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5 Ways Internet of Things could be changing the retail industry
At the end of 2015, and in the first few weeks of 2016, we have had various clients approach us to solve some of the problems they are experiencing in the retail industry. The problems they were experiencing were inevitably to do with the standard issues that retailers worldwide need to deal with; stock controlling, management reporting, and how to get into the e-commerce space from their brick-and-mortar business model. And, while the problems were common, the solutions vary in quality and effect.
It is all about bringing the successes of the online retail industry together with the successes of the brick and mortar retail industries. Here are 5 aspects that we came across that we think should change the way retail companies run their businesses.
Emotional analysis is technology that has recently started to gain traction in some international markets. The use of existing CCTV cameras or strategically placed webcams has led to a whole new way of gauging a customer’s reaction to a particular advert or product. By determining the demographics of a customer the retail store is able to display an advert that the customer is more likely to respond to. The industry of targeted adverts is a major one in the online retail space. Google is at the forefront of this industry and has invested a lot of research and development in understanding internet users’ actions. The power of knowing who you are talking to, as well as how they are responding to your message is huge and is likely to start to gain even more traction going forward.
Ok, so you have had huge success in the retail industry for a number of years but you have lost some ground to the e-commerce market. You want to go into the e-commerce market but this normally means a completely new channel of business that would often need to be run independently of the retail store, thus increasing costs and decreasing the supply chain optimization. This is the case for some of the biggest retail leaders in the world. Internet of Things seems to be able to offer a solution to this problem. Macy’s has implemented a system whereby all of their stock items are tagged with an RFID chip. The number of items of a particular colour and size of that product is directly connected to the stores e-commerce site so that there is only one channel of business that requires stock control. The advantages are huge in the growing e-commerce space of South Africa, where the largest apprehension towards e-commerce is the lack of trust. The knowledge that a customer can buy an item online and go and collect it from a well-known store is a potential game-changer for many retailers.
Crowd analytics make use of the security cameras or strategically placed cameras in a store to measure the demographics and patterns of the customers in a retail environment. Knowing how many customers are in your store at the various times of the day, as well as where those customers travel within your store, are just two pieces of information that could be invaluable to a business. Knowing how customers move around in your store, split by their demographics, allows retailers to gain huge insight into how a store is doing. Has that customer been waiting in the queue for longer than 5 minutes? Analytics and reporting can flag that for you and instantaneously call for back up from one of the shop assistants.
Understanding how traffic moves in your store was something that required analysts to be present to observe the customers. Internet of Things has allowed for heat maps to be created through camera footage to create a visual representation of the high volume areas in the store. Knowing this lets the retailer make smarter decisions about where the most lucrative places in the store are or where the best position is for an advert. Beacon technology lets the retailer target customers through their cell phones to inform them of a special on an item that they are near to. It’s about engagement again and knowing the demographics of the customer near to a digital billboard allows the customer to place targeted adverts on that board and measure the reactions.
Pooling all of the information to empower management to make informed decisions is really how a retail store starts to reap the rewards of adopting an approach that focuses on technology to increasing sales. Information is power, and the Internet of Things gives you information- in bucket loads. These solutions are all able to measure their own successes and failures, as well as the performance of a number of different factors in the retail store.
The insights that the Internet of Things can bring can truly change the way retailers run their businesses. As with any technology, however, the challenge that most people have is changing their ways to make use of the advantages that they are offered. Having an open mind and an ability to adapt is key to ensuring that a business is ready to move to a technological solution.
