IoT in retail: Transformation of the shopping experience
The last 30 years of technological development has taken individuals and societies into the information era. The Internet and then the rapid adoption of mobile technologies and devices has affected all realms of our daily lives.
The impact of the Internet of Things vision will be transformative for the retail sector. Shopping channels, physical and virtual, will become more intelligent and interconnected creating a continuum of smart retailing environments, says Robin Duke-Woolley, CEO, Beecham Research.
These retail environments are not mutually exclusive. In fact, in the light of offering an omni-channel strategy retailers tend to be physical retailers, but also virtual retailers, and, maybe, with strong presence of interactive kiosks in the geographies they cover. Hospitality and Entertainment have some specific needs because they do not just sell goods, but they offer different types of services. All this also suggest that the transformation of these retail environments is not about a simple technology project, but about a holistic IoT strategy on the entire operations of the retailers.
The retail sector can be segmented in a number of different ways to better understand the issues and opportunities for use of IoT. A particularly useful approach introduces 6 sub sectors, as shown in the chart.
Take for example Multi-Site retailers. These comprise a broad range of stores offering shopping experiences, including: high street chains, food supermarkets, department stores, shopping malls and street markets. The retailers included here could also include banks, insurance companies, building societies, chemists etc. as well as the usual high street chains. Shopping malls could include retail outlets at airports and travel hubs.
Redesigning the role of the shop within new strategies is a key challenge for these types of retailers. Stores are still extremely important in retail. Their main aim is to create a rich and human shopping experience there. That said, the physical store is not necessarily the point of sale anymore. There are new ways of being a physical store, such as a pop-up store where brands locate their store in specific locations for limited amounts of time or discount stores. There is also increasing competition from on-line retail Web sites. However, multi-site retailers are increasingly designed around omni-channel strategies with the intent of covering different modes of shopping, physical and digital.
Multi-site retailers face the challenge of integrating different channels and stores located in different locations and geographies. This integration is necessary in order to optimise resources, but also provide a homogenous message to customers or groups of customers. Therefore, the IoT strategy for multi-site retailers should emphasise this integration, making it more intelligent and seamless at the same time. The set of technologies and devices necessary for that can be quite rich and diverse.
Specialist retailers include stores that concentrate on a particular type of merchandise rather than everyday items most people would buy from conventional high street stores. Examples include specialist sportswear such as mountaineering gear, hobby retailers, craft shops, lighting shops, needlework and wool shops, boutiques. Even small businesses of this type increasingly need to have on-line stores and a Web site to make themselves known to the public and enable remote ordering and buying.
Here smartphones and tablets may be a useful way for customers to engage with their desired brands and as a source of information through mobile applications. Other tools for viewing the merchandise in detail include digital screens, virtual mirrors, virtual tables, virtual mannequins, augmented reality and mobile applications on tablets. Online price comparison sites may also be useful to help customers evaluate and choose prior to buying.
The IoT technologies of relevance for specialists are similar to those utilised by multi-site retailers. However, the degree of complexity of specialist retailers is not the same because they are small in size and strongly specialised. However, being cutting-edge in terms of technology adoption is a key competitive advantage for those types of retailers. Therefore, in terms of IoT strategy, they want to transform their stores into smart spaces, integrating those with the on-line channels, and have a clearview on the production value-chain in order to ensure high quality products.
Developing new IoT strategies in retail
Conference organiser Vinelake has created a unique event where retailers can learn from each other and from retailing experts what IoT has to offer for their businesses. This is being held on February 9-10 in UK (follow this link for more details). Closely related to this, Beecham Research offers a range of support services to retailers large and small to help explore the issues relevant for them and how they can move forward to develop their own retail IoT strategy and implement it. For more details, e-mail email@example.com
The author of this blog is Robin Duke-Woolley, CEO, Beecham Research, London, UK.
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