How can the internet of things (IoT) be used in the retail industry? Join us, as we take a look at IoT in the retail sector and how we predict retailers will use this technology in the year ahead. That’s why we’ve sorted out 10 ways to use IoT in the retail industry this year. In this way, you would be able to upgrade your own business.
In the modern age, we’re all more connected to each other than ever before. This saying doesn’t just apply to people, but to the devices, we use too.
The internet of things means we can make data and information more readily available, allowing us to make better decisions. For example, a fitness tracker can tell us how many more steps we need to beat our weekly average. Also, it can track, how many glasses of water we need to be optimally hydrated? And soon, what are the heart rate and oxygen level?
The internet of things allows industries to make better business decisions as well. For example, let’s consider the world of retail. IoT in the retail industry is used to help businesses understand customers better, as well as improve the user experience.
Table of contents
- What is the internet of things?
- IoT in the retail industry: how can it be used?
- 1. Managing stock
- 2. Monitoring prices on shelves
- 3. Offering customer assistance
- 4. Predicting equipment failure
- 5. Analysing customer behavior
- 6. Automating repetitive tasks
- 7. Implementing health and safety measures (for example, COVID-19)
- 8. Tracking staff whereabouts
- 9. Personalising the shopping experience
- 10. Buying products
- In conclusion: Smart retail and IoT are perfect partners
- Frequently Asked Questions (FAQ)
So, what is the internet of things, and how can IoT be applied to the retail industry? Let’s take a look. at our 10 ways to use IoT in the retail industry this year.
What is the internet of things?
The internet of things (IoT) is a network of physical devices that contain sensors. These sensors then exchange data with other devices over WiFi and mobile connections.
The internet of things may sound new and exciting, but the truth is, we’ve all been using IoT devices for a very long time. The fitness tracker on your wrist, the lightbulb you control with your phone, and the smart doorbell on the front of your house… it’s all IoT technology!
So, the IoT is powered by something called the edge cloud – a subset of cloud technology. The edge cloud processes data as close to your device as possible, making sure it reacts quickly and enabling you to make fast decisions.
IoT in the retail industry: how can it be used?
We’ve taken a look at what the internet of things is all about – but how can IoT be used in the retail industry?
Retailers need to handle substantial amounts of data – everything from stock inventory to customer payment details. The IoT lets stores manage and share this information between devices as securely as possible.
So, the internet of things goes hand in hand with artificial intelligence, helping retailers automate particular tasks and actions. This means customers can get their questions answered as quickly as possible, and retailers can become more efficient.
IoT can also help bridge the gap between eCommerce stores and their brick-and-mortar counterparts. By making the omnichannel experience as seamless as possible for customers, stores can provide the consistent level of interaction that 90% of shoppers expect.
Would you like to find out more about how the internet of things can be applied to the world of retail? If the answer is yes, let’s look at ten different ways IoT can be used in the retail sector in the year ahead.
1. Managing stock
We would like to start our “10 ways to use IoT in the retail industry this year” list by managing stock levels.
A store may have hundreds, perhaps thousands, of items available to buy, and it’s essential to ensure that stock levels remain constant. According to the Harvard Business Review, between 21% and 43% of customers will go to a competitor’s store if a retailer doesn’t have the item they want.
Inventory management in the past meant lots of spreadsheets and staff physically checking stock levels. This took a long time and wasn’t always accurate. With the internet of things, sensors can be used to identify if the stock gets to a certain level. Staff can then be alerted to order more products or alternatively, an IoT device can order the stock automatically.
2. Monitoring prices on shelves
Several decades ago, changing product prices was a frustrating task. Retail assistants would have to verify that the price of a product had changed, revise the labels on the shelves, and make sure the price was updated at the checkout too.
Utilizing the internet of things has made the process much easier. Smart shelf labels automatically update when the price of a product is amended on a central management platform, not only saving staff time but ensuring accuracy across all stores and product lines.
These smart shelf labels can also do more than just tell customers the price. Many of these labels have a QR code or NFC that shoppers can scan to find additional information such as ingredients, allergens, discount codes, or even an instructional video.
3. Offering customer assistance
If a customer has a question about a product, you want to ensure you give them the best answer possible. Sometimes this can be hard if you don’t have enough staff available or staff that aren’t knowledgeable in that particular area. So, this is where the internet of things can be of great benefit.
For example, take the virtual fitting room. The virtual changing room has grown in popularity over the past few years, with the market now worth nearly $3 billion. Retailers like Adidas and Macy’s are using this IoT and AI-assisted technology in-store to help customers try clothes and makeup on without having to go into a changing room. Not only does this help customers discover new products, but it can also reduce return rates by over a third.
4. Predicting equipment failure
It’s not just the stock that needs to be considered in a retail environment; it’s the equipment too. From the air conditioners that keep staff and customers cool on hot days to the refrigeration units that keep food fresh. We would say it’s essential to make sure equipment is well-maintained. So, if equipment gets damaged or breaks down, it could mean a loss of stock. What’s even worse, it can lead to unsafe products or unhappy customers.
IoT can be used to monitor these units. Sensors can be applied to each piece of equipment, constantly checking temperature, humidity, and power consumption. If issues are found, maintenance staff can check the equipment and repair it before any major damage is caused.
UK-based supermarket ASDA is using IoT to connect all its in-store systems, giving the retailer greater control of all the different elements within each building.
5. Analysing customer behavior
In the past, if you wanted to know about customers’ buying habits, there was no other way than to ask them. Now, IoT technology in retail means businesses can find out more about the people who come into their stores.
The internet of things can be used to see what routes a customer takes while they are shopping, as well as the products they buy. This information can then be fed into a central system, helping retailers enhance the customer experience and improve their marketing efforts.
