Digital has transformed the way we live. In almost every walk of life, the smartphone elevates our experience, adding value and streamlining the way we do things.
Within retail, digital is transforming everything of the consumer experience. The consumer is now a digital shopper. The proliferation of mobile technologies combined with widespread Internet access has rapidly altered just about every aspect of our lives. Now, the Internet of Things (IoT) promises an even greater revolution.
Retail and IoT
Traditional retailers will have to increasingly cope with the shift of consumers to online retail. There is a good opportunity for retailers to employ IoT to help revive physical stores and improve a customer’s shopping experience. It is quite likely that the in-shop experience will act as that competitive differentiator.
With the advent of Internet of Things (IoT) and Internet readily available for all at affordable costs, technology has made an entry into various domains including in retail.
Reinventing the Store
E-commerce sites are moving fast to scale up in the market which has been predominantly driven by physical stores across the globe. Though the percentage of e-commerce sites are low compared to the physical stores, the pace at which it has been engaging customers has made the brick-and-mortar stores to re-look into their strategies. More and more brick-and-mortar retailers are looking at technology to improve their customer engagement, thereby improving their loyalty customers and in turn increasing their sales.
While developed countries are already looking at personalisation in advertising through cloud, developing nations are focusing on addressing energy management topics through sensors, crowd management at checkouts and also understanding the customer analytics in-store.
Many retailers struggle with how to fully capitalize on these IoT-enabled capabilities. Without a clear plan to connect the data to business results, it is hard to make a case for investment.
The IoT has already started working its way into retail stores, and technologies will continue to disrupt the traditional retail process in the coming years.
– Consider beacons, devices that retailers use to automatically send notifications and discounts directly to shoppers’ smartphones when they enter a store.
– Digital Signage: These signs push ads and price changes to stores in real-time, which creates target sales for consumers.
– Smart mirrors, for example, which enhances the shopping experience and
offers added convenience for shoppers by not forcing them to travel to and from the fitting room.
– Smart shelves, meanwhile, automatically monitor inventory in stores and notify the manager when an item is running low. Mistakes and human error in this process can lead to an oversupply or, worse, a shortage of key items in stores.
The key focus areas for any retailers is to improve customer experience, thereby increasing sales and loyalty on one hand and decreasing costs by increasing operational efficiency and cut losses on the other hand.
Challenges in adopting IOT for retail companies
Missing standards across platforms and solutions: In IoT make it one of the most fragmented solutions in the market. With big players like Google, Amazon, Microsoft, Bosch and General Electric either open sourcing some of their main platforms or by standardizing their offerings through Consortiums, a good beginning to addressing of standardization issues are being seen.
Software adoption through mobile apps and computers: The Internet of Things is forcing customers to use their mobiles or computers more and more. But this comes with a challenge that the user interface needs to cater to a variety of users – on one hand, people who are internet savvy and can use apps or websites easily through a flip of their fingers, while on the other hand, people who have just started using smart phones and cannot easily understand complex operations on the phone or computers. To easily cater to all the portfolio of people is a big challenge.
Device diversity: The western world is more or less filled with mid-high to high end phones while developing countries like India has ‘people’ mobile phones with wide device diversity. Some customers been mid- low end phones with 1 GB RAM and 1.2 GHz processor while others come in with a high-end phones with 6 GB RAM and 2.4 GHz Octacore processors, which means that the software needs to be adaptable to a wide range of phones.
Infrastructure: Infrastructure requirements include availability of internet for connectivity, availability of the required hardware components for the solutions like Bluetooth beacons, smart devices, smart and high performance servers, cloud connectivity and infrastructure etc. These can also vary based on the kind of place where it is implemented in (developed, developing, emerging etc.).
Security and Privacy: With lots of players in the market for solutions, including many startups and many organizations coming from a diverse background without relevant experience in IoT, focus on cyber security is a critical factor for connected solutions. Security and Data Privacy protection plays a major role in the new connected world.
Training: Retail community needs to invest in training and inspiring their sales team. Nothing compares to a retail experience.
Statistics Indian Retail
India’s retail market is expected to nearly double to US $1 trillion by 2020 from US $600 billion in 2015, driven by income growth, urbanization and attitudinal shifts. While the overall retail market is expected to grow at 12 per cent per annum, modern trade would expand twice as fast at 20 per cent per annum and traditional trade at 10 per cent.
India is expected to become the world’s fastest growing e-commerce market, driven by robust investment in the sector and rapid increase in the number of Internet users. Various agencies have high expectations from the growth of Indian e-commerce markets. Indian e-commerce sales are expected to reach US $120 billion! by 2020 from US $30 billion in FY2016. Further, India’s e-commerce market is expected to reach US$ 220 billion in terms of gross merchandise value (GMV) and 530 million shoppers by 2025, led by faster speeds on reliable telecom networks, faster adoption of online services and better variety as well as convenience.
The Internet of Things (IoT) is viewed as a major driver of the third Industrial Revolution. There is no question that the connectivity of “things” will only continue to affect how businesses run in the future.
E-commerce is expanding steadily in the country. Customers have anever increasing choice of products at the lowest rates. E-commerce is probably creating the biggest revolution in the retail industry, and this trend would continue in the years to come. Retailers should leverage the digital retail channels (e-commerce), which would enable them to spend less money on real estate while reaching out to more customers in Tier II and Tier III cities.
Retailers have to work together to ensure better prospects for the overall retail industry, while generating new benefits for their customers. If you think IoT is in the far-off distance, think again. The retail industry is beginning to make serious moves toward IoT innovation and this will only continue to grow in the future.