This is Part 10 of the IoT DX Series, and the conclusion of this series. Part 1 focused on the impact of IoT DX for the customer experience. Part 2 focused on how IoT DX is transforming field service. Part 3, elucidated how IoT is transforming the Insurance industry. Part 4 showed several examples of IoT transformation in Financial Services. Part 5 focused on the adoption of IoT DX in Healthcare. The scope of Part 6 was Utilities. Part 7 focused on Oil and Gas. IoT impact in the Public Sector was covered in Part 8. Part 9 focused on the Digital Transformation of Manufacturing.
Retail and Digital Transformation (DX) together? Associating innovation through digitization with one of the more traditional and fading brick and mortar industry sectors even sounds strange. With the rise of online merchandizing and sales giants such as Amazon, the overall market share of retail stores is shrinking and some predict they’ll soon disappear. We’ve seen in the past few years many closures of retail stores, and even shopping malls are trying to redefine their function for the consumer. They’ve taken to offering services such as amusement, restaurants, and entertainment to attract customers.
For some retail stores or shopping malls it’s already too late; however, retailers do have digital innovation opportunities through connectivity and, of course, Internet of Things (IoT). IoT for retail exemplifies the connected customer. Modern shoppers leverage their mobile devices extensively. To connect with them, retailers are now leveraging beacons throughout their stores. These beacons connect the customer to store deals and offers; for instance, sending discount coupons to shoppers that are redeemable in the store immediately. The DX store can track shoppers continuously, it can update specific offers for them, depending upon their interests.
Retail chains and shopping malls are already leveraging these innovative cyber-physical hybrid approaches with good results. Potential DX innovations through IoT in retail are:
- Inventory Management:
A significant trend in the retail industry is to RFID tag each item in the store. For example, Macy’s is planning to RFID tag all items by the end of 2017. There are many opportunities for optimization and improvement through IoT tagging and analytics. The retailer knows exactly where each item is, what has been selling, what inventory needs to be refurbished, and how the item has moved or misplaced. The retailer can analyze trends to find bestselling items and make sure they’re available. One of the big advantages of brick-and-mortar retail is to see, touch, try, and purchase the item in the store, so predictive availability is critical. In this situation, IoT with analytics is transformational for inventory management.
- Customer Experience:
The second area of DX innovation with digital technologies focuses on the overall customer experience within the store. Some interesting technology applications are emerging here. For instance, businesses are testing intelligent greeting robots at retail locations, like SoftBank’s Pepper. Retail stores and malls are starting to offer free Wi-Fi and digital touchpoints, allowing shoppers to interact with retailers. Sometimes intelligent interactive mirrors at the store allow shoppers to experience items virtually. Intelligent digital signage can also recognize shoppers based on their mobile device and shopper profile, offering product suggestions based on their interests.
- Next-Best-Retail & Online Offers:
Retailers have an advantage over online retailers; they know what the customer has done and where they are. They can make offers through retail robots, ubiquitous interactive kiosks, mirrors, signage, or push offers through a customer’s smartphone. We see that Customer Relationship Management (CRM) is now shifting from Omni-Channel to Omni-Device. The “device” in this context could be any of the intelligent connected devices within the store. By leveraging predictive and machine learning adaptive analytics, these retail-connected devices have become channels, including the customer’s smartphone retail store app. The retailer can offer the customer-specific discount coupons and upsell or cross-sell offers on the spot while the customer is in the store. The retailer can also extend offers to an online or mobile channel once the customer leaves the store.
Online stores like Amazon are continuously innovating, creating new DX approaches to gain larger market share. Interestingly, in May of 2017 Amazon opened its first brick-and-mortar store and several others soon followed. The core lesson regarding IoT and customer connectivity for all industry sectors, especially retail, is that continuous innovation will make or break the retail chain, the shopping mall, store, or ecommerce site.
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