It’s been well-documented that new technologies — in particular, artificial intelligence (AI) and Internet of Things (IoT) — will change our digital lives, but their uses extend even further than we may realize. By 2023, the worldwide number of IoT-connected devices is to increase to 43 billion, three times more than 2018.
With such significant growth in IoT, AI will play a critical role for several use cases in retail and other verticals. This is done when we use AI to turn signals from connected devices into business and operational insights, where the internet then lives all around us and not just within a screen. The intelligence layer built alongside IoT will be what maximizes the value that can be extrapolated from IoT devices. We’ve seen that are now using AI and connected sensors to gather consumer insights and data that were never before possible, and this is just the tip of the iceberg.
Digitizing the Physical World
The impact of implementing IoT and AI in the right way will enable us to see the physical world in the same way that we see the digital world. We’ll be able to introduce some of the same paradigms that have been well established by online retailers to give us better insights in-store. This new digital-to-physical (or as I like to say, “digical”) paradigm will reach beyond retail into virtually any public space, including commercial buildings, cities, stadiums and campuses.
Brick-and-mortar stores have historically been at a disadvantage to their digital counterparts because they lack the analytics that online retailers can obtain so easily. When implementing IoT sensors, brick-and-mortar retailers will have a better view of customer behaviors. For example, what aisles are getting the most traffic? What’s the customer journey like? Where did they stop? What’s the ratio of how many people stopped to look vs. how many actually purchased?
Now imagine an operational manager, responsible for thousands of stores, being able to gather a complete snapshot from analytics based upon the company's entire physical footprint. By analyzing data and trends related to logistics and customer behaviors, unique insights will bubble. These insights can be fed back into the business in areas like marketing and operations for better overall efficiency.
The Next Step in the IoT Revolution
Even with improved intelligence, the evolution of retail in this matter is nothing without trillions of connected devices and seamless connectivity. The next step in the physical-to-digital retail revolution rests on the shoulders of communications service providers (CSPs). Beyond implementing the proper technologies in the cloud, CSPs will play a significant role in the physical deployment of sensors and taking these solutions to market. Furthermore, a stable network pipe for IoT will also be critical to ensure IoT is prioritized separate from traditional network traffic.
As the technology continues to advance, expect to see more retailers explore the value of IoT in 2020. Those that get a jump will lead the competitive pack.
Gil Rosen is the president and general manager of amdocs:next, a leading provider of software and services to communications and media companies.