How the Internet of Things is Impacting the Shopping Experience

By Maricel Tabalba

The retail industry is experiencing the effects from the use of the Internet of Things (IoT) and its connected devices. According to the information services firm IHS Markit, there will be more than 20 billion internet-connected devices by the end of 2017, and this number is expected to grow to more than 30 billion in 2020. Retailers are taking advantage of this data collection and using it to increase sales and better the customer service experience.

Due to the proliferation of smart technology and wide range of users who own at least one smart gadget, customer data is easily accessible for retailers. The IoT is effectively closing the gap between the traditional retail experience, in which basically only purchases were tracked, and the online environment, wherein mountains of information are gathered. One such example is RetailNext, which has developed a system that records and consolidates information from video cameras, point-of-sale equipment, wireless devices and several other sources so that retailers can get a big-picture idea of what's working and what needs to be changed.

Gathering consumer data is only one step of the process. Analyzing and using the collected data for business operations is possibly the most vital step for growth. Perhaps the most important strategy for retail professionals to take is to focus on the customer. How can IoT data help you better interact with consumers and ensure that you meet your sales goals? With weeks and months of past data, you may be able to predict your sales and prepare accordingly. By analyzing how your customers shop, what they look for and how they look for it, you can adjust your marketing and sales efforts to better suit their needs and increase sales revenue.

In order to improve customers’ experiences with the IoT, retailers need to focus on communication and personalized messages. By using the data gathered from the IoT and its connected devices, professionals can personalize their marketing efforts. What has this person searched for recently? What have they bought? What was placed into their online shopping cart but was not purchased? All of this and more can be used for more a customized and intimate shopping experience.

Customers have a big role to play in the way that they shop as well. The majority of Americans often prefer to shop online for its convenience, so it’s no surprise that there are also an onslaught of IoT devices that cater to the average consumer. One such system comes in the form of digital assistants. Consumers who have digital assistants, such as Google Home or Amazon Echo, have the luxury of more convenient and easy shopping. With voice control, users can seamlessly place online orders while they’re going about and doing their daily tasks by just asking their digital assistants to make the order. Shopping has possibly never been more effortless, and retailers are recognizing this.

However, perhaps one of the biggest problems confronting the IoT and its tie with retail and shopping is a lack of compatibility between various pieces of hardware and software. This is a result of the fact that it's a wide-open field, and so there aren't really very many industry standards that have been established yet. One other issue, and quite possibly the most concerning for both retailers and consumers alike, is security. With financial information in the cloud and gathered from various IoT devices, many are wary of identity theft and credit card fraud.

As long as our technology continues to improve and customer information is protected, physical cash will become obsolete in the coming years. The IoT will inevitably continue to revolutionize the retail and shopping experience along with many more industries.

Maricel Tabalba is a freelance writer who is interested in writing about smart gadgets, emerging tech trends and environmentally friendly advice.