Retail apocalypse seems to be a never-ending phase, especially for the brick-and-mortar retail stores. That’s largely due to the accelerated growth of the e-commerce industry, which makes use of cutting-edge technologies. So, the only way to complete with it is by using the Internet of Things or IoT in retail outlets. IoT is the technology that establishes the intelligent connectivity of devices through the internet. So, hardware such as beacons, RFID tags, BLE tags are connected to the cloud, and data is accessed through it. Further, with the use of object recognition and customer tracking with embedded vision systems, the brick-and-mortar retail stores can ensure better shelf management, track customer interaction with the shelves and also test the effectiveness of promotional campaigns by figuring out what led to a buying decision.
Need for IoT in Retail outlets
Since the online industry is constantly growing at a rapid pace, and simultaneously delivering better customer experience, the brick-and-mortar retail stores need to either change the way they do business, or perish. According to UBS, a leading investment firm, over 75,000 retail stores could be forced to wind up by 2026, due to stiff competition. The reason why e-commerce stores are far ahead of their brick-and-mortar counterparts is because of the fact that they rely upon technology to study consumer behaviour.
For example, if you browse products belonging to a certain category on Amazon, then you would get related recommendations. However, doing the same thing in a brick-and-mortar set-up can be quite a challenge. To do this manually is almost impossible for larger set-ups and for the smaller ones, it may require hiring additional workforce. This is quite undesirable because it increases the store’s overheads and hinders the possibilities of competitive pricing. So, the best way to do it is by investing in IoT and automating the entire process as much as possible. Let us now discuss how you can implement IoT in the retail industry and the core benefits of doing that.
How to implement IoT in Retail?
Retail is one of the oldest and most stable sectors, but it seems to have lost its stability ever since platforms like Amazon and eBay have established themselves. As these platforms connect the sellers and end-users directly, the sellers are in a better position to offer competitive pricing. Also, the buying experience is much better due to the advanced algorithms used by these platforms, which tracks user behaviour and recommends products accordingly.
The only way for the brick-and-mortar retail stores to survive this stiff competition is by using IoT in retail to study consumer behaviour and deliver superior customer experience. However, this needs to be done without increasing the overheads because these stores also need to offer competitive pricing. All of these issues can be resolved by making use of IoT in the retail sector and deploying technology to deliver enhanced customer experience. The use of IoT in retail also ensures a more scientific approach and that too without causing a spike in the store’s overheads.
Implementation of IoT in Retail
Implementing IoT in the brick-and-mortar retail outlets can be of use in several ways. It can help track real-time data. This data would then facilitate innumerable functions including inventory management, internal and external audits, and also compliance. However, at times it may seem like a complex process. So, for better clarity, let us break it down into three — Digitization, Analytics, and Workflow optimization. Let us now elaborately discuss each of these.
Digitization of Assets
Digitizing assets in a brick-and-mortar store by using BLE or RFID asset tags can go a long way. However, while choosing a particular type of asset management technology, the store managers must pick one that offers economic asset tags and readers. Also, you need to take into account other factors such as strong signals emitted by the RFID technology, which can be potentially harmful when you have too many chokepoints and RFIDs. Also, with the Bluetooth 5.0 technology being rolled out, using BLE asset tags could be both cost-effective and more productive. Also, the Bluetooth readers are comparatively cheaper as compared to the RFID readers.
Analytics for better customer insights
By accessing the data procured from the RFIDs, BLEs and Computer Vision, one can get better insights into consumer behaviours, such as the number of visitors and their dwell time. As this data indicates the exact spots where customers spend more time, it gives the management a fair idea about the most favourable spots for product placement. Also, it lays the foundation for promotional offers, which can result in better revenues. Not to mention, retail outlets can also make use of this data for inventory management and logistics.
Workflow Optimization and Regulatory Compliance
FDA and USDA require businesses to store certain products, like for example meats and juices within a specified temperature range. If done manually, this process could prove to be quite expensive and time-consuming. Also, there could be errors which may adversely impact the retail outlet during an audit. However, this entire process can be automated by using connected sensors to stream live temperatures, which can then be recorded in the cloud. This optimizes the workflow and makes regulatory compliance a lot more accurate. Also, as you can pull out reports with the click of a button, the entire process becomes extremely convenient.
Since the driving force behind the success of e-commerce stores is the use of technology, the brick-and-mortar stores need to follow the suit. Although it may seem complicated to implement IoT in retail, it could be much more effective and cost-efficient and free from human error. As shown above, using IoT in retail outlets can ensure better shelf management for large retail chains and also help track customer interaction with the shelves. However, the most critical aspect while implementing IoT in retail outlets is the interaction between the hardware and software components. Therefore, it is important to plan a system architecture that is reliable, high performance, and scalable.