IoT Can Solve Physical Retail's Biggest Weaknesses

Originally posted by Hatem Zeine on TechTarget IoT Agenda

E-commerce accounts for just 10% of U.S. retail sales, but it has influenced the way consumers perceive all shopping. We use e-commerce for better pricing, convenience, selection and research capabilities, then feel frustrated when we don’t find the same in stores. Thanks to e-commerce, we expect:

  • Detailed product information
  • Research options
  • One-click checkout

But, there’s something unassailable about physical shopping. Many of us enjoy the social experience of navigating beautiful shopping centers and interesting stores with friends and family. We like to try on products and literally feel what we buy. The immediacy of walking into a store and leaving with goods is pleasing.

More than a few e-commerce companies have opened or acquired physical stores to provide those experiences. Nonetheless, physical stores lack what e-commerce providers value most: data. It’s much harder to:

  • Track inventory
  • Measure shopper behaviors
  • Personalize marketing offers

IoT systems can close the gap between physical and digital experiences. It’s not isolated IoT tools that will accomplish this goal, but rather an approach that integrates many technologies, including RFID communication, mobile apps, cloud platforms, Bluetooth, NFC, sensors, wireless power and others. Combined, these technologies can address all six of the weaknesses listed above.

To illustrate how, let’s map out the retail experience at a hypothetical stored called BullseyeMart for short.

Entering the store
When a shopper enters BullseyeMart, she will open her mobile app and pair it with a shopping cart. Doing so tells BullseyeMart’s cloud platform who has entered the store. BullseyeMart’s artificial intelligence systems generate offers based on that person’s unique shopping profile, which consists of past transactions, offers used or ignored, shopping routes, demographics and other data.

If, for instance, the person used to buy four to five avocados per week but hasn’t bought any since their price increased one month ago, BullseyeMart’s marketing algorithm might generate a special offer for avocados. The app could also present previous shopping lists (of consumables only) and ask if the shopper would like to be guided on the most efficient route to buy those items again.

IoT inventory
At BullseyeMart, every item has an RFID chip that connects it to the in-store Wi-Fi. The chips are powered wirelessly from up to 10 meters away, meaning they don’t need an onboard battery or cable. They can submit data to the cloud and be embedded in any item without adding bulk. BullseyeMart regularly pings these chips to update inventory counts and never has to pay an army of staff to scan each item.

The RFID chips are tracked as they move around. If our shopper adds an item to her cart, the cart’s RFID scanner adds the goods to a tab on the BullseyeMart smartphone app. Effectively, it handles the work of a cashier. The system tracks which goods she picks and in what order. It also can tell if she grabs an item but doesn’t place it in the cart, or if she does keep the item but later abandons it.

Research and consumer data
Since every item has an identifying chip, our shopper can use her phone’s NFC scanner to ID and research an item. Let’s say the shopper becomes interested in buying a fitness tracker after seeing BullseyeMart’s neat display. She isn’t sure which one to get. Normally, she would wait until she arrived home, search the web and order online. But at BullseyeMart, she scans three similar wearables with her phone and the BM app brings up a line-by-line comparison of features. The shopper can watch product videos with BullseyeMart experts, read user reviews, pull up media coverage and read about accessories commonly used with the wearable. She can even look up information on how the components were sourced and where they were assembled.

Tap to checkout
When shoppers are near the store exit, the BullseyeMart app’s geolocation service sends a push notification to check out. The shopper reviews the listed goods and taps once to charge a credit card on file. RFID scanners at the exits recognize if someone hasn’t paid for the goods (accidentally or intentionally) and attempts to leave.

Since we’re using our imagination, let’s say that our shopper’s cart is a self-driving variety that returns itself to the cart collection aisle. At BullseyeMart, there are no carts scattered around the parking lot blocking the parking spaces.

Retail without the drawbacks
BullseyeMart’s IoT shopping experience addresses weaknesses that affect both consumers and brands in physical retail. IoT gives shoppers the product information, research options and self-checkout they appreciate online. Likewise, IoT automates inventory, expands data collection and introduces personalization.

The world’s best retailers will soon all have an online and physical presence if they don’t already. And it will be IoT that closes the gap between those two experiences.

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