IoT in Retail Industry : Use Cases, Benefits, Trends and More

A quick trip to your local retail store, supermarket, or convenience store would suggest how inescapable the Internet of Things (IoT) has become in the retail sector. The sectorial landscape has experienced a seismic shift with the evolution of IoT.

Today, stores are constantly leveraging emerging technologies like cloud, mobile, RFID, beacons & more to provide connected retail services and offer better shopping experiences to customers. And, with that, more than 70% of retailers feel confident that IoT will significantly impact how they will do business in the future.

If you also want to leverage IoT applications in your retail business but wish to learn more about the IoT capabilities that influence upcoming trends, business benefits & more. In that case, the article is for you.

Here’s what we’ll cover:

• The Role of IoT in The Retail Market
• Internet of Things in Retail: Market Trends
• Benefits of IoT in Retail
• The Use of IoT in The Retail Industry
• How Rishabh Can Help Retailers Utilize IoT

Retailers are under increasing pressure to keep up with consumer demands, quality services, on-time deliveries & competitive pricing. These factors and the lack of technical know-how restrict them in a market where they would otherwise thrive. From business process optimization to cost reduction and service automation, the application of the internet of things in retail can address significant challenges & drive unprecedented benefits.

IoT refers to a network of physical devices, objects & spaces embedded with Bluetooth beacons, sensors, Global Positioning System (GPS) & Radio-frequency identification (RFID) technologies. It helps brands track the location, condition & movement of their assets & inventory anytime, anywhere. Retailers get 360-degree visibility by connecting and exchanging data with systems & devices over the internet.

Listed below are two of the most common IoT applications in the retail industry:

• Data collection & sharing: Devices embedded with sensors help track product and shopping lifecycle. It would include tracking various forms of data, including environmental & equipment, asset performance, stock levels & more. This information can be stored, transformed & analyzed using algorithms to extract meaningful insights to optimize operations.
• Process automation: IoT-enabled connected stores and devices can be partially or fully automated to bring efficiency, sustainability & resilience to retail operations and processes. Further, retail automation helps increase the pace, precision & efficiency of supply chain operations, inventory management, order fulfillment & checkout.

According to Research & Markets Analysis;

• Due to the seismic shift in demand for IoT in retail, its market size is expected to hit $177.90 billion by 2031.
• North America will dominate the IoT in the retail industry.
  • It is attributed to factors including an increase in digitalization and the adoption of IoT solutions by the retail sector.
  • However, the Asia-Pacific region is to witness the highest growth rate during the forecast period (2031)
• Factors include effective store space monitoring, inventory management, supply chain management, and customer behavior monitoring. It will drive demand for IoT in the retail market.
• Optimization and automation of the supply chain is identified as the main factor for IoT adoption
• Further, connectivity technologies, including digital signage, top-of-the-shelf displays, beacons, and price displays, will allow brands to access large volumes of data on customer activity during in-store shopping.

Whether you want to explore IoT capabilities fully, make seamless connections with your CRM or POS systems, implement connected solutions, or need assistance with API development, Rishabh Software can help you leverage IoT’s transformative power. If you want to learn more about smart retail examples, here’s an interesting read on the future trends of IoT with practical applications across industries.

IoT implementation in the retail industry is gaining momentum due to several reasons. The technology aids in developing new business models, analyzing consumer behavior, optimizing processes & increased employee productivity. Let’s look at the key benefits of implementing IoT apps in retail.

• Optimized Supply Chain Management: RFID & GPS technologies allow retailers to identify and inspect every object across warehouses, in transit and on the shelves. Connected sensors provide a consistent stream of real-time data from the floor to the store. It helps identify potential bottlenecks, enable contingency planning, allow route optimization and accelerate product delivery. It also enables manufacturers, suppliers and distribution centers to optimize shipping & handling times while ensuring speedy delivery to vendors and consumers.
• Enhanced Customer Experience: IoT capabilities and machine learning algorithms can accurately assess consumer data to personalize shopping experiences. Bluetooth Light Energy (BLE) beacons can help personalize shopping by sending alerts & notifications about special discounts and seasonal offers on smartphones based on a shopper’s location proximity.
• Layout Optimization: Aisle analytics software clubbed with infrared sensors enables IoT technology to improve the in-store layout. It helps optimize customer behavior. This data can be used to understand buyer journeys, identify confused and impatient shoppers and determine the reasons for abandoned carts. IoT retail analytics and Machine-learning-driven demand forecasting can help the staff anticipate demand, supply & customer retention ratios and make proactive decisions to adjust the shopping environment.
• Efficient Inventory Management: RFID chips, beacons and sensors can seamlessly synchronize assets and inventory with data centers. Smart price tags and digital displays integrated with image analytics capabilities help improve control and order stock levels & expiration dates in the warehouse and on the front shelves.

