The Internet of Things Is Transforming Retail
The challenge for retailers successfully implementing Internet of Things technology is in offering contextually relevant information to the consumer. Otherwise, the connectivity becomes noise and the merchant risks annoying the customer.
Push technology, which often uses beacons to alert shoppers to sale or exclusive merchandise, is often misapplied or overused. But there are other connected technologies that don’t involve sending push notifications to the consumer. For example, “magic mirrors” in fitting rooms at retail stores can “track” the piece of clothing being tried on and provide information to the consumer about where that item is available, in what sizes, etc. Neiman-Marcus currently uses the technology, but other higher-end stores are also in the mix. Macy’s and Bloomingdale’s vendors last Fall began using RFID tagging for fashion items, such as social dresses and men’s jackets, for all of the retailer’s stores.
Other examples include tracking the amount of time the consumer actually spends in a particular aisle looking at specific items on the shelf before the app sends any notifications. Of course, push notifications are a part of the IoT plan, but there is more careful planning going on surrounding their implementations: For example, Macy’s is building out its deployment of Shopkick Bluetooth Low Energy (BLE) beacons, to include multiple departments in all stores. That will let shoppers who “opt in” to receive discount coupons and rewards within a store, based on their locations.
Nordstrom, renowned for its customer service well before the age of the Internet, uses beacon technology to locate customers in or near stores through the geolocation technology in mobile devices. It then targets customers based on consumer preferences and behavior. Nordstrom is one of the retailers using data analytics to help customers move seamlessly between digital and physical worlds, providing the desired information and service while reducing friction.
Data from Forrester Research underscores just how much shoppers want a more streamlined shopping experience. In a recent study of nearly 200 consumers, 71% expect to view in-store inventory online, 69% expect associates to be “armed with a mobile device” and 50% expect to buy online and pick up in-store. Retailers have some work to do to get to that level, but the journey has begun.
“This is going to be a 5- to 10-year journey,” Peter Zaballos, vice president of marketing at SPS Commerce told me recently. “Macy’s and Nordstrom are at the front end of this, but the use of IoT in stores is less about the technology and more about changing consumer behavior and enabling compelling apps that make use of the technology. Think of how long it took mobile commerce to take off. This will not be a fast burn.”
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