checkouts and beacon technology are some of the various introductions in this space. The number of stores implementing these features will only increase in the future.
Data and Analytics Infrastructure: Apart from IoT technology, retailers and companies also are investing in data visualization and analytics infrastructure to make sense of the data tidbits being relayed by these devices.
Fickle Consumers, Intense Competition, Changing Trends: RoT Impacts Everywhere
It goes without saying that the customer experience strategy is bound to be enhanced with advancement in RoT. Companies consciously invent and implement technologies to enhance the customer experience.
Rebecca Minkoff stores boast of smart mirrors and RFID tags that help a customer to try on clothing virtually and also offer suggestions of various looks. This offers customers a more personalized experience.
With the use of beacon technology, stores like Target alert customers of personalized offers and in-store discounts. Customers can also access product information with the help of the Target app and Bluetooth.
Not just stores, even products have been embedded with IoT features. Ralph Lauren recently launched a T-shirt range that monitors vital stats, heart rate and calories. Customers can sync this data with their phone health app.
Connected homes have also become a reality thanks to digital assistants like Amazon Echo and Samsung Smarter Things that enables the customer to control lighting, burglar systems and thermostats. Amazon’s Echo and Google Home also serve as search devices and can help humans with anything from ordering pizza to getting a rental movie.
Rising To The Challenge
While industries have dived straight into the IoT ocean, it is not without its challenges. The biggest challenge companies need to tackle is the issue of data. While IoT brilliantly captures and transmits data, companies will still need to crunch this data in order to effectively utilize it. This requires investment in data analytics and visualization applications.
Additionally, there is also a need for robust networks and servers that can handle the data traffic in real time. While these are tangible issues, the most crucial challenge will be for organizations to eliminate siloed working and engage departments to work in collaboration to optimize results.
Retail channels follow a classic “S” curve. RoT is a transformational concept for retail that will change the way consumers and companies interact and engage. It is as important for customers to adopt and accept the various features available as it is for companies to ensure that these are utilized effectively. With data exchanging hands swiftly, it is also up to corporations to minimize the use of customer’s personal data and ensure invasions of any kind are limited. The objective of RoT is to make shopping experiences simpler and better and with that in mind, the industry is headed in the right direction.
Dr. Sethuraman Janardhanan is the Practice Head & Account Leader — Big Data Analytics at Happiest Minds Technologies, managing strategic accounts in big data analytics space in North America. Janardhanan holds a Ph.D. in Systems from Indian Institute of Management, Kolkata focusing on Artificial Intelligence and Neural Networks. He is a regular speaker on Analytics and Strategy.