Transformation of Retail Business with IOT
Recently, IOT has gained a lot of popularity. It is used by many businessmen. It is used in many areas. In industry, agriculture, and retail. In this article, you will find out why many business people prefer IOT. You will find out how IOT can help in business. You will find out what are the advantages of IOT.
IOT in business. General information
The IOT platform is designed to ensure the operation of the Internet of Things system (so that end devices are connected to the cloud). This platform provides remote access to technology through the cloud. The platform works with the help of special interfaces, algorithms, protocols for storing and analyzing the information required in each specific case.
In fact, judging by the statistics, the IoT technological solution has moved from the experimental stage. It plays a vital role in digital transformation and adds value to businesses. The continued growth of this industry will be the driving force behind digitalization in all areas of business. Including IoT use cases in retail.
Things are changing rapidly, not only for consumers but also for businesses. Thus, according to consultants from McKinsey, the potential economic impact of IoT on the retail environment will be from $410 billion to $1.2 trillion per year by 2025.
Retail IoT can reduce inventory errors, optimize supply chain management and reduce labor costs. IoT lets you know your customers. Allows you to find out what they are doing, helps to understand their behavior and buying habits. Provides the ability to use this information. In order to organize the interaction with the client at a higher level.
In retail, experts now rely heavily on customer preference data. It is thanks to this data that they increase sales. The Internet of Things helps them in this. There are several aspects in which Iot penetrates retail. Let’s take a look at them.
Iot use cases in retail
A queue may form at the checkout. Customers are often discouraged by the line at the checkout. And the store owner is not profitable to maintain a large staff of cashiers. If the goods have special sensors, that will be activated at the right time. For example, when a customer leaves a store. The system will count purchases and deduct the required amount from the client’s account. This will help keep costs down. And besides, it will make the client happier. This will lead to tremendous savings for the seller. The profit will be calculated in hundreds of millions of dollars.
Amazon already uses similar technology in its Amazon Go stores without cashiers. According to the company, the revenue in such stores is one and a half times higher than in ordinary points of sale.
Retail space is not optimized for customer behavior. Using the pass analysis software, some conclusions can be drawn. For example, discover where most customers spend most of their time. There you can place the goods that they need the most. In the most conspicuous place. And then supplement the shelves with impulsive goods.
Beacons are small Bluetooth devices that send alerts to smartphones. Depending on the location. Customers can receive discounts, special offers, or other reminders. In case they are located next to the store. To do this, the client needs to install the store application. For example, the American network Macy’s has been using beacons across the country since 2014.
Improving supply chain management
Although retailers are already tracking products without the help of the IoT. Their information is rather limited. More accurate data is possible with different sensors. For example, monitoring the temperature at which the goods are stored, or how long they are spent on the way. This data will help to improve the quality of transportation and also to avoid significant losses of perishable goods. The improvements will certainly be noticed by customers. They are more likely to return to the store.
In stores, the staff is now working on the shelves. The staff monitors the availability of goods and more. This is time-consuming and costly. Smart shelves can automate this task. In addition, they can detect potential theft.
Smart shelves can measure the weight of the item. And also use sensors and readers to scan products both on display cases and on warehouse shelves. It will inform the seller about the availability of the items. It can also communicate with the consumers.
Pros of the Internet of Things for a commerce business
- Reducing the costs of enterprises. The Internet of Things (IoT) offers several ways to reduce business costs;
- Effective inventory management. Enterprises have the option to choose IoT-based inventory management;
- Lower maintenance cost. IoT predictive service technology helps reduce costs for the enterprise;
- Optimized energy use. You can install a smart thermostat in an organization building. As a result, energy consumption is reduced;
- Improved user experience. Better understanding allows companies to provide each client with a more personalized experience.
- Effective marketing strategies. Companies get a complete picture of their customer’s preferences. Thus, they create programs that generate income and better target their target audience;
- Increased business security. It is recommended for all businesses to install smart security devices;
- Statistics in real-time. Statistics help you achieve your business goals. Timely statistics are essential for a business;
- Increased productivity. Faster deliveries. With improved information, you can quickly improve your business performance and meet demand.
Analysts predict a very close merger with trading in the IOT sphere in 5-10 years. First in the developed part of the planet. Then the rest of the world.
As you can see, IOT is very useful for business. It is not difficult. It has many benefits. It is not at all costly for the seller. It can increase profits tenfold.
There are many ways in which IOT and the retail industry interact. Sensors. Robots. Systems. Analysis. All of this together has many benefits. Increased productivity. Faster deliveries. Real-time statistics. Increased business security. Help in creating effective marketing strategies. Reduced costs for businesses.
Those companies that want to keep up with the times will implement IOT. The future belongs to automated systems. They are very profitable, therefore they have become a part of the sales field.
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