The great disruptor – maybe the greatest in our time – is now more than just an emerging trend. The sci-fi sounding Internet of Things (aka the IoT) is now a reality that is already transforming almost every aspect of daily life – from home security to healthcare. It promises to usher in a “golden age” of shopping for empowered consumers. And it offers savvy retailers – who get in front of this wave early – an unprecedented opportunity for customer engagement, brand differentiation, and new revenue.
What’s Happening Now Is Just the Beginning of the Internet of Things
Mobile opened the door to the connected world. Wearables, like fitness trackers and smart watches, have helped consumers take the next step. The number of wearable devices in use is projected to double this year, connecting millions of wearers with the web, with each other, and with sources of professional services – like healthcare providers and physical trainers. Web-connected home management products like Google Nest and Google PowerMeter have joined wearables on the IoT, regulating and securing homes worldwide. And smart appliances like refrigerators that compile shopping lists are coming to market. By 2020, as many as 30 billion smart devices will be connected to and communicating on the Internet of Things.
Retailing Will Become a Data-Driven Business
Retailing will feel the impact of the IoT perhaps more than any other industry and that impact will be more transformative and challenging than e-commerce. Everything from the supply chain to inventory management to the in-store experience is poised for change. Some trend watchers predict that the physical store itself is set for reinvention. As leaders in construction management, we’re keeping an eye on that aspect of the IoT.
Smart shelves that report inventory levels, packaging that monitors freshness and shopping carts that navigate store aisles sound dazzling, but the major impact of the IoT will be the tsunami of data generated. To succeed in the new world of the IoT, retailers will need to mine this information effectively. Those who do will be able to engage customers and power their brands at new levels. Retailing will become primarily a data-driven business.
Four Big Retail Changes from the Internet of Things in 2016
A recent article from Forbes.com suggests four major changes we can expect from the IoT this year:
1. Enhanced Customer Experience: Individual profiles will allow retailers to offer shoppers customized offers, rewards and suggestions.
2. Optimized Store Operations: Sensors, beacons, and cameras will help tame traffic flow and eliminate bottlenecks.
3. Improved Inventory: Retailers will know in real-time what items are underperforming and which ones are trending.
4. New Revenue Opportunities: At-risk situations such as long checkout lines, low inventory or understaffed areas can be remedied in real-time, saving sales.
Tapping into the Power of the Internet of Things: What Smart Retailers Are Doing
Leading management consultants like Accenture and others have been focused on the IoT for some time now. Their retailing clients are advised to begin by developing strategic teams to understand current cross-organizational work flow – both front and back office, while investigating emerging IoT solutions, including data gathering techniques and analytics platforms. Cognitive systems, like IBM’s Watson, have emerged and more are on the way to meet the needs of this next phase of the information age.
Welcome to 2016 and the next chapter in retailing. It’s going to be an exciting ride.
