5 Ways Retailers Benefit from ‘Internet of Things’
Most activity on the Internet depends on human interaction. Email, social media, blogs, video, online shopping — it all requires humans. But there’s another, separate use of the Internet that doesn’t rely on humans. It links “things,” such as medical devices, kitchen appliances, vehicles, thermostats, sensors — thousands of things.
Thus, the “Internet of Things” allows physical objects to communicate with each other by connecting them to the Internet. There are more than 2 billion connected devices being used now. It’s expected to grow to over 18 billion connected devices by 2022. Internet of Things — IoT — has gained greater adoption in the last few years with the dropping prices of IoT-enabled devices and sensors and the availability of Big Data solutions that can process millions of events per second in realtime.
Ecommerce merchants and offline retailers can use IoT too. This article lists five examples.
Managing inventory is a challenge. IoT helps by deploying sensors, such as radio frequency tags, on products to track them in realtime. The tracking can be done anywhere, such as on store shelves, in a storage area, or in a warehouse. The sensors can also track the location of an entire pallet. All the data generated by the sensors can be connected to a realtime event-processing solution to monitor inventory levels, raise alerts, and automatically place orders. This can also be used by a retailer’s vendors to replenish inventory by remotely monitoring the data from the sensors. This leads to greater inventory accuracy and better use of the retailer’s working capital.
Walmart was an early adopter of IoT for inventory management to optimize its warehouse and supply chain operations. Other large retailers are now using IoT in their supply chains too.
GPS devices have been used for years to track movement of delivery trucks. IoT takes this to another level by allowing rules to be defined — the delivery route, the recommended speed, adjusting the storage temperature automatically while transporting perishable items, raising alerts for any unplanned or extended stoppages, and identifying maintenance issues before the truck breaks down. This results in lowering fuel costs, reduced theft and loss, accurate lead times, and extending the life of the fleet. Customers can also use the data from the IoT devices to track their products in realtime, versus getting intermittent updates from shipping providers.
UPS’s fleet, for example, is now fitted with tracking devices to cut costs and improve driver efficiency.
Maintenance and Warranty
Products that require post-sale service or are covered by a warranty can be tracked using IoT. This results in realtime data being sent from sensors on the products back to the retailer, which helps in identifying malfunctions or warranty issues. Additionally, this data can be used to improve the products, as retailers know how the customers use them. High-ticket items use the embedded sensors to track the product in case of a theft.
General Electric is the best example of using IoT for predictive maintenance in its jet engines, turbines, and wind farms. By analyzing data in realtime, GE saves time and costs, as technicians know when to visit, say, a wind farm, to maintain a windmill versus making unnecessary periodic trips as part of scheduled maintenance.
Mobile phones are a key part of IoT. Many retailers use them to send realtime promotions, which are typically sent based on variables like the customer’s shopping history, personal preferences, location, as well as realtime weather, traffic, and special events. It is important to prioritize the promotions and send only one promotion to the customer’s phone to reduce confusion. So-called omni-channel retailers use this feature to send promotions for products in the physical store that the customer has already researched on their laptop or mobile device. Location-based tracking is also being used to offer assistance to customers who have been roaming the store.
American Express, for example, has partnered with several retailers to offer realtime promotions based on a customer’s location and credit card activity.
Next Generation Vending Machines
IoT has helped the vending machine industry. Now vending machine companies can communicate in realtime to monitor machines’ inventory levels, enable predictive maintenance, find the nearest machine that has the product a customer wants, and also elastically price products based on factors like demand, weather patterns, and available inventory. Some vending machines are using sensors to monitor if the consumable product is spoiling and can reduce the price instantly to generate revenue before the product goes bad. Interactive vending machines are also available that can access a customer’s history and recommend the right set of products, whether it’s in the vending machine, in the physical store, or available online.