IoT in Retail: driving a new customer experience
E-commerce on one side and classic commerce on the other: welcome to the early 20's where there is a gap between two clustered visions of retail. Today, there is no barrier between these two models. They complement each other in an omnichannel logic : digital pure-players, including Amazon, are taking the retail turn and traditional retailers are transforming their shops entirely.
Connected store, augmented salesman, sensory experience, showroom... stores are not conventional anymore. To differentiate themselves, they rely on new technologies capable of collecting data to better serve their customers. Welcome to the world of the Internet of Things (IoT ).
IoT, the new digital disruption lever for retailers
55%. It is the proportion of retailers who will be interested in the deployment of IoT in the next 3 years according to a study conducted by BRP Consulting. This trend illustrates the shift made to make data a decisive competitive advantage. Today, less than 10% of purchases are made online. Therefore the place of the store is central. But they have to reinvent themselves to be really effective and that's where IoT can make the difference .
That's what Walgreens does in the US. This distributor has large refrigerated units that contain drinks and fresh products in all its stores. The customer sees through the glass, opens the door and uses.
The novelty is that in some outlets, the doors of refrigerators are now digitized based on IoT technologies. The glass is replaced by a screen on which the products in the refrigerator are displayed and so are advertising banners targeting customers.
Cameras are able to differentiate customer profiles. A 15-year-old teenager will see a different advertisement than an woman or a senior.
Challenges raised by the development of the IoT
For retailers, IoT allows a better understanding and a more effective follow-up of the customer journey . Inventory management is optimized and the supply chain is streamlined (product returns, shipments, reduced risk of theft, etc.).
For customers, these innovations are time-saving: they know where to look for their products and benefit from personalized recommendations and advice. It is also a way to build customer loyalty by adapting to their real needs.
If IoT is still in its infancy, its development is exponential. It is important for retailers to know the ins and outs of it.
The 5G mobile network will facilitate the deployment of IoT. The latency will be close to zero, the flow increased and the shareable volume of data more important. But it will still take a few years before 5G is democratized.
Connected objects all have their own technology. Interoperability is therefore a crucial issue: how to make all these objects communicate when there are no absolute standard? It needs to come from a common regulation and it will take some time.
We cannot not talk about the IoT without mentioning security. In a RGPD environment, manufacturers and users of connected objects will have to be mindful of attacks and data theft and know how to avoid it.
In the end, data management is strategic. With the IoT, unprecedented volumes of data will have to be stored and secured, and the traditional cloud as we know it could present some limits. This is where edge and fog computing enter the picture.