The concept of the Internet of Things – where appliances and other devices are equipped with Bluetooth, enabling them to connect, communicate and provide a range of data – has been around for some time. It wasn’t until recently, however, that this network of connected devices actually began to form in the real world. Now, everyone from individual consumers to businesses in every industry are looking for ways to put the IoT to work for them.
The retail sector is uniquely positioned to make use of this resource in a way that no other vertical is able to. The IoT is opening more than a few doors for retailers both in brick-and-mortar locations as well as online stores. This is particularly true when it comes to leveraging the big data that the IoT has to offer.
But how, exactly, can today’s retailers harness the power of the IoT in a way that makes the most sense for their brands? And how do these connected devices help power a winning big data strategy? Let’s take a look:
1) IoT by the numbers: Statistics are telling
First, it’s important to understand the impact of the IoT, both now and into the future. After all, experts note that this type of technology will only become more mature and increasingly important in the upcoming months and years.
- According to Cisco, there are currently 15 million connected devices across the globe. This number is set to considerably rise, and could surpass 200 billion IoT-enabled units by 2020, Intel predicted.
- Spending on these systems will increase as well. IDC noted that where IoT-related spending reached $656 billion in 2014, these types of purchases could total as much as $1.7 trillion within the next four years. What’s more, over 30 percent of that will be spent on modules and sensors to create the backbone for a purpose-built IoT system.
As the sheer number of devices continues to rise alongside spending in this technological sector, it’s clear that the IoT will begin to be established in more places than ever. It’s safe to say that the retail sector will account for a considerable amount of these IoT deployments, particularly as an increasing number of beneficial use cases continue to emerge.
2) Beacons bring considerable benefits
One such use case is that of beacon technology, which has already been seen in certain retail locations. IBM explained that a beacon system includes sensors installed throughout a retail store, such as on shelves, advertisements, displays and other sites. These beacon sensors have the ability to connect and interact with shoppers’ mobile devices, gathering data and helping to personalize the experience consumers have in a brand’s store.
“This data has to be opt-in [by the consumer], but it can serve to link online advertising with offline shopping behavior,” eMarketer retail analyst Yory Wurmser noted.
Using this data, companies can provide a truly unique shopping experience for customers, while they’re in-store or using the business’s online capabilities. For instance, utilizing data captured by beacons, a brand can recommend products to customers both online and inside a retail location – imagine walking past a display in a store for a certain product that you had been searching for online, and receiving a notification on your smartphone to ensure that you don’t miss it. This is the type of customized service that had been incredibly difficult, if not impossible to offer, before beacons.
Collectively, beacons can also provide insights on how customers move throughout the store, enabling employees to create the best floor layout possible. If, for instance, a particular clearance rack or endcap display is continually being missed by customers, causing merchandise to pile up, staff can utilize the information from their beacons to rearrange the store accordingly. This ensures that the rack or display isn’t being overlooked.
“The possibilities to wow customers are endless if retailers can perfect their beacon systems and convince customers to opt-in to communications,” IBM stated.
3) Improved inventory management means boosted revenues
Beacons and other visibility-increasing IoT systems can also help stores better manage their inventory, particularly when a brand has several retail locations across different geographical areas.
Deloitte University Press authors pointed out that when certain items fall out of season in one store location, IoT data can help staff pinpoint this merchandise and move it to another location. In the past, for instance, brands would have to put seasonal items on clearance to ensure that items were sold. While a customer in Chicago won’t pay full price for a pair of shorts in December, a shopper living in a warmer climate like Nevada or Hawaii wouldn’t expect a deep discount given their location.
“Because companies have near-total inventory visibility and items can be shipped to and sold anywhere, they are no longer bound to a season-dependent stock,” Deloitte University Press authors wrote.
“Using this data, companies can provide a truly unique shopping experience for customers.”
And this doesn’t just hold true for seasonal items, but any type of inventory. One luxury brand used this system to its advantage to ensure that dish place settings were kept intact, and wouldn’t have to be sold piecemeal.
“Macy’s had 1,600 place-settings scattered across its stores — in ones and twos,” Deloitte noted. “Since dishes are typically purchased in sets of eight or twelve, the items were essentially stranded and likely to end up with deep markdowns. But because of store-level inventory visibility and online sales, Macy’s was able to piece together complete sets and sell them all at full price.”
4) Partnering with an expert to make the most of IoT big data
Overall, one of the greatest benefits of the IoT in the retail sector is its ability to help gather even more details about a brand’s customers. These numbers can be captured, analyzed and collected to reveal a nearly endless list of insights, including the best store locations for certain merchandise, the most optimal sites for displays as well as the most trafficked areas of a store.
However, in order to make the most of this information, it’s critical that your brand has the resources needed to collect, analyze and leverage actionable big data insights.
This is where a partner like Aunalytics becomes so important. Aunalytics isn’t just a big data expert, but also specializes in analytics in the retail sector. We’re in the best position to help you best utilize your IoT-related big data in a way that will be the most successful for your brand. To find out more, contact us today.