The IoT Powerhouse: A Game Changer For Retail And CPG

It is hard to remember the world before the arrival of the Internet. Although it has been a little over two decades, we just cannot recall what it was like to scout for stores across the city and look through pages of catalogs. Faced with a limited choice of products and restricted availability, we would mostly pay what the price tag said, with little or no room to bargain. With the onset of the 90s, the world changed in more than one way, and the Internet played a huge role in shaping the world we reside in now. Most of us cannot put ourselves outside this habitat of connected ecosystem. Over time, we have only grown more accustomed to accessing hundreds of things, or information, with one device.

The world is heading toward a new reality. In a foreseeable future, shoppers can walk into a store with a system guiding them to items they have been looking for online, while also enabling them to virtually try out clothes or accessories in front of a smart mirror, or generating personalized coupons for in-store purchases. For retailers, too, using RFID and other sensors will ensure tracking goods throughout the supply chain, or monitoring quality and condition of perishable items. Stock-outs, damages, and nonperforming inventory are being managed for a seamless functioning of their core activity.

But if one thinks what is truly facilitating these technologies, the answer is quite simply IoT (Internet of Things). Not only is IoT behind helping businesses optimize store layouts, automate check-outs, and manage inventory, but it is also ensuring secure payments and replenishing store shelves by providing real-time inputs.

Driving Growth in Businesses with the Power of IoT

The future of retail looks bright with smart shopping carts, customer assistance robots, sensors that can track quality of perishable goods, and smart price tags that can change in real time based on changing trend and fluctuation in demand. Only by deploying IoT-enabled digital retail solutions in bricks-and-mortar outlets can retailers address the many demands of their consumers, while staying ahead of the curve. Shoppers today want an end-to-end connected experience in stores with smart infrastructure with physical products linked to a virtual reality system, which will constantly assist them. A leading ecommerce company has recently launched a prototype grocery store in Seattle which utilizes computer vision, deep learning algorithms, and sensors to automate the shopping process. The store concept has been revolutionary in leveraging geofencing technology and smartphones to streamline customer experience.

Without the connected ecosystem of IoT, retailers cannot improve communication with customers, nor boost operations and productivity. With smart retail data analytics, both in-store and out-store, however, retailers can manage customer metrics, and move them across the organization. But stores also need smart facilities like energy management and preventive maintenance of equipment which have not been adequately implemented so far. With global statistics showing that about 30% of total energy consumption and 60% of electricity consumption are spent on buildings, conservative measures become an imperative. By leveraging smart data, retailers are effectively controlling energy consumption of legacy HVAC systems, and making additional savings from each store individually.

Ironing out Issues in Supply Chain and Inventory Management

Globally, inventory distortion, which includes overstock, stock-outs, and shrinkage, costs retailers $1.1 trillion annually. In the US, shrinkage alone is setting retailers back by $42 billion every year, which amounts to 1.5 percent of total retail sales.

By deploying smart inventory management systems that is based on digital shelf, RFID chips, sensors and beacons, and robo-carts, physical assets can be directly synced with database servers. Additional technologies such as smart displays and high-resolution cameras combined with image analysis capabilities can further help enhance the control of retailers on goods on store shelves and in the back storage.

The Retail Revolution is Here

With 81% of retailers in America, APAC, Europe, and the Middle East indicating that they plan to invest in security sensors by 2021, consumers are in for a brand new retail experience.

IoT implementation will not just transform the shopping experience across every channel but also help make it seamless. In fact, to deliver high quality omni-channel experience, inventory accuracy (at least 90%) has been identified as one of the most critical factors. As for the retailer, it opens up more upsell and cross-sell opportunities than ever before. With artificial intelligence coming into the fold, purchase decisions will no longer be a one-way street and may, in fact, be driven by real-time personal data, historical preferences, and other factors that we are fascinated to speculate over.

IoT is undoubtedly shaping the future of retail, and propelling growth in several other domains like transportation, healthcare, and agriculture. It is also the stepping stone to transform cities into smart cities. While some argue that the growth of IoT devices has increased energy demands, benefits like better resource management far outweigh the few challenges of implementing it.