IoT in Retail Application is Transforming Operations and Customer Experience
IoT in retail application helps retailers in improving business process and operations. In retail industry efficient business processes, for managing costs and improving customer shopping experiences, are directly proportional to the profits of the industry. Including Internet of Things (IoT) infrastructure in the business model for Retailers is essential to remain competitive in the near future. Although it is challenging to find the right implementation of IoT to get maximum efficiency, the scope of benefits outweigh the cost, time and disruption taken to implement the IoT infrastructure.
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Impact of Internet of Things (IoT)
IoT is seen as a major disruptor in the Business Operations of a wide range of sectors like Power, Automotive, Industry, Healthcare and Retail. It is imperative to integrate businesses with the latest IoT trends to find success in the future. According to industry experts, there will be over 10 billion devices working to manage business operations by 2020.
At the current pace of development in future, almost all appliances will be connected to IoT infrastructure and with real-time computing and Artificial Intelligence, it will open a whole new area of business management. Artificial Intelligence is especially being heavily invested into by the top technology giants and they aim to leverage the IoT infrastructure being put in place for creating ‘smart’ business models.
The building of Smart Cities and Smart Hubs will greatly facilitate the implementation of IoT in every sphere.
Implications for IoT in Retail Application
There are several implications of IoT in retail application for improving retail operations, supply chain performance, and customer experience. Below are some of the broad categories of IoT in retail applications:
Customers coming to any retail outlet will like to get the best experience to shop for their product in the most hassle free way. IoT can leverage a host of sensor devices and mobile tools to communicate with the user while they shop. Some ways this can be achieved are –
- RFID is the most common already in use IoT device for In-Store Retailing. It plays an important role in keeping account of stock, security and helps in reduction of shrinkage and improves sales.
- By keeping a record and analysing customer movement in the store it can help in designing a better store layout which leads to better product placement.
- By connecting a customer’s credit accounts and using an NFC card it can help in a contact-less checkout.
Most retail stores use a high amount of energy and workers to run their operations. Some ways can help in better utilisation and cut down on expenses.
- Fitting sensors in air conditioning and lighting equipment can help in reduction of energy costs. Making the store more eco-friendly showing a positive public image.
- Sensors and CCTV cameras which are already present can be leveraged using video analytics and can be placed on the shelves which can monitor the inventory and signal when it reaches low levels, this helps in a better utilization of workers.
Supply Chain Integration
It is essential to work with all the parts of business right from the manufacturing and supply to the retail outlet. That is from where maximum efficiency can be derived in the system.
- Using RFID along with IoT sensors can give better efficiency to the transportation by giving live updates to traffic and weather so to avoid stoppages and deliver in time. IoT can be helpful in the dynamic re-routing in case there is any stoppage and avoid delays.
- IoT can help in better temperature regulation in case of using refrigerated carriers.
Creation of New Revenue Streams
This is one of the best opportunities in increasing sales with better customer connectivity. As IoT is taking importance in almost every sector all the household devices can also be used to connect directly to retail stores.
- It can be integrated into home appliances to keep a level check on some of the basic use items such as washing powder, oils or eggs. If the level goes below a certain value then an order can be placed for the product right away.
- Also, special offers and discounts can be shown to the customer in their home by integrating with on mobile phones apps and LCD TV display. This can reduce advertisement costs and provide better customer targeting.
- Many stores are now using Apps to interact with their customers. IoT beacons can interact with customers while they shop to give them exclusive offers. The App on a Smartphone which is connected to IoT devices at home and the store can greatly help in better customer communication. Now Bluetooth LE Beacons can also be used send messages to registered customers.
Automated Operations and Merchandising with IoT in Retail Application
- RFID is one of the essential tools for IoT. RFID tags are used for inventory management and can be used to monitor temperature and humidity changes for food items. RFID is used to monitor objects which are out of the line of sight but in the range of the reader. Passive tags only respond to reader commands, active tags can detect collisions and sense channels. An effective security measure is shown by its application in car keys communicating to the engine.
- Smart Shelves can be implemented by an Image Recognition Camera or a RFID reader. Checking on the quantity, expiration dates, and location of items can be achieved automatically.
- Smart Fulfilment Centres are important to cater to customers by storing products in warehouses at different locations so that the customer is delivered the product even if it is non-available at one of the stores.
- Intelligent containers can monitor the temperature and humidity conditions to stop spoiling of perishable items. Since the temperature in containers is inhomogeneous sensors can be used to control the settings to maintain an even temperature.
- Fleet Operations Management – It mainly consists of three technologies RFID, GPS and OBD II’s. RFID helps in tracking the product and GPS and OBD II helps in the navigation and driving conditions. Gives a better analysis of the transportation in real time scenario. Also, driver mobile apps can give smart interaction with the system.
- Digital Signage is about direct customer engagement in the sense that suppose the customer has picked up a product then the digital signage will show a campaign related to that product.
- Automated Store Lighting helps in better energy efficiency by using sensors to light different areas according to the presence of people in the vicinity.
- Cold Chain tracking is used when a set temperature needs to be maintained with different modes of transportation for the products.
Best Practices for Implementing IoT in Retail
The most pertinent questions for every retailer will be, how soon the benefits of IoT can be accrued and how will implementation of IoT affect their current operations.
The best way to find an answer is to perform a detailed business study finding all areas where IoT can be implemented with minimum cost and with quick results. One of the best ways to reduce costs and improve profits it leverage the technology already present in the store like Wi-Fi, Bluetooth, and CCTV.
- Small fixes which give quicker results – Energy management requires lower capital investment.
- Sensor Alternatives – Sometimes the job of a sensor can be achieved through CCTV. By applying advanced video analytics and real-time processing.
- Keep a track on Security and Privacy.
Keywords: Internet of Things, IoT, IoT in Retail, Artificial Intelligence, RFID, NFC, In-Store Management, Supply Chain, CCTV, Automated Operations, Smart Shelves, Smart Fulfilment Centres, Intelligent containers, Fleet Operations, Digital Signage
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