Everyday, we as consumers are accepting and integrating more and more “things” into our daily lives without even a thought. Things that are connecting us to other things and people. There was a time when people first started using a device, a desktop or laptop, to connect to the internet. Now we have multiple devices that are not only connected to the internet but inextricably connected to each other in one way or another. In almost any home you can not only find these home computers, but now we have smart phones and watches, wireless earbuds, smart TVs, wireless printers, smart refrigerators and ovens and the all too popular Alexa and Echo. We have effectively created an inter-network of these “things” that are all sharing information with each other. While the IoT, or Internet of Things, is easy to explain in a general sort of way, there really is no one single way to describe it since it is something different depending on the industry in which it is being employed.
What is the IoT and how is it used in retail?
The IoT can be described as “the network of physical objects or ‘things’ embedded with electronics, software, sensors and network connectivity, which enables these objects to collect and exchange data.”
Retail investment in IoT technology is targeted to reach $2.5 billion by 2020 according to report by Juniper Research, as IoT becomes an integral part of retail operations. We have refrigerators that can tell when their filter needs replacing and then go about ordering a new one for us. This involves a network of sensors, internet connectivity, access to a specific store with the parts, and payments channels and security. Just one example.
So if your in the business of home appliances it easy to see how IoT can benefit your retail sales, but what about the more everyday retail merchant? How can they capitalize on the IoT for their business?
The IoT can help retail businesses with everything from more accurate and real time inventory management to increased sales to enhanced customer experience and loyalty.
When you think about how the hardware like RFID tags, the store beacons and smart shelves link with consumer’s connected devices like smartphones, watches, mobile wallets and apps, and send data to software analytics it is easy to start to see a world where we can utilize in-depth insights to enhance the customer experience as well as increase sales.
Nowadays, we are increasingly using data to engage with shoppers digitally in real time.
The power of this inter-connectivity can help businesses to increase Brand loyalty and customer satisfaction. Mobile POS, such as wireless tablets, are already bringing the POS system and all of its information straight to the customer. Salesmen are able to check inventory on the spot and assist the customer in finding the right color, size or any other variable the customer needs and then even complete the purchase right there creating a more personalized customer experience than when they stand in line and check out.
RFID, or Radio-Frequency Identification, is inventory management on steroids. RFID tags have been shown to create inventory accuracy to 99%, as well as reducing shrinkage by a whopping 70%! RFID tags allow businesses to track objects in more ways than a barcode. A barcode needs to be scanned at the register, and that information is recorded in the POS system as a sale. RFID tags are connected already giving the business data about what is happening with that product, including just moving about the store. RFID tags can allow a customer to use a smartphone to pay for a product before leaving the store, update inventory immediately that the item is one down on the shelf and in inventory as a whole, as well as send data to the owner as to how the customer interacts with the object. For instance, how long did the customer spend with the object before purchase, did they try it on(movement to the dressing room), which colors are the most popular etc.
Real time reporting of all of this information helps a business to make better decisions. Being able to track inventory status means you will be more on top of replenishment, have more consistency in store and have a better handle on customer demand.
Because items are logged as sold as soon as the transaction is complete the real time data can be programmed to send information to an employee that the shelf needs to be restocked and whether that would trigger an order for a shipment from the warehouse.
Smart shelves are another thing larger retailers, such as Kohls, use to improve inventory management by detecting the level of items on the shelf and communicating that to inventory management software through RFID. Electronic shelf edge labels allow the price of an item to be change in real time- no more paying a clerk to go and put a new price sticker on each and every item on the rack. Interactive screens in fitting rooms that interact with the consumer by detecting what they are trying on, showing them the item in other colors or even suggesting items that pair well with it all help to make the customer feel like they are having a more personal experience (without any persons…). In the future we will see a world of more personalized shopping experiences that have been optimized way beyond any traditional view we are used to today.
Barcodes and smart tags can also help deepen customer relationships. With so many free barcode and QR code scanning apps available customers are able to easily scan the tag to gather a multitude of information on a product. They can read reviews, look for references on social media to help them gain confidence in their purchase. Store apps can allow customers who are logged in while shopping to check for lower prices or special coupons or loyalty rewards just for them.
Generally a store owner might take a more passive approach of monitoring customer behavior. That is no longer the answer. Merchants have tools that can truly gain insight into their customers wants and needs. Speaking to this is the retail store app customers can download, what better way to interact with your customer on a more personal level. Connectivity allows the app to recognize when a customer enters the store, can pop up offers or coupons that are specific to that customer or even specific to the item they are looking at.
What is the future of IoT in the retail space?
Implementing the IoT and all that goes with it is not without its challenges and investment. While the foundation of the IoT lies with RFID enabling this uber-connected environment it can’t be done without a multitude of supporting devices.
Smart shelves, doors, sensors, as well as device management, security systems, energy optimization, payments avenues, new Wi-Fi and Bluetooth technologies and more all combine to create this interconnected environment.
The IoT is all about data and what you can do with it. This data will empower business owners with a better understanding of their customers wants and shopping trends.
We expect the retail industry to be a main driver of the growth of IoT. With the power to increase speed in supply chain operations, automate inventory management and increase sales through enhanced customer experience retail merchants have no choice but to capitalize on these technological advancements.
And of course this doesn’t even take into account how all of the data these devices are collectively gaining can be also put to use outside the actual retail establishment, but that’s for another article.
The IoT and the payments industry are inextricably intertwined. At the end of the line the main goal is a seamless purchase. Bankcard Brokers leads the way in adopting new technologies and is dedicated to staying on the forefront of new payments technologies and their integration for the benefit of our clients. Because our representatives are ETA-Certified Payment Professionals you can trust that they not only have the education, but the dedication to a professional “Code of Ethics” that allows them to offer you only the best solutions for your business. Give us a call today and experience the “Bankcard Brokers Difference”!