What is the Internet of Things (IoT) and how does it affect retail? That’s a complex question, and one which many retail CIOs and CTOs are currently contending with right now.
Well, put simply, the Internet of Things (or IoT as it is more commonly known) is the computing concept which refers to connecting everyday objects to the Internet. These devices are able to communicate with each other via machine-to-machine (M2M) communication and act on our behalf. They can automate previously manual tasks and give us more insight on our daily lives and behaviours.
NOT GETTING ON-BOARD WITH A PROPER IOT STRATEGY IN PLACE COULD LEAVE THE MARKET TO HUNGRIER COMPETITORS IN THIS THIRD INDUSTRIAL REVOLUTION.
A classic example, which is often given when people ask ‘what is IoT?’, is that of an Internet-connected fridge, which realises you are out of milk, and orders you a replacement carton before you get home.
Such technology may sound like something straight out of Total Recall or Tron but it is here to stay, and it is already changing the lives of all companies, and in a variety of sectors.
The IoT market is predicted to grow to $7.1 trillion by 2020, with the transport, logistics, agriculture and manufacturing sectors leading the way. Insurance and healthcare aren’t far behind.
However, this opportunity hasn’t been lost on retailers, who are starting to realise that they can leverage these technologies to drive innovation in business.
By using IoT, they can better understand the buying habits of their customers, increase revenues and combat the growing threat from online competitors. It has the potential to completely change the way not only how these retailers operate – but also how we, as consumers, buy products.
Internet of Things (IoT) examples
Some early adopters have already taken the plunge with IoT in retail. There are real-life examples of supermarkets using IoT to improve inventory management, of clothing shops providing ‘smart mirrors’ for interactive browsing and of other stores using beacon technology and IoT sensors to boost customer loyalty by offering discounts based on who the customer is and what they’ve bought previously.
In particular, there are three real areas where retailers are looking to use IoT; on the supply chain, to boost customer experience, and generate new revenue streams. Embracing one or more of these can result in huge company – and customer – benefits.
Yet, despite these early deployments, there are a number of questions that still need to be answered before this technology concept can become mainstream. For example, how will this technology transform the way we buy goods and services? How will it change the way retailers run their businesses? And how can retailers use IoT data whilst maintaining the consumer’s privacy and security? Then there’s also the question of securing budget and backing from C-level to make the project viable in the first place. Not getting on-board with a proper strategy in place could leave the market to hungrier competitors in this new industrial revolution.
With that in mind, IoB looks at six real-life examples of IoT disrupting the retail industry.