August 21, 2019

The future of retail with the advent of the Internet of things

Experts believe the rapidly developing Internet of Things (IoT) is one of the technologies that can not only simplify the work of certain areas and areas of life of a modern person, but also change entire industries, customer behavior patterns and, as a result, company business models. Perhaps the greatest effect can be expected in the retail sector, where much attention is paid to any new products that can distinguish a company from a large number of competitors and minimize staff costs, logistics or any other processes. It is in the field of retail that the greatest breakthrough and expansion of the presence of IoT technologies is expected in the coming years.

With the costs that will help eliminate completely or reduce IoT by a factor, everything is more or less clear. In this regard, cargo transportation, warehouse logistics, remote monitoring of equipment operation with informative monitoring of the current state and management of repair efficiency, can only be performed using robotic systems, sensors and other elements of the IoT infrastructure. According to the forecasts of the retailers themselves, as a result of these innovations, labor productivity will at least double in comparison with the similar infrastructure of today's processes.

But the greatest breakthrough and density of the introduction of new products is expected in the field of work and predicting the behavior of customers, as well as providing them with the right products at the right time, the formation of a flexible pricing policy. For retail, the task of using and implementing IoT so far is precisely to maximize sales through multichannel and personalized communication with their customers, who today make their purchases, almost without looking up from the smartphone screen.

What is IoT in retail

The simplest IoT language can be called a network of objects equipped with sensors, sensors that can communicate with each other, while transmitting data and performing analytical work. In the near future, retail kiosks are most likely to see touch kiosks, RFID tags, traffic meters, various tracking systems, digital signatures, as well as buyers’s mobile devices to help sellers.

RFID sensors

This technology allows you to know what is happening in the store and in the warehouse with each product. Analytical systems that process information from these sensors will immediately know what the buyer took and in what sequence he makes the choice. This will allow us to promptly offer the most suitable options from the same or adjacent area. For example, for shirts selected in a specific color scheme, the buyer will get a choice of several ties that are relevant this season, a discount in this case can also be very useful.

Another application of this technology is to fully inform the buyer about the product. Imagine the choice of wine or gadgets, when, picking up a bottle or smartphone, you immediately see a full description of the product, reviews and additional offers on a nearby screen.

Traffic counters

The technology, which is especially relevant for malls and which allows minimizing the negative emotions of customers from a long line in the queue, works effectively in the case of managing cash desks, and also allows you to evaluate the trajectories of buyers, and more efficiently arrange goods in the hall. Approximately for the same purposes tracking systems are used.

Touch Kiosks

This technology of using electronic kiosks almost completely eliminates the need for the presence of the seller and saves on retail space (when large goods cannot be placed on the trading floor). Great potential for using technology in the case of purchases of children's toys, household and construction equipment. One of the private options for such kiosks can be considered sensory mirrors in the fashion industry, which allow you to select colors and styles of clothes directly in the dressing room from the mirror (the seller only brings the product of interest).

Price management

Perhaps the biggest effect that can be achieved by using IoT in retail today is related to price management - a serious headache for large retail - just imagine a retail chain in hundreds of stores in all time zones of the country. “The old fashioned way” it takes several days, using modern technology - a second. But even greater results for sales can be achieved with the operational management of prices in the case of stocks and the formation of a flexible pricing policy. Here, according to various estimates, the effect for large retail can reach 10% sales growth.

Summary

The worldwide trend of IoT usage in various industrial sectors is already proving its effectiveness. In retail, 65% of entrepreneurs already use modern technologies at the planning and start-up stages of business; in Russia, the IoT market, according to forecasts by J'son & Partners Consulting, will grow to 1 billion by 2020.

For retail, IoT answers quite simple questions: what is in greatest demand, what were they taken to the fitting room, how did they combine different things, what were they interested in. Analytics of these processes allows us to optimize merchandising, procurement and improve business efficiency in general. The main barriers to the development of technology are the complexity of the technologies themselves (including the psychological perception by retail owners) and the relatively high price of the issue, which, by the way, is constantly decreasing.

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