The arrival and adoption of the Internet of Things (IoT) marks a major watershed in the world of retail as it is the most transformative concept in retail history.
The IoT refers to the connection of objects in the physical world to electronic virtual networks.
In other words, objects are gaining the ability to communicate data and information through embedded sensors.
For retailers, this means seamless, real-time gathering of data, which will not only improve the customer experience, but also will lead to completely new business models, improved business processes, increased efficiencies, and better consumer interactions.
As an example, think of the point of sale and checkout at a traditional brick and mortar store. With the IoT, a customer will be able to enter a store, choose the products he or she wants and then simply leave the store.
By strategically placing sensors throughout the store, retailers will be able to recognize customers through smart devices as they walk into the store. Having payment cards on file, the retailer can then bill the customer after he or she leaves the store with the merchandise. This essentially allows customers to completely bypass the traditional checkout and dramatically changes the customer experience.
Through the unification of all data sources and the connection of that data to an individual customer, the IoT enables retailers to engage with their customers in a relevant and meaningful way – in real-time. It also gives customers or potential customers all the information they need to make a decision to buy or not buy as product information and marketing messages can be customized to needs of individual consumers.
The bottom line is that if done well, the IoT informs. It’s a resource for the customer to be empowered and for retailers to have the opportunity to engage with every customer segment.
Whether used for marketing, merchandising, operations or real estate strategy, being able to track customer and product movement allows retailers to see patterns in traffic and product flow, which will eventually lead to a day-by-day, daypart-by-daypart, real-time forecast of business that will be accurate enough to develop a coherent, enterprise-wide business strategy.