To say that the Internet has changed everything is an understatement. The Internet is evolving, growing, expanding and reaching places and devices that, not long ago, remained unconnected. Leisure, personal relationships, communication, work, consumption, education… everything has been affected to a greater or lesser extent by the digital revolution. And yet, discussing this revolution seems repetitious, obvious and almost antiquated. Until not long ago, we asked ourselves, “Why should we connect “things” to the Internet?” Today, with IoT in full force, we’re asking ourselves, “Why not?”
Retail is, without a doubt, one of the sectors in which IoT has been the most disruptive. The digitalisation of processes has opened doors to new business models, created new markets and attracted new clients. But, what exactly are we referring to when we talk about Retail and IoT? What changes have occurred?
Let’s start from the very beginning
The supply chain accounts for a significant part of a product or service’s total cost, hence why companies seek to perfect and optimise each one of its phases. The arrival of IoT has allowed companies to completely rethink the supply chain’s function, from a product’s origin to its eventual sale. Companies are working on obtaining the most strategic data possible, thanks to specialised devices and sensors. The localisation, monitorisation and analysis is completed in real-time and a product’s status is now known along every step of the supply chain, which allows companies to optimise, modify or improve their processes, as well as evaluating any problems that may occur.
In the early stages of the supply chain, manufacturing, inventory and shipment processes are monitored, and the quantity of data collected can often be overwhelming. It’s important to know how to analyse and interpret all of this raw data, but traditional data processing and storage systems are becoming less and less desirable, particularly in an environment in which new data entries, devices and users need to be continuously registered. For that very reason, methodologies based on Edge Analytics and the use of decentralised algorithms, such as Blockchain, are now a lot more favourable. Distributed data processing makes more sense in an IoT ecosystem, since it’s composed of thousands of devices, each with their own computing and storage capacity.
In short, it’s important that we change these powerful (and expensive) centralised machines with a great capacity for processing, for a network of devices that, together, can equal or even exceed said capacity.
The final phase of the supply chain, the one in which the client plays an important role, is also succumbing to the unstoppable advances of the Internet of Things, particularly in terms of achieving a personalised, harmonious and smooth shopping experience. The development of effective omnichannel marketing strategies is becoming increasingly important for brands.
Geomarketing and localisation services integrated on mobile phones, wearables and in the interior of establishments, allow us to collect an important amount of client data and be more precise when predicting consumer behaviour or recommending purchases.
Many brick-and-mortar stores are installing sensors in shelves with the aim of elaborating heat maps, identifying demand peaks and tracking inventory in real-time (including out-of-stock), but the big focus is currently on indoor technologies which are designed to collect useful user data. It’s becoming increasingly common to find tracking and monitoring systems in commercial areas, such as Wi-Fi beacons, RFID systems and NFC technologies. The construction of shopper profiles can also be used to generate real-time campaigns for exclusive and personalised offers based on purchase history.
Autonomy and automation. In the future, IoT devices will be self-sufficient when it comes to placing orders for us. It will no longer be necessary for us to switch on a computer, access an online store’s website and place an order. If our fridge detects that we’re going to run out of a particular product sooner than expected, it will automatically place an order according to our dietary preferences.
This type of behaviour is fantastic news for e-commerce companies, but not so much for the traditional online stores that we know and use today, which are unable to adapt these advances. Demand has increased, therefore so has supply. Users don’t want to waste time choosing between millions of products; they want recommendations, they want it to be made easy for them so that they can focus on the more important aspects of their lives.
User data, as well as their browsing data, can be used to make e-commerce experiences much more personal. Smartphones are a fundamental pillar in this context; our location, the places we visit and the shop windows we stop to take a look at are able to say more about our consumer behaviour that we can. This is all valuable information for any ecommerce company that wishes to really impact its target market.
It’s important to know how to adapt to new client and consumer needs, who currently have more options and receive more incentives than ever. Demand is increasing and it’s now more necessary than ever to be efficient and quick to offer the appropriate product at the right time.