June 18, 2018

How the Internet of Things (IoT) is Reshaping the Retail and Ecommerce Landscape

Internet of Things RetailOver the past few years, the internet of things (IoT) has caused quite a stir and now it seems set to cause a positive change in the retail and eCommerce world. Here is how the internet of things (IoT) is reshaping the retail and eCommerce landscape.

A term coined by Kevin Ashton—an UK based entrepreneur, the internet of things (IoT) refers to the physical devices that work and process information by using internet. Intelligent security systems, smart home automation and more—there has been an increased application of IoT in the past few years.

Industries across the globe are benefiting from IoT, with retail/eCommerce being one of them. The retail and eCommerce sector is currently undergoing a major technological disruption. As the lifestyle of the consumers changes and becomes more adaptive to online shopping, it will be crucial for players in the industry to leverage technology to provide services that can lead to customer delight. Enter the internet of things (IoT).

With most of the growth in the retail sector taking place in the digital space, eCommerce is expected to become the future of retail. In 2016, the global retail eCommerce sales were US$ 1.86 trillion and this number is expected to increase to 4.48 trillion by 2021. By enabling devices to exchange data with each other over the internet, IoT helps retail and eCommerce businesses to perform their operations more efficiently.

Enable More Connected Experiences with IoT

According to the experts, the internet of things (IoT) will revolutionize the in-store shopping experience. Examples of technological advancements that will enable this include intelligent barcodes that customers can scan to get more information on products, the ability of shoppers to sign up for text messages that offer special deals on products as they move around stores, and in-store advertising that uses facial recognition and can provide personalized insights.

The purpose of the above is to create fun, exciting shopping experiences that integrate numerous promotional tactics. Moreover, IoT can help in-store employees to learn about shelf inventory in real time, which enables them to update price in real time without having to manually apply new price tags.

Enable Smart Inventory Management

Most retail businesses that operate online want control over the data of items coming into the warehouse and those going out of it. IoT sensors or RFID tags installed in the systems can help ensure that. With real time inventory management, store owners no longer need to hire people to keep a physical check on the items coming into and going out of the warehouse.

By improving the monitoring and tracking of inventory items, RFID tags and IoT sensors minimize human errors in reordering items. Moreover, this allows information such as product type, name of manufacture, the expiry date of the items and their batch IDs to be automatically stored in the system without human intervention. Additionally, smart shelves reduce customer dissatisfaction due to out of stock products and they can track the number of products sold and automatically place orders as soon as they stock reaches reorder level.

Improved Warehouse and Logistics Management

In addition to optimizing inventory and minimizing shortage, IoT can help eliminate over-stock of items in the warehouse. With IoT, online store owners can get more access to warehouse and logistics data such as the personnel involved, traffic conditions, location, temperature etc., which makes warehouse and logistics management more efficient.

An example of the above is the use of temperature-monitoring sensors to check the optimum temperature for perishable products and sending whenever needed. Moreover, there are sensors that can examine the forklifts in the warehouse for predictive maintenance, which minimizes the loss of productivity.

To ensure that there are no problems related to missing shipping, IoT helps automate the shipping and delivery processes. For example, to enhance its picking and packing process, Amazon—the American ecommerce and cloud computing company, uses warehouse robots. These robots have a loading capacity of 300 kg and can move at a speed of 8 km/h and this is expected to improve in the future.

In addition to the above, IoT helps to supervise the speed of vehicle and temperature. Needless to say, all this helps to ensure customer satisfaction.

Improved Customer Service

The internet of things (IoT) presents businesses with an opportunity to differentiate themselves from their competitors. For example, Walmart—the American multinational retail corporation, uses IoT to get insights about products popular on social media. This allows the retailer to deliver a comprehensive shopping experience to customers with a high level of personalization, which increases client satisfaction and engagement.

IoT can also help in personalized advertising for ecommerce businesses to target a specific group of customers. By recognizing shopping patterns in online browsing and search trends, the technology enables businesses to sell targeted products to their customers. With IoT, you can customize products, services, and offers according to the preference of your customers. Also, since more data related to consumer behavior is available to you, you stand a great chance of attracting customers and influencing their purchase decisions.

Intelligent Shopping

With the launch Amazon Go—the partially automated grocery store operated by Amazon, the buying process has become increasingly automated. Customers can simply walk into a store, pick up what they want, and leave without physically checking out or making a payment. Moreover, in the future, there will be widespread application of predictive systems that know when the customers leave for shopping and the products will get packed ready to be picked up based on the list customers send to the vending machines.

IoT is reshaping the retail and eCommerce landscape and businesses that do not adopt the technology risk being left behind by their competitors. So, adopting IoT is the only way forward for retail and eCommerce businesses.

by Bobby J Davidson

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