IoT devices in Retail

Part 4 - IoT devices in Retail.

SERIES B

$94 billion. That’s how much the Internet of Things (IoT) - enabled retail market could be worth?by 2025?as more and more retail businesses adopt IoT technology to improve their products and services.

It is estimated that there will be over?30 billion?IoT connected devices around the world by 2021. McKinsey estimates that the potential economic impact of IoT in retail environments will range from?$410 billion to $1.2 trillion per year by 2025. The increasing usage of smartphones is one of the major contributors that is likely to drive the market growth along with the increase in internet penetration in developing countries such as India, China and others. Developments in new-age technologies such as Artificial Intelligence (AI), Machine Learning (ML), and Big data are also fuelling the demand for the Internet of Things (IoT) in the ever-evolving retail market growth.

With retailers increasingly investing in IoT, customers are bound to enjoy the ‘SMART’ shopping experience through a network of connections linking the physical and digital worlds into an ecosystem of devices. Technologies around smart shelves, 3D-printing, drones, delivery robots and AI-driven platforms are enabling retailers to further automate and optimize supply chains operations, business efficiency and enhanced shopping experience.

Imagine this scenario: While walking into a store, you search for a pair of new jeans on a brands mobile app. Your smartphone pings and opens the store map and guides you to where the jeans you looked at online are on display in-store. You walk over, try them on, put them in your bag and add to the cart. A chatbot asks you if you wish to buy anything else. It also recommends related products - a t-shirt, perfume, belt that will go with your pair of jeans. You complete your shopping and leave the store immediately. Your items are scanned by sensors as you leave the store. ?The final price is then deducted from your mobile payment app. Not only that, you also receive an automatic discount on the bill and get the loyalty points credited to our account.

There are numerous IoT-related benefits to the retail industry, but here are some of the most important ways we think IoT will change retail in the coming years:

Customer experience:

Smart Stores:

1.?????Smart Shelves: Smart shelves are fitted with weight sensors and RFID?tags?to scan the products on both display and stock shelves. Smart Shelves provides real-time data to the store operations team about which items are running low or where the items are incorrectly placed on a shelf, which makes the overall store inventory process cost-effective and more accurate.

2.?????In-store layout optimization: You might be surprised to find your retail space isn’t optimized as per your customers’ behaviour. Using the CCTV data and in-store motion / visual sensor technologies allows retailers to improve their retail layout basis the in-store traffic movement and place the products accordingly.

3.?????Virtual dressing rooms: The advent of IoT devices like smart mirrors have enabled consumers to be able to smoothly try out clothing and accessories virtually and further aiding the buyers in re-purchasing products of their choice, completely revolutionizing the shopping experience.?

4.?????Automated checkouts / Self-service kiosks: Creating an automated checkout system using IoT devices would certainly make your customers happier and more willing to enter your store, given the fast pace of life and more so post-COVID19 where people are increasingly trying to reduce their touchpoints and interactions. As per McKinsey estimates, automated checkouts are expected to reduce cashier staff requirements by up to 75%, resulting in savings of nearly?$150 billion to $380 billion a year in 2025.

5.?????Personalized offers /promotions: The term "mass personalization" may seem like an oxymoron – personalization helps improve consumer traffic, increase conversions and allow retailers to sell their products at full prices and improve profitability. All this, simply by making an effort to provide a personalized experience for customer’s basis their past buying habits.

Smart homes: Technological advancements have made life easier. IoT in smart homes are the Voice assistants. Right from saving time for automated tasks, ordering products, controlling your home appliances to remembering your birthdates and anniversaries, these technologies are bound to change we live a few years down the line.

Conclusion: As more and more IoT devices penetrate across the industry there is scope for massive revenue growth through better product throughput, improved inventory management for retailers along with increasing the overall shopper experience for the customer in the ever competitive market.

We will be covering more of the IoT use cases relating to Supply chain, logistics and equipment management further in the next weekly newsletter.