The Contribution of IoT in the Retail Industry
The retail industry has been riding a wave recently. Amazon alone has around 200 million monthly visitors bringing in over USD 350 million in revenue. The potential of retail in the digital age is staggering and on the other hand, the industry is aware of its own issues and drawbacks. Unawareness of the audience, delivery issues, and lack of trust in online purchases are all factors that hold sellers back in an ecosystem they could otherwise be thriving in. However, in the COVID-19 scenario, this situation has improved. Thanks to the internet of things (IoT).
Today’s technology can break the wall between brand, product, and customer. The COVID-19 pandemic has pushed brands to turn to IoT in retail trends. According to reports, the global IoT in retail market size is estimated to reach USD 94.44 billion by 2025 at a 21.5% CAGR. McKinsey predicts that the potential economic impact of IoT in retail environments will range from USD410 billion to USD1.2 trillion per year by 2025.
IoT can minimize inventory error, optimize supply chain management, and reduce labour costs. Ultimately, IoT can help traditional brick-and-mortar shop compete with today’s online-first shopping world by exponentially enhancing customer experience and decreasing unnecessary expenses.
There are numerous benefits of IoT in retail, and here are some ways of IoT will shape the retail industry in 2021.
With IoT, retailers can set up a system to read tags on each item when a customer leaves the store. A checkout system would tally the items up and automatically deduce that cost from the customers’ mobile payment app. Creation of an automated checkout system using IoT devices would make customers happier and more willing to enter a store, especially if they are on a time crunch.
With IoT, retailers can set up sensors around the store that send loyalty discounts to particular customers when they stand near products with their smartphones if those customers sign up for a loyalty program in advance.
Additionally, IoT can be used to track items a customer has been looking online, and send that customer a personalised discount when the customer purchases in-store. Imagine if your customer perused your purses online, and then, in-store received a discount on her favourite purse? Rather than offering general discounts on a wide variety of products, a retailer can tailor each discount using IoT to increase conversion rates.
Ultimately, finding ways to integrate IoT devices into an everyday business requires creativity and foresight, but the benefits of IoT in retail can help a business discover innovative solutions to attract more valuable and loyal long-term customers.
Supply Chain Optimisation
GPS and RFID technology will allow brands to track each item through the entire delivery process. Retailers have to have a tight grip on their vendors as they will be able to monitor the delivery conditions and location and predict a precise delivery time.
The range of IoT applications in supply chain management is impressive. For example, retailers can test different vendors, vehicles, and delivery routes; collect the data on the process; and find the cheapest framework that also transports the product with no damage.
In-store Layout Optimisation
By employing aisle-analytics software with infrared sensors, retailers can use IoT technology to improve the retail layout. Most customers spend a massive amount of time checking out TV’s that are placed in the back of the store, behind rarely-touched DVD players. This information may arm retailers with potential customer behaviour knowledge, so they can place items they care about the most like TV’s, in front of stores.
Decrease Manual Workforce
One of the most effective ways of reducing the amount of workforce involved in-store management is automating tasks to robots that can help customers find specific products and provide information on promotions and inventory. Some robots roam the store and take note of misplaced items, or products running out of stock. By taking over simple inventory tasks, robots reduce human employees to focus on providing top-notch customer assistance.