The retail technology arms race shows no sign of slowing. Instead, it’s viewed as a panacea for improving efficiency, resolving supply chain disruption, delighting customers, and driving up revenues. As retailers strive to deliver on the omnichannel vision, they are increasingly looking at innovative ways to infuse technology across all of their operations. IoT is playing a pivotal role in retail transformation.
The ongoing pandemic has turbo-charged the pace of technology adoption, leading to an array of unparalleled innovations. As retailers endeavor to turn shopping into an experience that delights consumers, IoT will play a pivotal role in blending the physical in-store experience with the digital shopping experience.
Smart shopping will become increasingly sophisticated with 5G enabling more devices to access the internet simultaneously. The enhanced connectivity allows the seamless transfer of data and information, supporting a range of use cases that improve the efficiency of retail operations and deliver personalized experiences.
Three Changes IoT is Bringing to Retail
So how will IoT help reshape the retail landscape in the coming years? Below are three ways it will transform customer-facing and back-office operations.
The Instore Experience Will Evolve
With the rollout of 5G, RFID tags will become pervasive, sounding the death knell for the traditional cashier checkout experience. Instead, intelligent technologies and sensors will track every item and automatically charge a customer’s preferred payment system like a credit card, removing the friction from the physical shopping experience. The cashier role will become obsolete and stores will no longer need to dedicate physical space to checkout.
The smart in-store experience by 2025 will include digital signage, on-shelf displays, beacons, and price tickers for active pricing. And by harnessing the vast volumes of data from activity across digital and physical properties, retailers will be able to create personalized experiences for customers as they browse the physical store.
Drone and autonomous vehicle delivery will become increasingly common as part of the connected retail experience as brands strive to meet the demands of consumers who are wanting increasingly speedy service. Robots will be widely deployed in stores and fulfillment centers to further automate, simplify and optimize retail experiences in-store.
When it comes to optimizing and automating operations, IoT will play an increasingly prominent role in the retail sector. Smart warehouses will incorporate a slew of connected devices, from automated fulfillment to self-organizing and auto-optimizing inventory storage solutions.
The wide-scale deployment of sensors and RFID tags throughout the retail ecosystem will help alleviate supply chain disruptions. The sensors will communicate when stock is low and request the supply chain to ship more or submit a reorder to ensure that the store never runs out of a product. By connecting everything, retailers will have complete visibility enabling them to provide accurate insights about when products will be delivered or available in-store. This will reduce the friction that customers are currently experiencing due to supply chain disruption. By fully integrating IoT technology into the supply chain ecosystem, it will deliver operational efficiencies and ultimately provide businesses with a competitive advantage.
From Connected Devices to Subscription Services
As IoT devices become ubiquitous in the retail industry, the focus will shift to delivering subscription services and entirely new business models. Intelligent technologies will allow organizations to treat customers as a segment of one and roll out hyper-personalized services. This could take the form of a connected fridge presenting menu options for the week based on an individual’s preference (low carb) and then automatically suggesting shopping lists with the preferred grocery delivery service for the ingredients required for the meals. By 2025, 50 percent of US households will have at least one of these subscription services. The insights and analytics that can be brought to bear on the rich data streams provided by IoT can deliver an interesting and varied menu to customers while also minimizing food and packaging waste.
However, the increased complexity that the IoT enables will require retailers to rethink how they test and monitor the performance of the entire connected shopping experience to ensure it aligns with customer expectations. This is a critical step for retailers hoping to reap the financial benefits of delivering a seamless omnichannel experience that delights customers.
IoT Will Transform Retail
The coming years will be critical for the retail industry as it strives to transform the customer experience and deliver operational efficiencies. The innovations that smart IoT systems and devices provide will be pivotal for retailers in their quest to accelerate the fusion of the digital and physical experience.