How IoT is Revolutionizing the Retail Industry
Being a forward-thinking retailer requires actively identifying shifts in consumer behavior. Perhaps one of the most notable changes in recent years has been the rise in cashless consumers. According to a Pew Research Center survey, roughly four in 10 Americans (41 percent) say none of their purchases in a typical week are paid for using cash, up from 29 percent in 2018 and 24 percent in 2015.
At the same time, the marker of an innovative retailer is the use of emerging technologies to address evolving preferences, such as the drift toward cashless. In particular, today’s digital-savvy retailers utilize Internet of Things (IoT) solutions to boost customer satisfaction, increase operational efficiency, and innovate with actionable insights.
Automated POS Systems and Real-Time Insights
IoT retail solutions enable transactions between mobile devices and connected point-of-sale (POS) systems. Whether shoppers use Apple Pay, Google Pay or in-app purchases like facial recognition payments, IoT-powered terminals use wireless electronic processing to streamline transactions through cashless and automated payments. As a result, these IoT-connected POS systems reduce long wait times and even eliminate the need for credit cards.
In addition to infusing convenience and speed into the shopping experience, IoT devices help retailers deliver personalized customer interactions. By gathering valuable insights into shopping trends and asset usage from connected terminals and kiosks, retailers can make data-driven decisions that improve service.
IoT Supports Supply Chain, Logistics and Inventory Management
Beyond empowering connected POS systems, retailers can also use IoT devices to support supply chain, logistics and inventory management. For example, IoT-driven inventory management systems allow retailers to ensure supplies align with demand, preventing shortages or stockouts, overstocks and food spoilage. Likewise, retailers can leverage IoT technology to remotely track distribution and assets, safeguarding asset functionality, maximizing profitability and promoting faster decision making based on real-time insights. Plus, IoT solutions enable retailers to locate and identify lost or stolen assets or equipment.
Smart Vending Machines
Another exciting use case of IoT technology is smart vending machines, which are already prevalent in European and Asian airports, train stations and cities. Specifically, IoT edge devices, such as touchpads, touchscreens and touchless displays, enable dynamic and interactive purchasing without human staffing. These machines also use IoT sensors to monitor item quality, inventory levels and mechanical performance in real time, automatically notifying retailers of any issues.
Furthermore, smart vending machines can apply artificial intelligence and analytics to device data to help deliver tailored customer experiences. Digital signage on these machines can also show personalized recommendations and messages like item availability or discounts. Soon, these IoT-powered machines may use facial recognition software to provide even more individualized customer interactions.
IoT Solutions Need Multiple Connectivity Types
Of course, ensuring the always-on status for IoT retail solutions requires access to multiple forms of connectivity. For example, POS terminals and IoT video security cameras use wide-area cellular (to send operational and transactional data to the cloud) and local connectivity technology like Wi-Fi and Bluetooth. In remote areas lacking access to local infrastructure, IoT retail solutions, like smart vending machines, will need to use cellular connectivity rather than Wi-Fi. However, when a smart vending machine is inside a mall or area that doesn’t have a direct path to cellular infrastructure, Wi-Fi and Bluetooth can fill the connectivity gap.
IoT Solutions Are Here to Stay
Recall that more Americans are going cashless; conversely, fewer Americans (only 14 percent) use cash exclusively in a regular week. Simultaneously, a recent IoT report reveals that the number of global IoT connections continues to grow, surpassing the 14.3 billion active endpoints of 2022. As consumer preferences and technology continue to develop and influence each other, retailers must augment their services and operations with IoT devices to retain customers and remain competitive.
Fabrizio Mulas is the smart module product manager for Telit Cinterion, a global enabler of the intelligent edge providing complete solutions that reduce time to market and costs.
Fabrizio Mulas is the smart module product manager for Telit Cinterion. In his role, Fabrizio leads and manages the smart module product line development and supports the software strategy in other areas relating to value-add software and developer experience.
Before Telit Cinterion, Mr. Mulas was the CEO and co-founder of U4FIT, a personal training platform and app. Fabrizio oversaw various R&D and marketing functions and managed partners and investors. He was also a computer science postdoctoral fellow and contract professor at the University of Cagliari. He taught computer architecture, operating systems and Android™ programming.
Fabrizio has a master’s degree in electronic engineering and a computer science Ph.D. from the University of Cagliari.