Three Ways IoT Improves Retail In-Flow Management

Joerg Koesters

Nothing is more exciting for a retailer than to have an influx of customers waiting for you to open your doors. They hurry inside and disperse down the aisles while you and your employees try to help each customer with their needs.

Yet you feel like you could be doing more to increase sales and provide an enhanced shopping experience. You want to be able to introduce new products to customers and help them find harder-to-locate items easier. You also want to increase the amount of time that customers shop in your store, as this increases the chances that shoppers will make a sale and purchase more items.

Providing an enhanced shopping experience requires you to have a better understanding of a customer’s shopping habits. You need to figure out how customers are navigating your store and interacting with product displays. Are they drawn to certain items that you have promoted, or are they ignoring these items? Why are some products not selling as well? Does it have to do with where the items are placed on shelves? Are customers spending too little time browsing for purchases?

Tackling in-flow management analysis in the retail sector

Trying to gather data about a customer’s flow patterns when shopping for products is not so easy. Many retailers have turned to the Internet of Things (IoT) to track a customer’s location by using push notifications from their smartphone app. This strategy provides an accurate evaluation of how the customer moves inside the store. It can also be used to send sales promotions and discounts for products.

Yet there are downsides to using smartphone app push notifications. Some customers see retailers’ bombardment of promotions to smartphones as spam. These customers might turn off the app’s push-notification feature when shopping at the store. In addition, some customers feel it is an invasion of privacy to be monitored through their smartphone.

IoT, beacons, and RFID chips could enable retailers to address the problems of in-flow management without the hard sales pitch or being overly intrusive. Here are three ways IoT can improve retail in-flow management to boost product sales and create an exceptional experience for customers.

1. Cart and basket beacons

To analyze customer foot traffic, retailers can place tracking technology in shopping carts and baskets. This allows people to maintain their privacy while browsing through the store as the same time retailers can gather important data regarding customer movement. Retailers could see areas where customers linger the most and those that are seldom visited.

This information could be used in several ways: to identify popular products customers will go out of their way to find; to change shelving positions to better optimize foot-traffic flow; to periodically reorganize stock to introduce products that have been located outside customers’ usual traffic patterns.

2. Display monitors for related products

How can you find a way to promote products without blasting notifications on customers’ smartphones? By using a combination of beacons on shopping carts and baskets along with display monitors.

When a customer places an item in the basket, a signal is sent to a nearby display monitor, which shows related items that the customer may be interested in. For example, if someone is shopping for laundry detergent in the cleaning aisle, a mounted store display on the shelf or at the end of the aisle can display fabric softeners and spot-treatment products. This method allows for cross-selling of products. It also reminds customers of items they may have forgotten to place on their shopping lists.

3. Improved traffic patterns

Happy customers who have had a great experience are eager to tell their friends about your store and return to purchase more products. One way to improve the shopping environment is to speed up the checkout lane. Push notifications on smartphones can alert customers in long checkout lines about the location of newly opened cashier lanes. This method can reduce store congestion during busy times of the day.

Another up-and-coming IoT innovation is to eliminate the cashier lane entirely by allowing customers to check out with RFID tags on products. Customers would set up payment options (e.g., bank accounts, credit cards) in advance with the retail store. Sensors at the store exit read the RFID tags on the products customers have selected and automatically deduct the correct payment as customers walk out of the store. Customers can just leave with their purchases without waiting for a cashier to ring them up.

IoT advancing retail in-flow management

The IoT is ushering in limitless innovations to retail. The technology is continually being adapted to support retail owners’ efforts to improve processes, increase employee productivity, and create the ultimate customer experience. Big Data and technology connectivity can help keep operational costs down and increase sales for all types of retail businesses.

Learn how to innovate at scale by incorporating individual innovations back to the core business to drive tangible business value. Read Accelerating Digital Transformation in Retail. Explore how to bring Industry 4.0 insights into your business today by reading Industry 4.0: What’s Next?

About Joerg Koesters

Joerg Koesters is the head of Retail Marketing and Communication at SAP. He is a technology marketing executive with 20 years of experience in marketing, sales, and consulting, Joerg has deep knowledge in retail and consumer products, having worked both in the industry and in the technology sector.