Driverless cars, smart homes, change rooms that can tell you how you'd look in that style but a different shade...Sound like a futuristic world reminiscent of the Jetson’s?
Well it's not; it's right here, right now courtesy of the "Internet of Things", and according to experts it's set to transform the world of retail - from the way we learn about products to the experience we have in store and how we choose to pay.
This is the Internet of Things and what it's tipped to offer.
The Internet of Things
For the past decade we've been hearing more and more about the Internet of Things and how our cars, homes and daily experiences are about to get a whole lot smarter. The truth is it's not that complicated, the Internet of Things is purely "things" connected by the "internet".
This now extends to sensors, mobile phones, beacons, televisions, appliances and even prototype cars that all communicate with each other gathering data and relaying information.
According to networking giant Cisco the Internet of Things industry will be worth $14.4 trillion for companies and industries worldwide in the next decade, driving profit up by 21%.
And its rise comes down to three important forces notes salesforce.com:
- Smartphones that "unchain internet access from the desktop"
- The Cloud that untethers information from fixed local networks and physical storage devices, and:
- Social Media, which allows the establishment of new communities and networks to exchange information.
IoT and retail
In the retail sector expenditure on the Internet of Things is set to hit $2.5 billion by 2020 according to Juniper Research with items like RFID tags, sensors and beacons among the hot ticket IoT implements.
A further report from Retail Systems Research indicates that 54% of retailers worldwide with above average growth said they believed the Internet of Things was poised to dramatically change the way companies do business in the next three years.
It will allow new channels of communication which will alter the retail landscape on a number of fronts...
Personalised shopper experience
At a time when bricks and mortar stores are seeking new ways to engage clientele, the Internet of Things is about "giving the customer something extra" according to Forbes.
Using devices like beacons, smartphones, smart change rooms and social media it will allow retailers to deliver a personalized, immersive shopping experience. This will occur via the data gathered from shoppers at point of sale, through beacon technology and courtesy of specialty sensors such as RFID tags which show what items are selling, when.
Already this collected information is being used in innovative ways to furnish shoppers with additional information that's akin to having a personal sales assistant in a sphere where service, education and entertainment meet.
Forbes notes German based liquor store BASF is using it as a virtual sommelier. Shoppers enter their wine preferences on a tablet connected to a digital shelf. Bottles with the features they prefer then light up, with additional information about the wine on offer.
The store can also track what items were picked up then put back on the shelf, providing insight into what may prevent consumers from committing to the final purchase.
Fuelling this personalised experience is the data required to deliver it, and the IoT takes care of that too. From the type of items loyal shoppers buy, to the way they make a purchase and the loyalty programs they join, this information feeds back into the retail data pit.
Combine this with tags that tell you when an item is picked up but put back, the types of products that lure people into the store and beacons telling you when a customer enters an outlet, retailers are gaining a better understanding what makes their consumer tick and tailoring the experience to suit.
Add into the mix topics trending on social media and you gain a solid idea of what's inspiring people to buy.
In Australia, Myer chief digital and data officer, Mark Cripsey, told Inside Retail data was allowing a more personal connection with customers.
“We are segmenting our customers in a way that is more specific than we’ve done in the past and obviously we use our data to look at how our actions are performing against those segments,” said Cripsey.
“I’ve seen a huge change in the way we use data, not just in the insights team but the whole business is using data to inform our decision-making.”
From point of sale apps that automatically update inventory in real time to RFID tags that track stock without staff input, the supply chain is doing away with stock taking and staff counting.
In 2003 RFID tags cost US$1 per unit, but the price today is 10c, allowing more and more retail stores to implement the technology and understand what stock is where and how well it sells.
Forbes notes that by the end of 2017 Macy's will have rolled out RFID tags across 100% of their stock, resulting in massive time and staff savings, along with increased accuracy.
That's not to mention the ease of accounting courtesy of integrations with Point of Sale software and the time saved on staff scheduling and customer relations.
The final word
Accenture Australia notes: "Retailers that take the lead in this space stand to gain an important advantage in an already competitive environment. Early adopters will be positioned to more quickly deliver IoT-enabled capabilities that can increase revenue, reduce costs and drive a differentiated brand experience”.
It's just a matter of when and how they choose to embrace the opportunity.