It’s clear: The retail industry is changing at a rapid pace. It has never been so important for retailers to grab hold of their customers and create new sales points, drive better engagement, and build brand loyalty. The implementation of IoT can provide that important connection point for retailers and customers, providing a new way for retailers to engage with and meet the needs of their customers.
Retail trends are worrisome: A jumpstart with IoT can change it all
By April of 2017, the U.S. had lost 30,000 positions in the retail industry, and CoStar Group reported that 10 percent, or 1 billion square feet of retail space, would shutter by the end of the year. In the UK, continued Brexit concerns plague the retail industry. In Australia, there’s a growing concern about Amazon moving into a retail market already struggling to stay alive. These key trends are worrisome for retailers.
The key here is that consumers are still buying. In some cases, consumer spending is up. The problem is, it’s much easier to buy what’s needed online and wait for it to arrive rather than head to a store. That’s what retailers need to change. They need to give consumers a better experience when they walk in the door to convince them to come more often, buy more, and increase their brand loyalty. IoT can help with that.
At the same time, most retailers today see the value of turning their attention to improving e-commerce operations. Implementing the right technology can ensure that shopping carts are not left empty and that consumers always have an idea of what is in stock and ready to buy.
Retailers secure profitability again through the connected customer
Retailers have an interest in IoT. It provides improvements in inventory management, asset management, and consumer experience-driven sales. The simplest explanation of the future of retail is that IoT will become a critical enabler of the shopping experience. What does the connected customer expect? What can they provide to the industry?
IoT improves customer satisfaction
A key component of IoT in the retail experience is its ability to enhance customer satisfaction. Happy customers translate into stronger loyalty, larger transactions, and more frequent visits to retail locations. IoT can connect people, including customers, associates, and service providers, directly to products and to product information.
That means it can help to improve the visibility of product. Consumers know what’s available, and that drives their ability and willingness to purchase now. It also reduces inaccuracies in inventory availability. This is one of the most common reasons e-commerce retailers see abandoned order carts, customer dissatisfaction, and even brand switching.
With more customer satisfaction and loyalty, retailers see long-term profitability rise. Initially, this means bigger checks, but it also means increased sell-through. It improves profitability overall but also reduces the need to mark down products now, a critical concern for many retailers today. Consumers have become accustomed to buying only when there’s a sale or discount. Retailers no longer have to mark down their product to see sales as frequently.
Personalized marketing drives better sales performance
Finally, IoT creates personalized marketing opportunities for retailers. This type of marketing is perhaps the most important component of physical store marketing going forward. Personalized marketing is the ability to send specific messages of sales, opportunities, or product awareness to a consumer that’s most likely to buy. This leads to higher conversion rates and better sales performance in every scenario.
The changing retail sector is more consumer-focused than ever
It’s estimated that 70 percent of retail decision makers across the globe are adopting IoT to improve customer experiences. Another key fact from the Zebra 2017 Retail Vision Study says that 90 percent of retailers plan to implement some type of buy-online/pickup-in-store plan within the next four years. As these details demonstrate, there’s a growing need to change the way you do business to meet the needs of today’s consumer.
Imagine, for a moment, how personalized marketing could work for the average retail location. A consumer stops at a shopping mall. The mall’s implemented IoT system notices the consumer based on his or her opt-in app. It can provide insight into the latest discounts or perhaps offer in-store purchases in a flash sale. Retailer A sees that this consumer, who purchased a specific product from them, is nearby. The retailer can ping the consumer’s phone, offer a flash sale on that item or provide information about bulk inventory, and the customer benefits. This creates instant satisfaction to the consumer and provides a clear opportunity for the retailer, and the shopping center, to connect and engage their consumer.
The key here is the technology behind IoT. With the most effective system in place, including the hardware, software, and connectivity, it becomes possible to embrace a better customer-retail connection. Of course, having the framework in place and the tools to pull in and analyze that data is the critical first step. From there, the more companies implement IoT strategies, the more they will comprehensively change the retail atmosphere.
Learn how to innovate at scale by incorporating individual innovations back to the core business to drive tangible business value: Accelerating Digital Transformation in Retail. Explore how to bring Industry 4.0 insights into your business today: Industry 4.0: What’s Next?