The proliferation of mobile technologies combined with widespread Internet access has rapidly altered just about every aspect of our lives. Now, the Internet of Things (IoT) promises an even greater revolution. Some applications – such as smart cities that use data analytics to improve everything from municipal functions to traffic patterns and connected healthcare devices that provide remote patient monitoring – are already making an impact.
Retail IoT also holds great promise, especially as the industry evolves from a more passive approach of monitoring customer behavior to one where data is increasingly being used to digitally engage with shoppers in real-time. But legitimate concerns exist as retailers try to understand the IoT and determine whether measurable business value can come from it.
We have the technology. What about the strategy?
Today’s technology is capable of making smart retail a reality. Just about everyone in the world uses a mobile device and has 3G or 4G (soon to be 5G) connectivity. Retailers already are combining these technologies with in-store solutions such as WiFi enabled sensors, Bluetooth low energy (BLE), beacons and video analytics, to connect with their customers’ mobile devices and collect multiple types of data. IoT goes even further, allowing users to tap into cloud-based software and infrastructure so the data can be analyzed quickly and leveraged in real-time.
But many retailers struggle with how to fully capitalize on these IoT-enabled capabilities. Without a clear plan to connect the data to business results, it is hard to make a case for the investment. A recent Forrester survey found that while 74 percent of companies say they want to be “data-driven,” only 29 percent say they are good at connecting analytics to action.
Top considerations when implementing IoT in retail
Implementing a successful IoT strategy does not have to overwhelm. Retailers willing to take a step back and consider these four key elements will find they can optimize their IoT investment for real business results:
1. Close the loop: Just because something can be measured does not mean it should be measured. By identifying the desired business outcome up front, retailers can pinpoint the data they must collect and analyze. By closing the loop between data and results, retailers can ensure they are collecting actionable information.
2. Be agile: Retailers that are willing to experiment will find they get the best results. If a retailer has a hypothesis about why an item is not selling, they should be willing to try new things – adjust the lighting, change the promotion or move the display. By collecting and analyzing data in real-time, the results are quick and adjustments can be made immediately.
3. Choose partners wisely: Retailers should identify technology partners that understand their goals and can relate to their brand. It is also important that these partners have the ability and willingness to continue investing by scaling up as the retailer’s IoT implementation grows.
4. Make security a priority: Security must be top of mind. It is common knowledge that the more connected devices a business has, the greater the security risk. If a retailer has doubts about their own in-store network security they should look to their service provider, which can manage all of their machine-to-machine (M2M) devices and IoT wireless connections in a more secure network.
A successful IoT strategy can be instrumental in helping retailers more effectively engage with today’s tech-forward consumers. By starting small and building on successes, retail IoT can have a positive impact on both operational efficiencies and the in-store customer experience.