IoT and digitalization continue to impact nearly every industry and retail is no different. While retailers have been working with RFID for quite a long time, new and improved IoT technologies are giving retailers the opportunity to improve operations and enhance customer experience, whether that’s in your brick-and-mortar operation or your e-commerce side of things. From reducing inventory error and optimizing supply chains to decreasing labor costs and reducing theft, IoT can benefit both customer and business owner in myriad ways.
Here are seven ways IoT is enabling and enhancing retail:
In-store data collection
Smart sensors allow retailers to track foot traffic and shopping behavior, which offers a number of benefits. First, understanding traffic flows allows businesses to evolve store layouts and stock placement to data-driven merchandising, as well as pairing products and placing them where they can easily be found by the customer. Brands also have the opportunity to identify traffic hotspots, allowing them to strategically place promotional material or advertising in spaces where shoppers frequent, creating more awareness with less effort.
Let’s face it: no one likes to stand in long lines waiting to pay. Long lines not only lead to lost customers in the moment, they can also deter customers from returning to your store. That said, adding more staff to handle the problem isn’t always the optimal solution. While self-checkout has helped ease the problem to an extent, IoT-enabled checkout systems are the real game-changer. An automated checkout system reads tags on each item a customer has put in their basket as they leave the store. So, instead of checking out at the counter with an employee or going through a self-checkout line, the automated checkout system takes note of the items and deducts the cost from the customer’s mobile payment app. The result is quicker purchases, happier customers, and reduced costs for the retailer.
Inventory management is a time-consuming task, but a vital one in order to make sure that items are not out of stock, misplaced, or stolen. Smart shelves help you track inventory and get an alert whenever stock levels are funning low or when an item is misplaced/placed on a shelf incorrectly. IoT sensors allow you to gather information and data on each product, which not only helps you monitor stock levels, but also detect in-store theft.
Loyalty programs and discounts are an ideal way to show appreciation for returning customers while also ensuring their loyalty. IoT sensors placed around a store can distribute loyal discounts to loyalty program members via their smartphones when they stand near discounted products. Additionally, IoT can track items that a customer has been looking at online, sending them a personalized discount when they visit the store. So, instead of offering general discounts on numerous random products, each discount can be tailored to individual customers, maximizing conversion rates.
Optimized store layout
Planning store layout can be tricky, but through the use of IoT data and analytics, a store’s layout can be optimized not just for the retailer, but for the customers too. This not only enhances customer experience, it also increases profitability. Deploying sensors across aisles can help retailers place products in relation to customer behavior, including placing the least in demand products front and center and the most popular ones further to the back. The data gathered also provides insights into customer behavior and shopping preferences.
Food safety monitoring
Food and beverage retailers know that efficient operations are crucial when it comes to offering their customers products that are fit for consumption. Establishing and maintaining an efficient operation, though, can be challenging and one impacted by any number of factors. Anything from an electrical outage to staff error can lead to stock contamination, spoilage, and loss – costing you money. IoT sensors can prevent loss and mitigate human error by monitoring perishable goods in real team. They can automatically log temperatures in prep areas, fridges, freezers, and other equipment, setting thresholds for each sensor and receiving an alert any time a threshold is breached. This helps protect inventory by ensuring food storage areas remain temperature compliant.
Supply chain optimization
Managing customer expectations is crucial in retail and IoT allows retailers to do this through up-to-date insights into inventory availability. Starting in the warehouse, IoT-enabled sensors on product shelves can monitor weight fluctuations that signal when products are running low. This ability to recognize the popularity of particular goods – such as the ones that are flying off the shelves – allows retailers to proactively restock in good time. This is increasingly important as more and more customers move to online shopping – physical inventory isn’t visible, so the ability to know when to restock before someone purchases an item that isn’t available lowers the risk of transactional error. Additionally, warehouses are big and finding a particular product can be like finding a needle in a haystack – deploying sensors in your warehouse leads to greater overall visibility and streamlined processes.
If you would like to learn more about how IoT can enable your business, please get in touch.