Embracing IoT in Retail
In the next century, planet earth will don an electronic skin. It will use the Internet as a scaffold to support and transmit its sensations.” – Neil Gross, 1999
Everyday physical objects are becoming uniquely identifiable and embedded with the ability to connect to other devices or networks.
The Internet of Things (IoT) in true essence is the inter-networking of physical devices, vehicles (also referred as “connected devices” and “smart devices”), buildings and other items—embedded with electronics, software, sensors, actuators, and network connectivity that enable these objects to collect and exchange data.
|Disruption Drivers and Impact Associated
Together with other disruptors, IoT will fundamentally reshape the industry in coming years and the impact would be relatively significant.
IoT Building Blocks
IoT comes to life when its multiple building blocks simultaneously operate and communicate with each other.
Retail Industry going IoT way?
IoT is driving innovation and new opportunities by bringing every object, consumer and activity into the digital realm. At the same time, leading businesses are making similar changes within their enterprises by digitizing every employee, process, product and service.
The IoT will be particularly disruptive to the retail industry.
- Improvising and refining the customer experience to next level
- The IoT presents an opportunity for retailers to develop a vastly improved ecosystem that connects physical and digital worlds, allowing bidirectional, real-time interaction with consumers both inside and outside the store
- Optimizing supply chain operations
- Connected devices and products provide retailers with the opportunity to help optimize operations in the face of a more complex supply chain, increasingly important digital channels, and a more demanding customer. RFID technologies, for example, can improve the precision of inventory tracking.
- Introducing new channels and revenue streams
- We’re already seeing examples of incremental revenues retailers can help achieve by expanding into new channels or creating new, high-margin product categories for the emerging “connected home.” Household appliances, home security and comfort products, even health and wellness products are all becoming part of the IoT ecosystem. Retailers in home improvement or consumer electronics sectors not only can drive more sales of these connected devices;
- Some retailers are taking further advantage of the wide array of connected products by becoming an integration “platform.” The concept behind these platforms is to make it easier for customers to make all of their in-home devices talk to one another.
IoT, a Reality – How?
It’s important for retailers to consider taking steps now to lay a foundation for IoT and better ecosystem in below 2 major areas –
IoT challenges for retailers and the future journey
The biggest challenge with the IoT is the rapid evolution of the scope and variety of technologies which can be used in the connected ecosystems. In retail specifically, the biggest and immediate challenge for companies to overcome is managing, analysing and acting on the reams of data pouring in from all connected devices.
The time to unleash IoT is now. It is the first step to transform your store for 21st century retail. It addresses one of your most pressing challenges – how to provide a personal, seamless and differentiated experience for customers who do not think in terms of channel? Retailers that take the lead in this space stand to gain an important advantage in an already competitive environment. Early adopters will be positioned to quickly deliver IoT enabled capabilities that can increase revenue, reduce costs and drive a differentiated brand experience.
Our own thinking on this continues to evolve and we expect to witness additional perspectives further. One thing is however clear – to truly build value from IoT investments, retailers need to be expansive in their thinking, consider innovative applications and use supporting technologies such as augmented intelligence.
Additional References/Resources –
- What is IoT
- 5 Key Challenges Facing The Industrial Internet of Things
- Internet of Things Revolutionising The Retail Industry
- LinkedIn | Smart Retail Stores Ensuring Best Customer Experience
- IDC Custom Solutions