Tech Bytes: Three ways IoT will transform retail

The Internet of Things (IoT) is one of the hottest topics in retail technology. While there has been a lot of talk about IoT’s status as a game-changer for retail, there has been less discussion on exactly how it will drive industry transformation.



Here are three specific ways IoT will bring about a new era in retail operations.



Automatic shopping

One of the biggest shifts IoT will spur in the retail landscape is a move toward automatic shopping. Appliance manufacturers are already beginning to release “smart” machines such as printers that can automatically place orders for ink when levels run low.



In addition, “smart fridges” that notify consumers when perishables run out or expire, as well as connected devices that allow instant in-home ordering of specific products such as the Amazon Dash button, remove much of the conscious choice and thought from shopping.



As more devices become connected to the Internet, more consumer purchases will become mostly or entirely automated. This will lead to an increase in participation in direct-to-consumer retail, as well as fewer opportunities to attract or convert customers (more on that below).



More data in less time

The spread of IoT means consumers are using more connected devices in the course of their daily lives than ever before. In addition to smart appliances and instant buying buttons, this includes wearable fitness devices that record biomedical data and connected cars that transmit when and where consumers are traveling.



Even more items that consumers use in their daily lives will become connected in the coming years. This will create a whole new stream of real-time data that gives greater insight into the personal details of customer lives than retailers could have imagined even a few short years ago.



To take advantage of this new barrage of constantly growing consumer information, retailers will have to invest in bigger and better systems for collecting, sorting, storing and analyzing “Big Data.” There are also privacy issues, especially regarding personal health data such as that generated by fitness wearables, which must be adequately addressed.



You think it’s competitive now…

As mentioned above, the evolution of IoT into an everyday part of consumers’ lives will result in many shopping decisions becoming automated. Rather than browsing in a store or online, consumers will simply press a button, speak a command, or even just wait for a smart device to place orders for them.



As a result, the competition for customers will take on a new urgency. Once a customer can simply buy a product from their home without having to think about it, the odds of converting them from a rival retailer become much smaller.



This gives a huge advantage to Amazon, which sells a vast assortment of competitively priced goods, has a sophisticated direct-to-consumer fulfillment infrastructure, and already has a sizable built-in user base for its Dash and Alexa IoT-based shopping devices.



In addition, this will give manufacturers and wholesalers more incentive to directly sell goods to consumers through their own connected devices. Stores will still play a crucial role in retail, but the ability to quickly fill an IoT order from a local store will be of equal or greater importance than having enticing merchandising.