How the Internet of Things (IoT) Affects Retailers
You’ve heard the term, “The Internet of Things,” or “IoT” floating around recently, but what is it? And more importantly, how does it affect you as a retailer? Simply, IoT is a term used to describe smart, connected products, which include not only physical products, but also software and the communication layer that pulls it all together. It is predicted that there will be more than 30 billion smart and connected devices in use by the year 2020.
So, where are retailers in this mix? The good news is, they’re already using IoT in some ways; other technologies and approaches aren’t quite ready for prime time, but when they are, they are going to change the way retail is done.
RFID (Radio Frequency Identification) is the most well-known application for retailers, giving better end-to-end control over in-store inventory and integration with the POS for automatic identification of products at the time of purchase. Customers also have the option of charging items using a mobile wallet (another connected device) eliminating the need to visit the POS terminal. However, the RFID remains costly, so it is still not used by many retailers.
Aside from the actual logistical benefits, IoT has a significant impact on marketing strategy. For example, digital signage systems and shelf labels in stores can connect seamlessly with the POS software, reducing the cost (and, by the way, environmental impact) of traditional, paper-based labels. With this freedom, changing prices and promotions frequently is much more convenient and can be connected change automatically in response to conditions like weather or pre-set conditions like area or neighborhood events. The key is the flexibility to respond to and even stay on top of trends.
IoT is already creating a seamless customer experience in many creative ways, from food & beverage to retail. Smartphones can tell you the exact location of every bus on its route. Your favorite pizza place can tell you precisely when your pizza goes into the oven so you know exactly when to pick it up so it’s still nice and hot. Talking refrigerators are part of the selling process. The possibilities are nearly endless.
The Internet of Things is here. More and more devices are being connected, enabling automated processes and customized offerings. Communication is becoming more standardized, and that’s good news for retailers, because implementation will become less complex, and more devices will be built for these connections.
Most importantly, however, is that customers are coming to expect a seamless experience and getting information wherever they are. You need to ask yourself this: What will make the customer experience in your market more seamless, and how can you use IoT to help get you there? They have access to the technology and are already using it. Now it’s your turn.
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