Retail takes the IoT route

Customer engagement has assumed a level of significance like never before and the retail industry is undoubtedly the closest to the end users. IoT (Internet of Things) implementations are, in fact, helping link the customer, the store and the back end into a single connected unit. The key to successful implementation of IoT in retail (and in any other sector) is to connect the dots to form a holistic, single unit which cuts across the value chain and retains the customer at its heart.

Retail companies that have ridden the IoT wave have seen better engagement, reduced costs and improved operating efficiencies. Those who make sense of voluminous data generated by customers and route it back to their communication, engagement, logistics and supply chain decisions definitely stand a better chance of capturing customer loyalty.

Communication: Your neighbours’ and nearby communities’ purchase behaviours could soon affect the ads you are exposed to. Geospatial analytics is slowly picking up to target advertisements more effectively and to enhance chances of clicks. Finding a strong correlation between local weather and e-commerce, WeatherFit helps retailers decide which ads to place depending on weather conditions.

Product displays and promotions: Smart tags, smart shelves and digital displays are fast becoming near-mainstream in modern day retail outlets. A first-of-its-kind memory mirrors – which use hand gestures, photo and video feeds to help customers decide from among a variety of merchandise they have tried on is also gaining momentum.

Supply chain and logistics: Powershelving employed by select retail stores is allowing decision makers to adjust prices better and in efficient stock management.

RFID (radio frequency identification) implementation across its stores worldwide has helped fashion major Zara with item-level tracking and replenishment and drastically reduce costs of stock-taking and reporting. Use of sensors while transporting perishables is also allowing retailers to maintain desirable product freshness.

Security: A combination of RFID, smart shelves and powerful cameras help retailers reduce shrinkage / pilferage and fraud. Four years ago, India topped the list of countries with the maximum retail theft. Thanks to the expansion of organised retail and implementation of security technologies, we have been able to reduce retail shrinkage.

Know your customer: One of the biggest challenges that brick-and-mortar retailers deal with is getting to understand the buying behaviour of their customers. Unlike their online counterparts, the details they have about their customers are sparse.

IoT, with the help of the ubiquitous smartphone, is going to change that. Using magnetometer signatures hidden within your smartphone, retailers will track not only your behaviour within the store and the frequency of your store visits but over a period of time build a personalised portfolio of product to suit your individual tastes

Wastage: Wastage is a massive problem both in organised and unorganised retail. Every day thousands of tonnes of produce are thrown away due to spoilage. IoT with its sensors and deep data analytics will help reduce wastage along the life-cycle, starting from transportation to storage, helping manage inventory so that older produce goes off the shelf first. This will extend to letting the farmers know at what stage of ripening produce be dispatched so that it gets on to shelves just in time for purchase. Currently this call is being made based on the judgement of experienced farmers, which has a significant margin of error.

IoT implementation has the potential to personalise customer experience and enhance the quality of buyer-seller interactions.

The convergence of the physical and digital world is indeed the future of retail. However, the focus of retailers must be to pick and choose those technologies that would help them engage their audience in a more holistic manner to deliver superlative customer experience.

(Shekhar Sanyal is the Country Head and Director of Institution of Engineering and Technology, India)

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