The Internet of Things is Changing Retail For the Better

The Internet of Things is Changing Retail For the Better

The Internet of Things is Changing Retail For the Better

A customer sees a trendy blouse online but isn’t sure how it will look on their petite frame. They save the shirt in their account. A few days later, they walk into the store but all the customer service representatives are busy. No problem! Their smartphone just buzzed with a special alert, letting them know their saved item is in stock, and would they like directions to find it? Thanks to the Internet of Things (IoT), retailers can deliver this level of service to their customers. IoT is improving brand relationships with customers, providing new data streams, and refining the behind-the-scenes workflow.


What is IoT?

Essentially, the Internet of Things creates a network using embedded sensor technology paired with cloud computing and artificial intelligence to provide insights into the physical world. The network allows users to track and analyze movement, traffic fluctuations, and environmental changes. Retail applies different IoT technology depending on a company’s goals. The tools below represent popular additions to the retail space.


Radio Frequency Identification

Radio frequency identification (RFID) tracking chips are improving real-time inventory tracking. Initially viewed as a supply-chain technology, the retail space is quickly onboarding RFID. Why? Conducting an inventory takes less time and improves accuracy by 32%. When a product uses RFID labels, retailers can scan an inventory rack and know how many sizes of each product sit on that rack. Less time is wasted counting and restocking product. RFID can integrate with a brand’s mobile shopping app, guaranteeing accuracy when a website claims a product is in-stock at the store.

Brands like Macy’s and Zara use RFID to boost their sales and profitability. The good news is RFID pricing is falling, now hovering around 10 cents a tag depending on the application. Now that tagging products with the technology less expensive, it’s likely we’ll see more retailers adopting RFID.


Proximity-sensing technology

Let’s go back to the introductory example. The customer received the push alert about their saved blouse because that brand used in-store proximity sensing or beacon technology. This technology is most powerful when paired with the retailer’s mobile application. With geo-locating IoT in place, the retailers can send alerts to a customer’s smartphone. Alerts can be a special deal based on their proximity to an item or, as with the example, notify the customer their saved product is in stock. A geo-locating system can provide customers directions to where a product is located in the store. That same location awareness technology lets consumers call for customer service assistant wherever they are standing in the store.

For examples of proximity sensing IoT tech, see Apple’s iBeacon technology which uses Bluetooth to ping off a user’s device or Visible Light Communication (VLC) technology, which applies light streams to transmit data.


Traffic Monitoring

IoT captures intelligence on customer movement through a space. Beacons, wifi tracking, and video monitoring can supply this data. Retailer Hugo Boss uses heat sensors in its clothing stores to monitor consumer patterns. Whatever the monitoring format, when paired with cloud computing and artificial intelligence (AI), retailers learn where consumers dwell on products, how much foot traffic a particular area gets, and if customers follow any patterns while moving around the space. This traffic intelligence allows retailers to place product appropriately inside the location. Some retailers use traffic data to adjust staffing for prime time shopping hours. Large-scale retail centers apply that same information to adjust leasing rates based on traffic or create digital marketing campaigns based on where customers are located.


Augmented and virtual reality

Swedish home retailer Ikea is experimenting with virtual reality. Customers will be able to design a space with Ikea’s three kitchen styles, swap colors, and change their perspective to see how others would view the space. The retailer also plans to launch an augmented reality app to try the furniture in the client’s home. Meanwhile, Ralph Lauren’s smart mirrors allow clients to try on different clothing virtually before finding ideal products in the store. And they’re not the only clothing retailer bringing the tech into the dressing room: Rebecca Minkoff installed smart mirrors at two locations. Augmented and virtual reality technology is poised to change how consumers purchase goods and services.


No Checkout Lines

Another impressive IoT sensor tech is brought to us by Amazon. At its Seattle prototype grocery store Amazon Go, customers purchase goods without waiting in a checkout line. While Amazon isn’t being specific about the tech powering the innovative concept, Amazon has said it uses a network of sensors to detect the items consumers pick up and place in their cart. The technology keeps a running tally of purchases, and on their way out, the customer’s Amazon account is automatically charged. Consumers receive a receipt on their app.


The Internet of Things is helping brands create more efficient operations while enhancing the customer experience. Even with innovations in sensor technology, virtual reality, and data collection, the retail tech space remains ripe for development. Where do you see the future of IoT in retail heading?



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