A retail journey
To remain relevant in an omnichannel retailing world, brands must evolve operations to satisfy the way people shop. Armed with the Internet of Things (IoT), retailers position themselves to leverage the necessary operations to engage digitally savvy customers in an ever-changing business landscape.
Simply stated, IoT is a concept that connects devices via web-based networks, allowing them to share data. As retailers inch closer to the holy grail of a seamless shopping experience, IoT can break down the many silos that still exist between business processes and, most importantly, channels. The result: an open conduit that drives communications internally within lines of business, as well as externally with shoppers.
A fairly new concept, IoT is already making an impression on retailers.
“We are in the era of the connected retailer,” said Gary Marshall, director of operations at Lakeland, a British kitchenware retailer. “The retail community has embraced IoT as it allows us to have complete visibility throughout our ecosystem.”
Industry-wide interest and overall curiosity is definitely contributing to the increasing number of “connected things” popping up across the landscape. For example, Gartner predicted that there will be 5.5 million connected devices in use this year. And the momentum is showing no sign of slowing, as this volume will reach 20.8 billion devices by 2020.
For retailers, the “flavor” of devices run the gamut, from mobile point-of-sale, in-store kiosks and interactive displays to tablets, scanners, wireless printers and radio frequency identification tags. Even more complex solutions, such as beacons, sensors and related devices, are providing end-to-end visibility throughout the enterprise.
At the heart of any successful IoT project, however, is not the hardware. Instead, it is the large volume of big data — and nuggets of customer-specific information — that these devices produce.
“IoT can solve business problems, including reducing friction and driving more convenience for the omnichannel shopper,” said Joe Jensen, VP and general manager of the retail solutions division at Intel. “To make these business process changes, however, retailers must leverage the data generated from devices and use it to make decisions that will keep them relevant among connected shoppers.”
Challenges: While IoT remains high on retailers’ to-do lists, traction remains slow due to a variety of challenges. The biggest hurdle to date is confusion about exactly what technology is involved.
“Retailers still don’t have a strong understanding of what the technology is,” said Steve Rowan, managing partner, Retail Systems Research. “They also don’t have a clear definition of what [IoT] technologies they want, or what they hope to accomplish with them.”
Another struggle is that retailers remain focused on devices, not the data flowing through them. Dropping technology into stores as eye candy will not help the shopper’s experience, according to Jensen.
“The key to being effective is to support programs that solve a business need and create a frictionless, relevant shopping experience,” Jensen said. “If they can’t, shoppers will stop visiting.”
To get off on the right foot, retailers should establish a solid IoT foundation. It might seem like a daunting undertaking, but the following checklist can help streamline the task:
• Get C-Suite Buy-In.
IoT can help keep brands relevant, and accelerate growth. However, this requires adopting a new, innovative culture across the brand. This starts with commitment from c-level executives.
Leadership teams, however, may find it difficult to get their arms around an IoT strategy, cautioned Accenture Strategy in its report, “The Internet of Things: Revolutionizing the Retail Industry.”
“CIOs in particular may be hard-pressed to accommodate entirely new classes of devices into their already complex IT infrastructures,” the report said. “But it’s important for retailers to consider taking steps now to lay a foundation for IoT support later.”
• Define Business Needs.
With the proper leadership and mind-set in place, brands are ready to define their pain-points and how IoT can improve operations and impact customers’ shopping needs. This also requires brands to align potential IoT solutions, as well as the data they generate, with their business strategies.
“We are in an era that requires a data-centric business approach,” Jensen said. “Those companies that ignore the trend, or fail to use information to connect with customers, are not going to survive.”
• Adopt the Ideal Infrastructure.
Succeeding at IoT is not about adding the latest “shiny new toy.” Rather, retailers should consider solutions that foster intimacy among its connected customers.
This requires IT teams to sit with brand leaders, as well as lines of business, to determine IoT’s benefits, company business goals and the specific devices that can help them achieve these goals.
Whether this is through RFID to track inventory, Bluetooth Low Energy that triggers beacons to deliver personalized messages or mobile tablets that can bridge the in-store omnichannel experience, all devices in the IoT toolbox must adhere to a business mission to accelerate the consumer shopping experience.
• Add an Analytics Layer.
IoT devices collect so much customer-specific data, it has never been easier to understand customer demand patterns. By adding an analytics layer, retailers are closer than ever to deeply understanding how customers are interacting with the brand.
Bottom Line: Accenture sums up the promise of the IoT succinctly, saying it offers retailers opportunities in three critical areas: customer experience, supply chain and new channels/revenue streams.
The IoT is quickly evolving, and ready to merge retailers’ online and offline customer experiences. By leveraging IoT solutions to complement business needs, retailers are better positioned to transform operations and engage digitally savvy customers.