We often cover how leading enterprise retailers are innovating with their digital assortments using virtual inventory, endless aisles, and more. Retailers are also innovating with their physical assortments using technologies like Internet of Things (IoT) tools. In this article, our friends at Deputy explain how IoT can boost the omnichannel retail experience for your customers and why you should consider investing in it in 2023.
Today, the line between in-store and eCommerce is blurred. More and more retailers are merging both into a single holistic omnichannel customer experience. But, the greatest challenge here is getting a single view of the customer and synchronizing all the info gathered across channels. IoT can help you with this and boost your omnichannel retail experience.
Having a single overview of your customer allows you to treat each customer as one segment. With this, you can offer personalized products, offers, and discounts across all channels. The goal is to synchronize your online buyer and your in-store buyer personas.
So, let’s jump right in and explain how IoT can boost omnichannel customer experience in retail.
1. Personalized customer experience
A great example of a personalized experience that stretches across channels is IoT beacons. These are Bluetooth devices that get a signal every time a shopper with a smartphone approaches the physical store location. Retailers can use beacons to send promotions, ask for reviews, or even give coupon codes or discounts to shoppers in close proximity.
Macy’s has been already using beacons since 2014. Today, Target, Walgreens, Apple Store, and many other brands already use beacons. For instance, you’re a user of the Macy’s app but currently shopping in-store, and you go to the women’s clothing section. The beacon will track your movement, consider your past shopping choices, and give you personalized product suggestions or discounts.
Customers today expect immediate personalization. They aren’t interested in receiving a discount on their abandoned cart products three weeks later while you gather and compare data. Unlike traditional digital marketing efforts, beacons provide immediate personalization, thus greatly boosting customer experience in-store and online.
Additionally, retailers can use scannable QR codes, RFID tags, or NFC technology to allow customers to pull up and expand product information. Like this, your retail store can go one step ahead in terms of transparency.
2. Faster in-store checkout
One of the disadvantages of in-store shopping is waiting in line to pay.
With the help of IoT, retailers can now use RFID tags (Radio Frequency Identification) on their products. These are small tags that use radio frequency to produce a signal. So, instead of lengthy checkout queues, now your customers can shop and check out autonomously.
The goal here is to work more efficiently by transforming your store into a self-service experience. Customers love being able to check out with no fuss. And, naturally, their smooth experience will increase the chances of coming back to your store again.
That’s exactly what the sports goods company Decathlon did with their Scan & Go payment service. They allow customers to shop and pay contactless using their smartphones.
In Decathlon, in-store buyers can scan QR codes generated with the help of RFID and pay on their smartphone PoS using Apple Pay, credit cards, etc. By scanning the codes, they will generate a virtual shopping cart. Once they complete the payment, the RFID tags for security will automatically deactivate, and they can pick up their products and leave the store. No more sales register, no more waiting in line.
Some other great options that cut down on checkout time and have a similar effect are click-and-collect or BOPIS (Buy Online, Pickup In-Store).
3. Automated supply chain
IoT can also simplify and streamline your supply chain and inventory management. Technology like smart shelves that use weight sensors and RFID tags to scan products, realize when inventory is going low, and restock automatically.
Concepts like endless aisles are excellent solutions for closing sales even when the product is out-of-stock. Endless aisles technology is also known as “Buy In-Store, Ship to Customer”.
For instance, imagine a shopper in your physical retail store wanting a smaller size and a different color of a product. However, you currently don’t have that product variation in stock. With the help of endless aisle technology, you can let the customer pay for the product in-store, and have it delivered to their home address.
With the practice of endless aisles, retailers don’t need to keep stock at every PoS and physical location, which, in turn, decreases inventory and warehousing costs.
All in all, IoT and smart warehouse management software help retailers save money, reduce waste, ensure the store never runs out of stock, and work more efficiently.
4. Better employee engagement
Based on 2022 Harvard Business Review research, employee experience drives revenue and it’s responsible for the profitability of a company:
“...if an average store could move from the bottom quartile of performance to the top quartile in each of the four dimensions it would go from generating $57 per person-hour worked to $87 per person-hour.”
Additionally, several other studies confirm the connection between customer experience and satisfaction, and employee engagement. Logically, this is especially clear in retail, where employee-customer interactions are part of the brand experience.
Unfortunately, according to the latest BLS report, the employee turnover rate in the retail industry is around 60%. This is a really high number, which shows us that there’s definitely a lot of room for improvement in this area.
Investing in tech, especially software solutions and IoT also helps employee engagement and improves your store’s retention rates.
For instance, you could build a retail employee scheduling strategy and use software to automate scheduling, shift swaps, payroll, time attendance, etc. Considering that many retail employees are shift workers, automating the scheduling process and giving them the option to swap shifts with each other can greatly improve their work-life balance.
5. Lower energy consumption and reduced waste
Last but not least, IoT can be implemented in devices like storage coolers, fridges, freezers, lighting, heating systems, etc.
One amazing example of this is the way Walmart leverages IoT to help them monitor their refrigeration and detect potential issues, which will then be sent to a maintenance team through cloud technology. They also use IoT to monitor HVAC and energy systems remotely and respond promptly to any changing energy consumption needs.
The IoT sensors in these devices will alert the retailer in case of any temperature issues, malfunctions, heating problems, and even increased electricity consumption.
The goal is to help you save energy, work more efficiently, and, of course, prevent problems from escalating and causing further damage.
Wrapping up
Today, IoT isn’t just Amazon’s Alexa or Apple’s Siri. The applications are far greater than just a smart speaker.
In retail, the purpose of IoT is multifold:
- Improving the quality of service
- Streamlining internal workflows
- Simplifying the checkout process
- Creating an omnichannel retail experience
- Automating supply chain management
- Saving energy consumption
- Monitoring systems remotely
And, of course, this is just the beginning, as IoT finds more and more uses in retail as well as many other industries.
In summary, implementing IoT technology can greatly boost your omnichannel retail experience and give you a competitive advantage in your market and niche.
Rob is a content marketing manager at Deputy, a robust scheduling software that can be used to manage your workforce in a wide variety of different industries. Aside from helping businesses reach operational efficiency, he keeps up to date with the latest trends in SaaS, B2B, and technology in general.
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