Ready or Not, Here Comes Retail IoT
The Internet of Things (IoT) is coming to retail, so get ready. Digital devices (i.e., Things) are poised to revolutionize everything from inventory management to hypertargeted marketing.
IoT-enabled smart shelving will lend a whole new meaning to the term “shelf life,” bringing retail shelves to life by allowing the dynamic changing of prices and the taking of inventory to trigger restocking when needed.
Smart signs can adapt their offerings to suit the customer’s mood or to compete with a store down the road. Location analytics tools can help retailers target customers for preferential treatment. Remote body scanners will even measure customers for suits from their own homes. And feedback from smart devices can help retailers predict and avoid product breakdowns.
This isn't science fiction. The key to leveraging IoT for retail sales is the ability to connect, sense, correlate and automate in order to add value by increasing intelligence and reducing manual effort.
One of the most powerful retail IoT ideas is electronic shelf labels. Shelf labels can change prices dynamically, but also read passing foot traffic to determine whether the product placement is attracting enough passers-by. If there isn't enough passing traffic or the prices are too high, the product could be repriced on the spot and/or promoted via Wi-Fi.
According to a survey by independent market research firm Vanson Bourne, 72 percent of respondents believe it's a significant advantage to be able to price products and services based upon dynamic factors such as changes in competitor prices or activities. The electronic shelf label is an obvious solution.
IoT is changing the retail clothing world with the introduction of sensor-enabled body scanners. Webcams on your laptop will help you order off-the-peg jeans that fit like a glove. Photo booth-style 3-D scanners in airports or train stations will measure you and order bespoke suits sharp enough to please James Bond.
To take this further into the realm of IoT, it can be a webcam that scans you and takes your measurements. Looking to the future, maybe we can all be measured by drones flying over us at the mall. That way we know exactly what size to look for when we go to any store that communicates with the drone.
In brick-and-mortar stores, retailers are trying to create a warm and welcoming atmosphere by using smart signs that can adapt their offerings to suit the customer’s mood.
Enriched with sensors, the smart sign leverages IoT to create bespoke content. Smart signs tailor their content based on real-time analysis of multiple video streams, which include face detection technology. They provide demographic information about viewers, such as age and gender. Facial detection reveals mood. Is your customer grumpy? Happy?
The demographic information is combined with other real-time data such as weather (is it cold outside?) as well as your internal inventory and campaign goals. Then the advertisements can be highly targeted to maximize customer response and generate loyalty.
Going a step further, the IoT is making it possible to spot and deal with unhappy customers as early as possible in order to make them feel special. For example, if an airline can identify a diamond-tier passenger who has been waiting to check in for 10 minutes, the manager can head off his unhappiness by offering a “fast track” check in.
Location analytics tools give you a better understanding of how your customers move through your stores. By analyzing customer paths through a retail store you can optimize your layout and product placements. Combining this capability with predictive models, you can proactively redeploy staff to address bottlenecks and avoid queues before they happen.
In the brave new world to attain loyalty, you must treat your customers like royalty. Using the IoT and location analytics in particular puts the power firmly in your hands.
Oliver Guy is the retail industry director at Software AG, a provider of enterprise management software.
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Oliver Guy is the global industry director, retail at Software AG, specializing in retail digital transformation and omnichannel technology strategy.
Oliver advises retailers across the globe on their technology strategy and decisions. With more than 20 years focused in technology, Oliver has worked with major names in global retail helping them improve their business through the use of innovative technology. Prior to joining Software AG, Oliver was part of the European Management team at Oracle Retail, his team being responsible for Retail focused Solution Consulting across Europe. Oliver started his career in technology implementing Supply Chain Planning and Optimisation solutions for customers across multiple industries in both Europe and Asia Pacific with Manugistics (JDA).