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.