Retailers in the Asia-Pacific region are fast adopting Internet of Things (IoT), artificial intelligence and automation strategies to boost growth. They are moving from brick-and-mortar stores to online channels, leading to synergies between the physical and online platforms.
According to a report, the Indian Internet of Things (IoT) market is expected to grow to US $15 billion with 2.7 billion units by 2020 from the current US $5.6 billion and 200 million connected units.
Taking a note of the situation, Bosch India is also driving the transition to the IoT era by drawing on its innovations. With technological supremacy being built on the foundation of connectivity, Bosch has been developing local solutions that specifically cater to the needs of the Indian customer.
Elaborating on the same, Head IoT Business, Bosch India, Uday Prabhu told Indiaretailing Bureau, “Our focus predominantly is looking at solutions which are related to personalisation. Personalisation topics are related to the revenue side of retail. For example: How can I provide the right product at right price to the loyal customers or how can I help them find the right product in the store or how can I target the right people for advertisements? So personalised IoT is one of our key solutions.”
He further added, “In addition, we have multiple horizontal technologies like sensors for cold storage monitoring, freshness monitoring and also in the space of energy analytics which are on the cost side of things like how can retail cost be much optimised and give enough information that is able to help them to get a better profitability.”
As the Omnichannel approach picks up steam, implementing the right visibility technologies from the warehouse to the storefront is instrumental in fulfilling orders, scheduling for fast deliveries, and personalizing the experience for different shoppers.
Personalization in retail helps in generating revenue. Prabhu explained this further by saying, “Every person is a different animal. Preferences are vastly different and the moment each person is treated for their specific taste then the customer experience goes up significantly. So the customer walks into a shop and the shop immediately transforms itself into all the likes that the customer has, so obviously the experience enhances. Today, the customer is probably searching for things but maybe next time when they enter the retail outlet and these things will be already there. So the experience counts a lot in retail and if solutions are designed around this then the retailer stands out as a clear winner.”
He further added, “Using IoT, retailers will also be able to make the store experience interesting. They will have the option to create smart shopping list so the phone will guide the customer to the entire store, telling them where to buy and what. So these are some of the solutions in personalisation where each individual is treated for the kind of preference he has and the technology is going to take a note of all the products in the store to pick the right ones and pass it on and if it is a loyal customer then they will get rewarded the more, so that they will always come back for more. So that is how the personalisation works.”
Will IoT be Successful in India?
Since retail is all about the shopping experience, there is a need to know how customers shop, spend money and time. If retailers want to understand all of this as per their specific business models, they need digital and digital is only possible by IoT.
Despite so many advantages, retailers are double-minded on implementing IoT in retail.
“There are two sides of IoT – one is the cost side and other is the revenue side. The cost side is something that requires a lot of return on investment discussions, so the amount of money retailers spend in IoT should commensurate with what kind of returns retailers are getting on it. So there I think there is a lot of resistance, therefore any solution that works on the cost side has to be thought through properly in terms of the expense that it adds to the store and therefore the retailer is right in saying that why should I pay more and where is the benefit,” Prabhu said elaborating on retailers point of view.
He further added, “Whereas the personalisation topic is directly linked to revenue and the revenue increases only if the retailers get paid. So here the investments are higher. Depending on whether retailers play on the cost side or the revenue side the happiness or the sadness quotient varies proportionally.” revealed Prabhu.
At present, retailers are trying to find the right spot and the right model that can exist between two aspects – one which has the technology and one which is looking at profitability – and once they find that sweet spot, the success will definitely come.
“We are at point where the hype about IOT is coming to close and the reality is dawning and the retailers are getting very smart about the business model, the solution, the architecture and how much of it should be passed on as a cost to the customer and I feel in next three to five years, we will see a spurt of intelligent topics coming into the retail industry,” concluded Prabhu.