How to Use IoT in Retail and eCommerce

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Recently, there has been a real boom of the Internet of Things in the market. This technology is based on data transmission between connected devices over the internet. It is a real breakthrough in recent years in eCommerce and retail, radically changing shopping features nowadays.

IoT in the retail sector and eCommerce sphere is shifting into a necessary attribute for every company. And the coronavirus pandemic only increases the necessity for this trend. After all, business is moving online, which means a growing need to invent more and more new solutions to stand out in a competitive market.

As a result, the experts’ forecast about IoT says that the total annual revenue worldwide will continue to rise, and by 2030 will reach 1,058.3 billion US dollars.

Forecast about IoT revenue in billion
Forecast about IoT revenue in billion. Image source: Statista.

Below, we will cover six methods of using IoT in online retail and eCommerce.

6 Ways to Apply IoT Technologies in Sales

Today’s customers got used to flawless service more than ever. They are no longer settling for less. This is why businesses are seeking ways to customize Magento on-site search, develop customer support systems, improve their business processes more and more often, and use IoT advantages, too.

What exactly does the IoT offer for retail and eCommerce? In fact, it has many benefits that can help make a business stand out from the crowd and attract customers.

Let’s explore exactly how these technologies can be used in eCommerce and retail.

1. Providing Personalization Combined with AI

Many eCommerce companies collect client data to provide maximum service personalization, thereby ensuring improved customer experience and motivation to buy.

It could be information such as

  • Purchasing preferences and interests
  • Ordering history;
  • Shopping behavior.

This data is collected mainly through different devices: smartphones, fitness bracelets, smart devices, i.e., IoT. Analyzing information about customers helps retailers better understand their target audience, improve service quality, and thus increases profits.

As an example, let’s look at how Bed Bath & Beyond uses personalization capabilities. Its site has AI (artificial intelligence) powered blocks, which offer the customer a selection of products. It is made based on collected data about the products the buyer has already viewed/ordered; the purchases made by other users who bought this item, and other information.

Artificial Intelligence powered blocks
Artificial Intelligence-powered blocks. Image source Bed Bath & Beyond.

2. Strengthening the Relationship Between Manufacturers and Buyers

The IoT helps ensure long-lasting and enduring relationships between manufacturers and end consumers. In particular, connected devices motivate customers who have already purchased something to buy other products from the brand.

To go over the examples of IoT in retail, let’s suppose the following situation. A person has ordered a printer that is refilled with ink or toner cartridges. The device has smart sensors and is compatible with AI-powered assistants, such as Alexa or Google Assistant. 

The system receives and processes information that the ink cartridge is about to run out and notifies the user that it’s time to order a new one from the manufacturer. Some smart devices are even capable of automatically ordering ink or toner at the needed time.

For an example of how this works with Amazon Dash Replenishment, see the screenshot below.

Never run out of ink or toner again
Never run out of ink or toner again. Image source: Amazon.

3. Automated Shopping Processes

Another essential advantage of the IoT applications in eCommerce is the ability to automatically buy and pay for goods in retail. Modern technologies allow shoppers to avoid waiting in lines and make the whole process as smooth and quick as possible. This high level of service allows building solid and long-term relationships with clients.

As an example of using IoT in supermarkets, let’s look at a Carrefour City+ that opened in Dubai in 2021. It provides a contact-free shopping experience. Customers walk around the store, picking up the items they want and leaving without having to contact staff or pay at the cash register.

The sophisticated system tracks the customer’s movements around the sales floor via a smartphone app. It sees what products the buyer is picking up with a variety of smart sensors. Then, a couple of minutes after the customer leaves the store with the desired items, he receives a receipt for his purchase on his smartphone.

Automated shopping
Automated shopping. Image source: Majid Al Futtaim

4. Improved Inventory and Automatization of Storage Systems

Keeping an eye on the warehouses in a large business is very difficult because of the tremendous amount of goods. The IoT comes to the rescue by automating inventory and storage processes, thereby eliminating the risk of human error. This is where smart sensors and RFID tags help.

a) Automatic Data Storage

With IoT smart shelves, item information is automatically recorded in the system and does not demand human intervention. This includes such data as:

  • expiration date;
  • manufacturer name;
  • product type;
  • batch ID;
  • and so on.

b) Monitoring Goods

Such systems allow retailers to monitor the arrival and departure of their goods from warehouses. Moreover, various sensors enable them to monitor and control storage conditions, including checking the temperature, ensuring it meets the requirements, and notifying of possible problems.

c) Reducing Human Labor

Another opportunity offered by the IoT for retail stores and warehouses is the partial reduction of the need for human labour by using robots. They can transport, wrap, pack the goods, and do many other useful things.

The screenshot below shows how different technologies in tandem deliver storage automation in the retail and eCommerce business.

Information technology and Equipment Machinery
Information technology and Equipment Machinery. Image source: Oracle.

5. Advanced Logistics and Tracking Processes

In a highly competitive market, even a minimal delay in the delivery process can lead to a situation where the customer is disappointed in your service and leaves for a competitor. Therefore, it is crucial to ensure smooth management of logistics processes, which IoT can help with.

Technologies such as GPS and RFID allow retailers to monitor the transportation of goods until the moment they are handed over to the customer. It is also possible to monitor a wide range of data, such as

  • time on the way;
  • weather conditions;
  • location;
  • driver status;
  • information about responsible persons and more.

In addition, IoT applications in retail assist in estimating delivery durations and preventing the loss of goods or errors in their shipment.

Furthermore, they provide the ability to send automated messages to customers about precisely where the goods are and notify them when they need to be picked up.

The AI-based delivery logistics and tracking system include many elements that operate as an interconnected system (see screenshot below). All this guarantees maximum transparency of the process for both the retailer and the customer.

AI-based logistics and tracking system
AI-based logistics and tracking system. Image source: WirelessLinks.

6. Fast Delivery via Drones

One of the most expensive stages of shipping goods is last-mile delivery (when the goods finally arrive at the customer’s home). Therefore, it is no surprise that companies are trying to find ways to save on shipping costs.

In the future, drone delivery is expected to be the perfect solution to this problem. The giants such as Amazon, Walmart, and Google are among the pioneers of this service. Drone delivery is gradually but consistently increasing in popularity.

The point is that drone couriers can solve three problems at once:

  • Reduce the cost of delivery;
  • Allow delivery to hard-to-reach areas;
  • Speed up delivery time by avoiding traffic jams.

For example, Walmart partnered with drone delivery company Zipline to recently launch the first commercial drone delivery in Arkansas, USA.

Zipline commercial drone delivery system.
Zipline commercial drone delivery system. Image source: NYP Holdings.

To Sum Up

There are many benefits of using the Internet of Things in eCommerce and retail:

  • Automation of sales chain processes
  • Reduction of company expenses
  • Improving the quality of customer service
  • Data collection and analytics
  • Attracting new customers and much more. 

There’s no doubt that IoT in eCommerce and retail is the key to pushing online sales even further than ever. The ability of these technologies to bring businesses closer to their customers and enhance the relationship between them is vital in global pandemic conditions. So it is worth thinking about starting to implement these technologies in your business today.

Image source: Freepik Premium

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