The Internet of Things, and What It Does to Retail
The Internet of Things has the power to change behaviour and lifestyles, and to create value right through the economy. In retail it drives loyalty by making one-to-one, personalised service possible at scale.
On the shop floor
Sales staff with mobile devices get immediate access to a shopper's history: preferences, loyalty points, demographics. That makes a genuinely engaging experience possible, and customers get shown relevant products based on what they have bought and what they have told you they like.
In the fitting room, customers can identify and request stock from a tablet at the press of a button, and 3D sensors behind the mirrors let them select, model, style and fit clothing and accessories.
Staff can take payment anywhere in the store, which increases sell-through and gives the customer immediate service. They can arrange deliveries with mobile tracking at the point of sale, so customers carry on shopping instead of carrying bags — and customers who are not worrying about bags buy more.
They can also give instant feedback on loyalty status and any discounts or rewards available, which influences the purchase decision on the spot.
Communications
The IoT creates a clean channel for reaching customers with contextual messages wherever they are, and it becomes powerful when location services identify someone within a certain distance of the store. Time-specific, personalised offers can be pushed to drive footfall when the store is quiet or during a promotion. The result is higher turnover for the retailer and genuinely relevant offers for the shopper.
Data
The IoT builds loyalty by giving access to meaningful customer and sales data, and to AI-driven analysis of it. The richness and reliability of a customer's history, put through the right analytical tools, gives an accurate read on preference and behaviour.
Collecting that data at the outset and after every sale puts retailers in a far better position to understand buying habits, optimal pricing and preferences. Three things follow:
- A customer-centric organisation, delivering instant, bespoke service and a better, more coherent, more cost-efficient experience.
- A sales assistant who is a profit centre rather than a cost centre, driving sales from the shop floor while giving genuinely valuable service.
- Switching costs. Used properly, the IoT raises store-level profitability while deepening the customer relationship, and a deep relationship is expensive to leave.