The Connected Consumer: The Influence of IoT on the Future of Retail

Have you gone into your favorite store and got a personalized message on your phone with a coupon for something you buy every week? Or pulled up an app on your phone that tells you the exact location of a product you want to buy – and shows how many are on the shelf? If you have not yet experienced this, you will no doubt expect it in the near future. More retailers are using Internet of things to connect with consumers like this. It’s something that can revolutionize how consumers shop and what they expect from their favorite retailers.

In fact, I can say that customer experience – or expectation – may be the driving force behind retailers using IoT to create a smoother omnichannel experience for the connected consumer. Today’s consumers do not want to find another store online, on their phone and in their neighborhood. They want a smooth presence with consistent service every time. (Of course, with incentives to boot.)

Data regulates retail

So how do retailers feel using IoT to create a better omnichannel experience for the connected consumer? I would say that there are two major ways. And they both come down to data.

Armed with the data collection skill of IoT, retailers are using technology products from vendors like SAS to collect omnichannel analysis that shed light on their customers’ actions across different platforms – mobile, social, etc. This approach can provide valuable insights at the macro and micro levels.

What kind of insight? Imagine:

  • Knowing when a connected consumer is looking for a competing product and could instantly send them an incentive to buy yours instead.
  • Knowing when the customer is driving past your brick and mortar location and sending a coupon to an item they have recently looked online.
  • Knowing what the true demand for commerce is by mixing online and offline sales with web and store traffic data for a given store.
  • Knowing that the connected consumer in Export, PA – on average, is only willing to spend a certain amount on a particular product so you can adjust your price before it ever hits the stores.

To reconcile data from the connected consumer

The kind of data that bridges between platforms is not just nice to have. It’s data that can help close a sale and keep businesses going – or, more likely, ahead of the pack. In fact, 78 percent of retailers1 says it is either important or “business critical” to integrate their online and store experiences to create a solid omnichannel experience for their connected customers. The analytics performed on this data can help them better align inventory – keeping waste low and the connected consumer satisfied. It can determine which campaigns were successful right down to the moment the customer engaged and / or acted on the offer. Basically, it takes the “gut and the guesswork” out of retail and uses every piece of multi-channel data instead.

Technologies that have influence

OK, so now companies have access to IoT to learn about their customers and find smoother, cooler and better ways to service them across channels. It is fantastic. But how do they go about getting these smart incentives and automated communication and personalization plans in place? There are a few technologies that can help.

  • Wi-Fi, beacon and RFID technologies. Some say that by 2021, almost 80 percent of retailers will be able to customize store visits to customers.2 Why? because RFID and beacon technologies will be able to tell them exactly where connected consumers and product inventory are in store! Imagine having a treasure trove of data – what someone eats, what size they wear, their favorite brand – and being able to entice them with warnings about new products and sales right when they walk in the door. All without having to increase your sales staff.
  • Almost real-time analysis. All retailers dream of getting a better grip on their market. But few are able to do so until sales reports are in the quarter. Using things like smart price tags3 can change that. Now, companies can see in real-time whether a particular price point is working for their customer base and change it – automatically – if they need to lower or increase it to maximize sales. It’s a total game changer! No more unsuccessful launches or campaigns – there is always an opportunity to fix it and improve the chance of sales.
  • Inventory transparency technology. One of the most annoying things in terms of customer experience is the lack of inventory – when a customer thinks something is in stock, take a turn to buy it and find that it’s not there. New storage technology such as smart shelves4 can help by alerting staff in real time when inventory is low. This is just one way to ensure that the connected consumer is satisfied.

There are many new technologies and ways to keep the connected consumer satisfied across different platforms. Companies are hoping this will lead to sales, and maybe even keep their brick and mortar stores in business. In fact, data and insights from IoT can help retailers more to establish their brand and extract even greater customer loyalty if used well. After all, as humans, we tend to be loyal to the people – and companies – who know us best.

About the author
Daniel Newman is the principal analyst for Futurum Research and CEO of Broadsuite Media Group. He works with the world’s largest technology brands exploring digital transformation and how it affects the business. He is regularly cited in CIO.Com, CIO Review, CNBC and hundreds of other sites around the world. Newman is a five-time best-selling author, including Building Dragons: Digital Transformation in the Experience Economy, and is also a contributor to Forbes, entrepreneur and the Huffington Post, and a graduate professor.

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