The modern retail ecosystem comprises various IoT devices, platforms, applications & more. Here’s how retailers leverage IoT’s potential to navigate the changing retail landscape.

Seamless In-Store Navigation

Sensor-based lights, temperature controls, security controls, stock monitoring, indoor air quality (IAQ), and point-of-sale queuing assistance aid in enhancing the in-store experience for shoppers. Indirect advantages of the data extracted and analyzed from the IoT mentioned above include compliance monitoring across lighting schedules, energy consumption, refrigeration zones, warehousing, HVAC equipment performance & maintenance plans.

Costa Coffee uses a smart vending machine solution across its stores.

• Incorporated a cashless payment system and remote temperature monitoring sensors. And, features a secure loyalty card connectivity system for the vendor
• Enabled, the coffee chain to get real-time information about cash collection, restocking and more. It helped drastically reduce the overstocking challenge

Smart Shelves

Help track items to ensure they’re never out-of-stock, and check that things aren’t misplaced on various shelves. Fitted with weight sensors and RFID tags & readers allow scanning of the products on both display and stock shelves. It makes your inventory process cost-effective and more precise. Additionally, by connecting each RFID tag to a reader, Smart Shelves can detect in-store theft — saving money on security personnel and cameras.

Kroger, a US-based supermarket chain, has installed 2000+ Edge shelves (RFID-equipped shelves) throughout the center of the supermarket, including most aisles with dry goods.

A robust interconnected network of sensors sends out;

• Automatic replenishment alerts (for items out of stock), misplaced item alerts,
• Last scanned alerts (for prevention of theft),
• Expired date notifications, customer interest notifications (how much is the item looked at, picked up, put back, etc)

Product Placement

Store managers can use the insights collected from sensors and video analytics to identify premium store areas. They can test the placement of different product types in other spots and determine the most profitable layout. Implementing a self-learning analytics algorithm can also assist store owners and operators deliver a seamless shopping experience.

Buyer Behavior Tracking

Occupancy sensors share vital insights on store traffic patterns and retention times in premium product areas. This data enables better planning of in-store merchandising & guided marketing via effective digital display ads, calculated space allotment and aisle layouts. This data can also be leveraged to track the wait times at checkout for optimizing customer service with additional self-checkouts or more staffing.

Dandy Lab utilized IoT to help their customers to create an exciting in-store shopping experience

• Within the store, the movement is captured by multiple sensors and WiFi routers and backed by a robust data analytics algorithm
• Allows customers to communicate directly with the manufacturers or designers on displayed products. It is while providing input regarding design alteration

Checkout Automation

Brick-and-mortar stores can use a variety of IoT Technologies, including motion-activated cameras, beacons, and shelf-tracking tags, to provide a fully automated, cashier-less in-store shopping experience. Shoppers can walk in, pick the items they want, make the payment online, get a digital receipt on their smartphone and walk out.

Amazon Go utilized IoT to create a seamless transaction process for their employees and customers.

• The tags attached to the products in their baskets are scanned automatically when the customer exists in the store
• Smart tags act as an anti-theft prevention device while creating a smooth shopping experience

On-Site Sensors for Repairs & Maintenance

Retailers can install commercial sensors for food storage facilities, parking sites, and warehouses to track light, humidity, temperature and air quality. If any vital aspect is amiss, an instant alert is triggered. Depending on the software, you can also generate reports to track trends and fluctuations over time and automate safety checks.

Cold Chain Monitoring

Food spoilage in the grocery industry results in significant losses. Environmental sensors can be installed to track ambient conditions inside a food storage facility, cargo vessels, and delivery vehicles to ensure food remains fresh and waste is reduced. They can help obtain precise data, like the temperature at which an item is being stored, how long it is spent in transit, etc. This information can help improve the quality of transportation for the goods in real-time – whether a product is being kept at temperatures too low or too high, avoiding a substantial loss.

Omnichannel Online & Offline Retail Experiences

The increasing preference for online shopping has compelled retailers to blend in-store & virtual buying for a seamless experience. IoT devices make this possible by providing consumers with easy access to real-time stock availability in stores. Shoppers can load their carts online and try the products in-store. It ensures a hassle-free in-store experience with minimal time spent.

We help businesses with developing custom retail industry-focused solutions. We partner with organizations, from startups to mid-size & large corporations, to offer custom IoT app development services and solutions. We help businesses integrate the IoT with a wide range of middleware and software development services. Our experience spreads across developing solutions to address various industry use cases.

Recently, we enabled a logistics company seamlessly manage its supply chain network with an IoT-enabled fleet management solution.