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Four Ways The Internet Of Things Will Innovate The Retail Industry

Via Forbes : The Internet of Things (IoT) will disrupt all industries, but there’s little doubt that the retail industry will be one of the most disrupted.

More so than companies in other industries, retailers are increasingly coming in direct contact with consumers that fully embrace digital transformation in their lives, including IoT-related technology and innovation.

Leading retailers are already developing strategies and plans to take advantage of IoT-related technologies. According to IDC, digital signage use in retail outlets will grow from $6 billion in 2013 to $27.5 billion in 2018, as retailers continue to digitize the consumer experience.

New technologies are permanently transforming how customers communicate, interact, research and shop for goods and services.

Soon, the use of cognitive computing will enable retailers to deliver the right retail experience at the right time to customers to inspire lifelong brand loyalty.

IoT data harvested from smartphones, wearables, sensors and other devices will provide significant new insights and opportunities.

Paired with cognitive computing, this IoT-generated data will assist retailers in understanding and responding to the disrupted landscape and changing customer expectations.

Retailers that want to take advantage of the the Internet of Things will innovate in four areas:

1) Enhanced customer experience: Increasingly, customers expect personalized service based on their shopping histories and value a one-on-one relationship with a brand.

Combining data from in-store IoT devices with customer shopping history, retailers can create a single view of each customer, find patterns and deliver a more relevant shopping experience.

They can shape brand experiences in real time and in ways that reflect customer interests and lifestyles. For example, a retailer could use a shopper’s in-store location to deliver timely, relevant and personalized content and offers, such as digital coupons or loyalty rewards.

2) Optimize store operations: Data harvested from IoT sensors and devices will enable retailers to not only better manage store assets, employee labor and energy usage, but also improve in-store marketing efforts.

This operational data will provide real-time insights to store management and employees. For example, smart building technology, including IoT-connected thermostats, lighting, refrigerators and freezers can manage energy usage.

At the same time, in-store IoT-enabled smart cameras, beacons, and sensors can be combined with real-time location data from apps on smartphones to show customer traffic patterns and buying behaviors. Employees can quickly react to bottlenecks, reducing customer wait times.

3) Improved inventory and supply chain management: Retailers not only want to know what products are selling but also why.

To help answer that question, they need to know who is buying those products, where (in the store) those products perform the best and any other information that can better predict future sales.

IoT solutions can help retailers monitor and track inventory in new ways. For example, IoT-enabled systems can trigger real-time inventory actions based on data from high-resolution cameras and sensors on packages, shelves and other assets.

IoT data also can be analyzed to help understand what’s underperforming and overstocked, what’s running out of stock and the impact of time of day, weather and other environmental conditions, online trending and countless other potential variables.

4) Capture new revenue opportunities: Leading-edge retailers will learn how to take advantage of the IoT to seek out new methods of acquiring customers and increasing revenues.

In the store, customers left waiting too long may leave without spending money. An in-store app can identify long wait times at certain locations in the store, sending customers text alerts and notifications to save at-risk purchases.

And by connecting the home with the retail store, items can be replenished faster and more conveniently. For example, sensors on products, kitchen pantries and refrigerators can automatically order groceries when needed. Buttons on a washing machine can help homeowners order new laundry detergent.

Customers are more empowered than ever before. Creating real, relevant connections with them has become extremely challenging. Retailers that lead in the adoption of IoT systems and solutions will gain an important advantage in a hypercompetitive environment.

Retailers that want to be innovative and stay current with the latest technologies need to embrace the IoT and embed it into their operations, not only to impact front- and back-office process efficiencies, but also to earn the loyalty of next-generation consumers.

Bill Chamberlin is Principal Analyst for IBM Market Research.

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