Tuesday, January 20, 2015

Is the Internet of Things the Future of Customer Experience?

Retailers are constantly looking for ways to improve their customer experience and the increasing move from the physical world to the online world means the Internet of Things (IoT) is becoming the future of customer experience. The IoT is a network of objects, products and services that are digitally interconnected and can communicate with each other without human interaction. Without sounding too utopian, it means that maybe in the near future your watch could soon communicate with your television which in turn could control how much water your vegetable garden gets. In essence it makes our lives a lot easier.

These advances in smart technology mean that everything we do can become more programmable and personalized, which is a huge benefit for retailers and customers alike. The IoT means that real time analytics will be able to give customers a better and often more efficient retail experience. For example, Internet technology such as Bluetooth beacons will be able to connect with smartphones as customers enter a store and check their movements. When compared to the customer’s purchases, it can help to create an idea of what the optimum layout for the store should be, which in turn will aid the retailer’s future revenue. In terms of customer aid, in one French clothing store Kl├ępierre, there is an ‘inspiration corridor’ that means the customers can receive information and images of recommended clothes using a Microsoft Kinect body scanner. The clothes will come up on screen and they can pick and choose what they like and the whereabouts of the clothes are linked with their smartphones so they can easily be found. These in time analytics help to create an easier and more unique experience for the shopper and retailer.


Zebra Technologies have found that almost 96 percent of retail decision makers are prepared to implement the changes in order to utilize IoT technologies. It was found that 67 percent have already implemented IoT and 26 percent planning to use it within the year. More than half of the firms surveyed expect IoT to give them greater information about the condition and whereabouts of items which will lead to a better customer experience and new revenue streams. Already technology such as RFID has given benefits to retailers such as 99 percent inventory accuracy and a 2-7 percent sales increase. Research firm Gartner believes that by 2020 we will have 26 billion smart and connected products in use (around 3.3 devices per person, not including smartphones and tablets).  

However, there are drawbacks - Zebra Technologies found that 56 percent of the companies said integration challenges were a big problem to adopting the IoT and 47 percent were concerned about security and privacy. There may be a lot of people who would not like to have their likes and locations constantly tracked and analyzed.

The Internet of Things does seem to be the future for retail. This divergence of the physical and digital world means retailers will be increasingly providing a service as well as just a product. By providing a better service and improving the consumer’s experience will ultimately result in higher revenue and keep customers coming back.


About the Author: Harry Kempe, a marketing intern at IIR USA, who works on various aspects of the industry including social media, marketing analysis and media. He is a recent graduate of Newcastle University who previously worked for EMAP Ltd. and WGSN as a marketing assistant on events such as the World Architecture Festival, World Retail Congress and Global Fashion Awards. He can be reached at hkempe@IIRUSA.com.

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