6. Automating repetitive tasks
One of the newer ways that the internet of things is being used in retail is through robot technology. For example, US supermarket chains Target and Walmart use robot employees to identify low levels of stock, identify spills, and locate misplaced items.
By using technology to automate the most common and repetitive jobs, it frees up staff to focus on other tasks. For example, answering customer queries and thinking of ways to help grow the business.
7. Implementing health and safety measures (for example, COVID-19)
The COVID-19 pandemic of 2020 and 2021 meant that stores had to provide additional health and safety measures, ensuring both staff and customers remained protected. The technologies that helped to ensure safety will likely remain important in the year ahead.
For example, store employees can wear Bluetooth tracking devices on their uniforms. If an employee becomes ill, management can quickly identify who they have been in contact with and ask them to self-isolate as a precaution.
Similar technology can be used to monitor how many people are shopping in-store. If the number increases above a pre-determined level, then security staff will receive a notification, meaning they can ask shoppers to wait outside until the store becomes less busy.
8. Tracking staff whereabouts
In case, you have a large store or warehouse, it can be hard to identify where the staff is. The internet of things makes it easier to locate employees.
By wearing sensors (similar to the ones described above), managers can see where team members are at a glance. This not only means they can locate a member of staff but look at where they can improve efficiencies.
For example, if there is a bottleneck in a warehouse space, can management implement a one-way system or look at expanding the area so more people can pass through at any one time?
9. Personalising the shopping experience
IoT can be used to message prospective shoppers, improving their experience and increasing the chances of a sale.
Coffee chain Starbucks has used this technology to reach out to customers. For instance, when customers walk past a store, a transmitter sends an alert to their phone, letting them know all the latest offers and encouraging them to come inside to try some fresh coffee.
10. Buying products
Cash is no longer king, with four out of five shoppers now electing to pay for their products using contactless payment options.
With IoT, customers can now buy using their fitness trackers and smartwatches. They can even pay for their shopping by tapping a ring against a contactless payment machine.
That’s not all. There are now entire retail stores where customers can shop without using a checkout. Amazon Go uses a combination of cameras, IoT sensors, and AI to let shoppers leave the store with their shopping and have their Amazon account automatically charged.
In conclusion: Smart retail and IoT are perfect partners
We, really, hope our 10 ways to use IoT in the retail industry this year have given you more insight into the internet of things and how the technology can be applied to the retail industry. It is known, that the retail industry is all about the efficient use of data. Especially now that businesses are becoming more digitally orientated. IoT means that retail companies can acquire, manage and share this data more effectively with the relevant people.
While the internet of things can be a great industry to get into, the competitiveness of the technology sphere means it is not without its challenges. Only one out of every four IoT-related startups is successful.
This means that if you are looking to move into the world of smart retail and IoT, it’s essential to do your research. Take the time to find your unique selling point and which other companies are prevalent in your specific niche. So, this will help you to build a solid product or service.
Creating a startup is always exciting. In case, you are considering launching your brand new business in the year ahead, we wish you the very best of luck!
Frequently Asked Questions (FAQ)
The Internet of Things (IoT) is a network of physical devices equipped with sensors that exchange data with other devices through WiFi and mobile connections. It enables the collection and sharing of information for improved decision-making.
In the retail industry, IoT is used to manage and share substantial amounts of data, ranging from stock inventory to customer payment details. It works in tandem with artificial intelligence to automate tasks, enhance customer experiences, and bridge the gap between online and brick-and-mortar stores.
The 10 ways to use IoT in the retail industry this year include managing stock, monitoring prices on shelves, offering customer assistance, predicting equipment failure, analyzing customer behavior, automating repetitive tasks, implementing health and safety measures (e.g., COVID-19), tracking staff whereabouts, personalizing the shopping experience, and enabling customers to buy products using IoT devices.
IoT helps manage stock by using sensors to monitor stock levels. When stock reaches a certain level, alerts are sent to staff for reordering, or in some cases, IoT devices can automatically place orders.
IoT simplifies the process of updating product prices on shelves through smart shelf labels. These labels automatically update when a product’s price is changed on a central management platform, saving time and ensuring accuracy across all stores.
Yes, IoT aids in customer assistance through technologies like virtual fitting rooms. These IoT and AI-assisted tools help customers try on clothes and makeup in-store, reducing return rates and enhancing the overall shopping experience.
IoT monitors equipment, such as air conditioners and refrigeration units, using sensors to check temperature, humidity, and power consumption. This allows for the early detection of issues, enabling timely maintenance to prevent stock loss or customer dissatisfaction.
IoT tracks customer routes and buying habits, providing valuable data to retailers. This information is then used to enhance the customer experience and improve marketing efforts.
IoT enables personalized messages to prospective shoppers, offering tailored promotions and information. For example, retailers like Starbucks use IoT to send alerts to customers’ phones about the latest offers as they pass by the store.
Yes, customers can use IoT devices like fitness trackers and smartwatches for purchases. Some retail stores, such as Amazon Go, utilize cameras, IoT sensors, and AI to allow customers to shop without using a checkout, automatically charging their accounts.
Success in the IoT industry requires thorough research, a unique selling point, and awareness of competitors in the specific niche. While the IoT field is competitive, understanding your market and delivering a solid product or service increases the chances of success.
Thinking about making a move into IoT or retail in the year ahead? You are launched is here to help
We have a strong background in technology. This means if you are planning to launch a brand new Internet of things solution, we’re perfectly placed to help.
We can help you build on your IoT idea, working with you to create a thorough business plan and helping you get the funding you need to move forward. And as IoT startup funding is increasing by 15% every year, there’s never been a better time to realize your brand-new business than now!