Internet of Things and Retail The Internet of Things, or Internet of Things, is a network that connects physical objects to each other via embedded sensors. The IoT allows these objects to communicate (with one another and with us), and to analyze, organize and share the data received through cloud-based software platforms. In the retail sector, the Internet of Things can bring numerous benefits thanks to applications such as RFID, infrared presence and flow detectors, smart shelves and magic mirrors, showcases that exploit augmented reality, digital signage solutions integrated into interactive totems and multi-function stations, geolocation and geofencing. This is just to name a few. We see below some of the most used IoT applications in the retail sector and what are the advantages:
- The IoT can help the management, tracking, and optimization of goods in the transport phase, to make the whole process more efficient. This is one of the goals of intelligent transport, also called Smart Transportation. Many use GPS to track and route trucks; thanks to the Internet of Things we can better understand where the pallet is and when it will be delivered.
- Demand-based warehouse management is a demand-driven warehouse automation system both online and in-store. The IoT allows us to monitor sales opportunities in real time and track missed sales. Thanks to the RFID it is possible to effectively manage the inventory and optimize the service level. Today the warehouses are organized in corridors and shelves with a fixed layout; in the future, they will be open spaces where automated pallets will self-organize in real time based on demand.
- Predictive equipment maintenance (Predictive Equipment Maintenance) is used to detect malfunctions, failures or other problems related to the equipment used in the store. It can certainly help to optimize consumption while saving energy, but not only. For example, in grocery stores, refrigeration appliances, if equipped with sensors, can report any operating problems. Problems that could affect not only consumption but also temperature changes, thus ensuring food safety.
- In a smart store (Smart Store) we can use video monitoring or Wi-Fi of the flow of customers to understand where they focus more and which paths they take. This allows us to understand not only when to send a salesman to help them complete the purchase, but also to collect this information to adjust the layout of shelves and display cases and make them more efficient. Indeed, it is possible to analyze the flow of customers of a shopping center by crossing the data between the various retailers, in order to understand the entire purchase path.
- The consumer increasingly has an impact on the marketing strategies of the stores. Thanks to the IoT we can better analyze customer context and preferences and respond more effectively. For example, creating personalized offers at favorable prices and services based on geolocation. In the past, mass promotions were made hoping that – statistically – a percentage of customers would be interested. Today, thanks to the IoT, we can analyze the purchasing experience to create personalized proposals. This gives us the opportunity to implement a rich digital marketing plan and even announce ongoing events to customers directly on their smartphones.
Today, physical store owners want to access the same kind of data and analysis that is available to those who sell online. Thanks to the Internet of Things, retailers will have the possibility to detect and analyze a lot of data.