The connected consumer: IoT's impact on the future of retail

Have you walked into your favorite store and gotten a personalized notification 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 haven’t experienced this yet, no doubt you’re expecting it in the near future. More retailers are using the Internet of Things to connect with consumers just like this. It’s something that could revolutionize how consumers shop and what they expect from their favorite retailers.

Indeed, I’d say customer experience – or expectation – might be the driving force behind retailers using the IoT to create a smoother omnichannel experience for the connected consumer. Today’s consumers don’t want to find a different store online, on their phone and in their neighborhood. They want a consistent presence, with consistent service, every time. (With incentives to boot, of course.)

Data rules the retail roost

So, how are retailers using the IoT to create a better omnichannel experience for the connected consumer? I’d say there are two big ways. And they both come down to data.

Armed with the data-gathering prowess of the IoT, retailers are using technology products from vendors like SAS to pull together omnichannel analytics that shed light on their customers’ actions across a variety of platforms – mobile, social, etc. This approach can yield valuable insights on the macro and micro levels.

What kinds of insights? Imagine:

• Knowing when a connected consumer is searching for a competing product and being able to instantly text them an incentive to buy yours instead.
• Knowing when the customer is driving past your brick-and-mortar location and sending a coupon for an item they’ve recently looked at online.
• Knowing what true trade area demand is by blending online and offline sales with web and in-store traffic data for any given store.
• Knowing that the connected consumer in Export, PA, is – on average – only willing to spend a certain amount for a certain product so that you can adjust your price before it ever hits the stores.
  

Uniting data from the connected consumer

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

Technologies that make an impact

OK, so now companies have access to the IoT to learn about their customers and figure out smoother, cooler, better ways to serve them across channels. That’s awesome. But how do they go about putting those smart incentives and automated communications and personalization plans in place? There are a few technologies that can help. 

• WiFi, beacon and RFID technologies. Some say that by 2021, almost 80 percent of retailers will be able to customize the store visit for customers.² Why? Because RFID and beacon technologies will be able to tell them exactly where connected consumers and product inventory are in the 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 alerts of new products and sales right when they walk in the door. All without having to increase your sales staff.
• Near-real-time analytics. All retailers dream of getting a better handle on their market. But few are able to do it until the sales reports are in for the quarter. Using things like smart price tags³ can change that. Now, businesses can see in near-real time if a certain price point is working for its customer base and change it – automatically – if they need to lower or increase it to maximize sales. That’s a total game changer! No more failed launches or promotions – there’s always an opportunity to fix it and improve the chance of sale.
• Inventory transparency technology. One of the most annoying things in terms of customer experience is failed inventory – when a customer believes something is in stock, makes a trip to buy it, and finds out it isn’t there. New inventory technology like smart shelves⁴ can help by alerting personnel in real time when inventory is low. It’s just one more way to make sure the connected consumer is happy.
  

There are a lot of new technologies and ways to keep the connected consumer satisfied across various platforms. Businesses hope this will drive sales, and maybe even keep their brick-and-mortar shops in business. Indeed, the data and insights provided by the IoT can help retailers more firmly 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 – that know us best.

About the Author
Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. He works with the world’s largest technology brands exploring digital transformation and how it influences the enterprise. He is regularly cited in CIO.Com, CIO Review, CNBC and hundreds of other sites across the world. A five-time best-selling author, including Building Dragons: Digital Transformation in the Experience Economy, Newman is also a Forbes, Entrepreneur and Huffington Post contributor, and a graduate adjunct professor.

References
1. Internet of Things Will Revolutionize Retail.
2. Ibid.
3. The Internet of Things: Revolutionizing the Retail Industry.
4. Ibid.