Wednesday, May 10, 2017
Retailers continue to embrace the Internet of Things. An estimated 70 percent of sellers plan on making major investments in IoT technology within the the next four years, according to recent research from the business intelligence firm Zebra. For those familiar with the advanced connected devices that constitute the IoT, this industry-wide enthusiasm for such fixtures is unsurprising. This technology carries transformative powers, as many retailers have already realized.
Shoppers equipped with mobile devices form the foundation of the IoT. An estimated 5.2 billion consumer IoT fixtures are expected to connect to the internet this year, according to Gartner. Enterprises account for the remainder of the devices and are on pace to adopt just over 3 billion in 2017. Retailers are of course concerned with both segments, as most look to connect with customers via mobile campaigns while also integrating enterprise IoT technology into backend workflows.
Strengthening customer connections
Approximately 77 percent of American adults own smartphones, according to data from Pew Research Center. Of these device users, more than two-thirds have downloaded applications. Together, these figures encapsulate the continued crystallization of mobile technology, a major concern for retailers of all kinds. Most have attempted to bank on this new state of affairs by rolling out exciting customer application experiences, to varying degrees of success.
Last year, the technology research group Arc From Applause used customer ratings data to determine the highest quality mobile retail applications. Discount giant Groupon nabbed the top spot, registering an average user score of 83 out of 100. One Kings Lane, a New York City-based home decor company, placed second while vintage-inspired clothes seller Mod Cloth took third. What set these mobile portals apart from the rest? According to Arc, these retailers nail the mobile shopping experience, offering easy-to-navigate interfaces that make the experience enjoyable.
That said, many retailers have moved on to another arena: The social media realm. Nearly 70 percent of American adults maintain such accounts, according to Pew. While timeline-based buying methods failed to take hold, sellers still leverage corporate social accounts to generate buzz among potential customers. This strategy normally pans out, analysts at PricewaterhouseCoopers found. Device-bound consumers are often heavily influenced by social ads and make on-the-spot purchasing decisions based on these plugs. Many also use social sites to check in at retail locations, ostensibly spreading their enthusiasm to others and driving more traffic.
"An estimated 70 percent of sellers plan on making major investments in IoT technology within the the next four years."
Of course, retailers are not content to stop here. Brands like H&M and Sephora have rolled out social media-based chatbots, which leverage machine-learning technology to converse with consumers via chat portals, The Washington Post reported. Chatbots can advise users on their purchase options and direct them to online points of sale to complete transactions. Some believe these unique features could transform retail and give customers equipped with IoT technology an enriched, personalized shopping experience that cannot be found on run-of-the-mill e-commerce sites or in stores. However, some brick-and-mortar establishments are trying to level the playing field in this regard.
Onsite sellers have begun opening smart stores with cutting-edge installations that allow customers to mix the physical with the digital, according to the National Retail Federation. Back in 2015, Target debuted its Open House concept location in San Francisco, an entirely connected space that brings IoT products to the fore, according to a company press release. Other retailers like Samsung offer similar locations, seemingly competing with online purchasing portals, chatbots and other web-only retail draw for IoT-connected customers.
Bolstering backend operations
Sellers also count on IoT devices when executing internal operations. For most, the warehouse is the central hub. Here, various connected technologies work in unison to keep the supply chain up and running. Inventory is often the main concern as most organizations in the retail space suffer through constant miscounts and other errors. In fact, retailers lose out on roughly $1.2 trillion in revenue-building opportunities due to inventory errors, according to data from Jensen published by the NRF.
Robotic IoT technology can solve this problem. Unsurprisingly, Amazon is leading the way here, Business Insider reported. The e-commerce giant employs more than 45,000 robots across 20 fulfillment locations. Automated dollies and arms move products throughout the centers, collecting precise data as they go. Amazon also lets loose automated pick carts that roll alongside human workers and provide them with essential data as they pull products for shipping, according to TechCrunch. These devices facilitate maximum data flow and prevent costly warehouse mishaps.
Of course, business intelligence platforms represent the other variable in the backend IoT equation, funneling data generated by advanced equipment to operational decision-makers. A little over half of retailers have allocated funds for these systems, according to Zebra. This puts them one step away from fully-realized IoT warehouse workflows.
IoT technology will play a major part in the development of the retail industry. As these innovations catalyze change across the sector, Perle will be there to provide sellers with the connective infrastructure they need to embrace the IoT. Our Ethernet extenders, console servers, terminal servers and serial cards help major retailers such as Ace Hardware, Adidas, Sainsburys and Tesco serve their customers. Connect with us today to learn more about our work in the retail sector.