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The internet of things – what does it all mean for retailers?

The internet of things (IoT) is introducing itself into every industry and revolutionising the lives of consumers and businesses alike, writes Paul Burke, the vice president of management for cloud and applications at Oncam.

The solutions are now real: From smart technologies in the home like fridges that let you know when you’re running low on milk to beacons in retail stores tracking goods and customer traffic, the power of IoT is beginning to be utilised nearly everywhere. This technology is available for homes and workplaces and is already becoming embedded into the shops that we buy from and the factories that make our goods, whether we’re aware of it or not.

The use of this technology can be a massive boost for retailers and their customers alike. A study in America showed that seven out of ten shoppers were more likely to purchase items in-store over online purchasing if they were given self-help technologies, including help desks and interactive displays. Within the same study, eight out of ten shoppers said that they would feel a greater tendency to buy if they were given a self-help option to find a particular product.

This concept and idea exists on many online retail websites and placing this technology within stores is boosting customer interaction and the sales of in-store purchases.

Let’s get digital

Areas like digital signage are set to grow from $6 billion in 2013 to $27.5 billion in 2018, as retailers continue to digitise the consumer experience. By doing this, retailers can build a digital image of what that customer has bought, their interests and, through the use of data, can predict their future purchases.

As a result, retailers can create a much better experience for their customers and tailor the shopping experience to their needs. This data can also be used for the store’s benefit for instance to cut costs on lighting if an area of the store is not in use or manage the energy used by refrigerators and freezers.

This operational data provides real-time insights to store management and employees. For example, smart building technology, including IoT-connected thermostats, lighting, refrigerators and freezers, can manage energy usage.

Studies have shown that 54% of retailers worldwide with above-average sales understand that the use of IoT is set to have a dramatic change into the way companies will operate and do business over the next three years.

Using personal data

As with all fast-moving and far-reaching technologies there are consumer doubts around the use of IoT and how the data is gathered. A quarter of retailers are using facial recognition technology to track customers around their stores. However, this technology is designed to add insights to improve the customer experience and the facial recognition software is used to track shoplifter and prevent loss throughout stores. It’s not designed to spy on everyone. Although some consumers have reservations around the use of IoT, 24%  believe it is useful if it meant that their shopping experience was enhanced. In addition to this.

The future

Within the next four years retailers are set to spend $2.5 billion (nearly four times more than in 2015) on IoT which will be geared up to increase customer satisfaction, retention and experience. With this significant amount of investment, retailers value the data and business insight that the technology can provide.

Although some customers see this technology as a threat to their personal data, accepting these changes will completely revolutionise how they view and interact with retail brands. IoT adds numerous benefits to consumers’ shopping experience and it isn’t too farfetched to imagine a world where live data from IoT touchpoints like Oyster card readings, gym check-ins or phone locations, enables delivery drivers from retailers to show and predict exactly where a customer will be at different times of day enabling them to adjust their delivery times to suit the customer’s needs.

With customers endorsing IoT and related technologies, it is possible to have a world dedicated to enhancing the customer experience in every conceivable way.