Tech Guest Viewpoint: 5 Ways the IoT Will Revolutionize Retail
By Brendan O’Brien, Aria Systems
You’ve undoubtedly heard about the Internet of Things (IoT) and you might think that it’s all about wearables and energy savings. You might conclude that it doesn’t have much to do with your retail business.
Well think again.
The business impact on the retail sector from the IoT – the monitoring, measuring and reporting of all kinds of interconnected devices – is going to be huge. Bigger than anything we’ve seen before in technology.
Here are five ways that the IoT will change the world of retail:
1. Improves Customer Insights
The IoT extends all the way to the front counter, and captures data about customer habits. It will allow store operators to transform the continuous flow of data into insights – and put their attention where needed to increase sales and boost profits. The IoT enables a better match between customer and store products, for instance. Retailers will be able to determine customer likes and dislikes based on continuous and extensive mining of the data generated by IoT networks.
2. Transforms Store Marketing
The IoT will allow retailers of all sizes to transform their marketing efforts and develop highly personalized customer service. For the first time, retailers will be able to actually market to each and every customer one-on-one based on the data and insights supplied by the retailers’ IoT networks.
For example, the IoT will enable retailers to revolutionize digital signage inside, as well as outside physical stores. Stores will be able to serve up smart promotions, that is, custom-crafted for specific groups of customers, or even individual customers.
3. Improves Supply Chain Management
The IoT will streamline the flow of goods in the supply chain from the factory to the warehouse to the stockroom to the shelf and then to checkout, allowing retailers to better track inventory, as well as sales, and therefore better serve their customers.
For example, Walmart was the first large retailer to deploy an inventory management system that uses the IoT to ensure the continuous restocking of thousands of store items. With inventory monitoring, each of the tens of thousands of products that Wal-Mart carries can be tracked at every step along the manufacturing, warehousing and store stocking process.
4. Enables Instant Dashboard Updates
With the arrival of intelligent IoT networks, it will be easy to get an overview of business operations in real time, sale by sale. IoT-driven dashboards will render complete overviews of retail businesses in real time, and enable them to better anticipate sales based on what’s selling and what’s not, and direct store operators to adjust inventory accordingly. Store operators can compare sales of various products between locations, to name just one example, and analyze what’s working at any particular store or set of stores, and then scale that up to work at the other stores in the overall business.
5. Improves Recurring Revenue Sales
To be sure, the IoT is as much about the service that the retailer provides as the product that he or she sells. The deployment of these IoT-based services fits perfectly within the concept of Recurring Revenue, which in itself is a great change from the original sales patterns of e-commerce. It’s no longer one sale and you’re done, waiting for the customer to return to make another purchase. Retailer stores can predict the revenue stream from each customer for long periods of time, while making lifetime customers.
So what does it all mean? The IoT changes the retailing paradigm, and leaves behind the non-competitive.
The IoT will disrupt the retailing sector from the smallest independent boutiques to the largest store operators.To take advantage of the IoT requires agility and flexibility. Agility will be required to keep pace with the competition in the new age of the IoT, along with flexibility in pricing and packaging. As part of that, your billing systems will need to be integrated, agile and sophisticated enough to handle on-the-fly changes to product packages, pricing and promotions.
It’s time to start planning your business strategy around the new technologies afforded by the IoT. Your competitors are more than likely doing so.
Brendan O’Brien is chief evangelist and co-founder at Aria Systems.
Ross rolling toward 2,000
Ross Stores is less than two months into its new fiscal year and already the company is halfway home on its 2015 new store growth plan and asserting its long term potential.
Ross confirmed that since the beginning of its fiscal year on Feb. 1, it opened 32 Ross Dress for Less stores and five dd’s Discounts stores in 15 states.
The company’s full year plan disclosed when fourth quarter results were released on Feb. 26, calls for 70 Ross stores and 20 dd’s Discounts stores.
"These openings reflect our ongoing plans to further increase our presence in existing markets while also expanding in the newer markets which we entered back in 2011," said Ross Stores President and Chief Development Officer Jim Fassio. "The 37 stores we recently opened include locations in our largest states of California, Texas and Florida, where we are still able to take advantage of attractive sites to further strengthen our market share. Our Spring opening group also includes additional stores in our newer markets of Illinois, Kentucky and Indiana. Looking ahead, we continue to identify future growth opportunities across all of our markets, giving us confidence that Ross Dress for Less can ultimately grow to 2,000 locations and dd's Discounts can eventually become a chain of 500 stores."
The company currently operates 1,242 Ross stores in 33 states and 157 dd’s Discounts stores.
Dollar General expands footprint again
Who needs Family Dollar? After a failed bid to acquire its smaller rival, Dollar General is on the move and extending its presence to three new states.
Dollar General already operates more than 11,700 stores, but entry into Oregon, Maine and Rhode Island gives it more greenfield expansion opportunities to pursue while Dollar Tree is busy integrating the recently acquired Family Dollar chain.Family Dollar shareholders approved an $8.5 billion deal early this year to sell the company to Dollar Tree, effectively shaking off a hostile $9.1 billion offer from rival Dollar General.
“It’s very exciting to move into these new states and grow the Dollar General brand. We continue to be focused on sustainable growth and doing what we do best, which is serving our customers with everyday low prices, convenience and exceptional value,” said Rick Dreiling, Dollar General’s chairman and CEO. “Increasing Dollar General’s footprint in these states gives us a presence and opens further growth opportunities in both the Northeast and Pacific Northwest, where we see tremendous growth potential for Dollar General.”
To commemorate the store openings, celebrations were held at each of the following new stores in which customers received complimentary gift cards, tote bags, prizes, special offers and other giveaways:
- 1079 Sabattus St. in Lewiston, Maine
- 33 Elm St. in North Berwick, Maine
- 94 S.E. Main St. in Winston, Ore.
- 1300 Easy St. in Brookings, Ore.
- 567 Main Rd. in Tiverton, R.I.
- 1548 Broad St. in Cranston, R.I.
Stores in Maine and Rhode Island will be served by the company’s Bethel, Pa., distribution center that celebrated its grand opening in May 2014. Oregon stores plan to be served by the company’s Lebec, Calif., distribution center that opened in April 2012.
The new store openings expand the retailer’s presence to 43 states.