The original post by Jen Clark can be found here.
Changing customer expectations
While 85% of consumers still prefer to shop in-store, their expectations are shifting. Now, they are demanding experiences that transcend physical and digital boundaries.
The retail industry landscape reflects this emerging need: margin pressure is increasing, with a 1.9% profit decline despite a 4% spending increase this holiday season. Technology is advancing dramatically, and 52% of retail CEOs are concerned about the pace of technological change. The competitive landscape is shifting too, and 60% of CEOs now expect more competition from other industries.
With the help of the IoT, retail is expanding beyond simple online transactions and in-store shopper experiences. Let’s look now at some of the top areas of IoT value creation.
Top areas of IoT value creation in retail
Predictive maintenance: instrumented devices in-store can monitor the health of physical assets
Inventory management: a real-time picture of stock levels
Staff optimization: using staff members’ time more effectively
Individual engagement: via personal devices
Automated checkout: no more waiting in line
Business model transformation:
The future of retail
A connected world brings retail experiences to the individual wherever they are. Connected appliances such as smart washing machines can automatically order detergent when you run out. Developing infotainment systems in vehicles mean customers can shop from their cars, or receive reminders to pop by the store on their way home. Items can be delivered by drone.
The bricks and mortar store still matters, but it needs rethinking. A store instrumented with IoT devices can impact:
Energy use management
Foot traffic monitoring
Real-time stock-out monitoring
Item location tracking
Smart signage / pricing
The IoT has a lot to offer the world of retail, but how do you get started? Here are three key suggestions:
Partner to innovate
Pilot in store
Scale based on real ROI
Stores that have implemented IoT capabilities report clear positive outcomes. At Tesco, real customer pilots around food freshness and shopper insights have led to up to a 40% cost reduction and up to 5% productivity improvements.