Innovative solutions for the retail sector with the Internet of Things

As the era of the Internet of Things is now upon us, smartphones, tablets, beacons, smart bands and electronic tags, including RFID chips, are everywhere. Despite the fact that these gadgets all have different primary purposes, they also have the ability to communicate with external devices which allows you to actively track your customers’ locations and obtain valuable data about your target audience.

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Let’s say you own a chain of clothing boutiques which, like any such shops, have several fitting rooms. Using the security cameras near the fitting rooms or small motion detectors placed on the entrance to the booths enables you to see which cabins are free and speed up the queue to offer better service to your customers. At the same time, these sensors can also act as beacons, which means you can send product suggestions, campaign information and special offers to the smartphones belonging to the customers in the booths. Considering that 70% of customers who enter changing rooms emerge with a decision to buy, this could be a great advantage.

Here you have two advantages besides advertising:

1) If the customer is spending more than five to ten minutes in a fitting room, presumably not due to a stuck zipper, he or she probably has a real intention to buy.

2) When the beacons interact with the smart tags on the customer’s chosen products you can also see customer behaviour in action. The analysis of real-time information such as which products are tried on more often, the percentage of fittings that result in sales, or how long customers usually spend trying a product, may well change the way you look at a routine day in your store.

Similarly, with the help of smart sensors, lighting, air conditioning and humidity can be maintained at desired levels. When necessary these factors can be controlled remotely to ensure that your customers enjoy a comfortable shopping environment.

Examples of how IoT is being used in retail locations around the world

The Internet of Things does not only provide campaign optimisations by relying only on monitoring customer behaviour. Smart devices can also instantly warn you when something goes wrong in your business.

In addition to following online trends, with IoT devices you can also see which items are less popular, and those that have remained unsold or are low in stock, and you can remain informed about, for example, problems with the air conditioning. Moreover, you can combine loyalty programmes with online navigation and search behaviour.

You can also observe your customers’ journey through your store by using anonymous data taken from their smartphones’ wireless networks as they walk past beacons and virtual triggers. In this way you would not violate the privacy of customers who do not want to share personal information such as their names and telephone numbers.

Here are a few practical, useful and secure uses for IoT devices from around the world:

The US retail giant Walmart is using IoT products both to understand customer behaviour and for stock, inventory and store management. The company collects social media information to identify popular products and can even pair this with the customers’ shopping habits. For example Walmart data can show the company that when the temperature rises above 26.6 degrees and there is a mild breeze, Americans tend to buy more salad ingredients.

The entertainment giant Disney tracks visitors in its amusement parks by giving them RFID-based MagicBand wristbands. These integrate with hotel reservations services as well as Disney’s payment collection systems.

As for Amazon provides customers with special Wi-Fi based Dash Buttons that link to their mobile devices. So, when a customer runs out of detergent they can simply press a button and the system ensures that a new supply is delivered to their homes on the same day.

In which areas can retailers benefit most from IoT technology?

If you are inspired by the above examples and are asking yourself “how can I use IoT in my business?” you can also have a look at the short list below:

Product tracking (ease of access to products, prevention of loss and theft, supply chain optimisation)

Optimisation of customer interaction and customer experience

Smart business infrastructure (user experience, back office workflow optimisation)

Dynamic hyperlocal marketing (same day delivery from nearest stores instead of a central shipping centre)

Monitoring customer behaviour

Mobile payment systems

In-store inventory management

Optimising human and business resources

Remotely monitoring of air conditioning, lighting and security control systems in real-time, with instant detection and resolution of problems

In conclusion:

Today we have beacon technology, smart device integration, location services and SMS campaigns, with the promise of even more in the future. In the last 10 years, which have seen e-commerce businesses spreading rapidly, IoT solutions and services have supported physical stores. This proves that IoT approaches and the technological innovations they offer do not try to change customer habits but, on the contrary, they adapt the system to suit customer habits.