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 Klépierre,
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.
