Modernizing the Brick-and-Mortar Retail Experience with IoT Data
By Paul Merritt
Industry Director for Retail, Lexmark
2023 will be the year of lurking threats for the retail industry, with a potential recession impacting the supply chain, demand, hiring and customer engagement. Many are turning to new technologies and smart retail solutions as the answer, the most promising of the bunch being the Internet of Things (IoT).
Many retailers are already on board. Approximately 58% of retail companies have active IoT projects in their pipeline. The market size for IoT in retail worldwide is projected to reach $178 billion by 2031.
The key to unlocking new, innovative ways to engage with customers is combining historical and real-time information to create a window of opportunity.
The most significant need IoT can fulfill is modernizing the brick-and-mortar store experience. With IoT, it’s possible to mimic the high personalization and sophisticated care present during the online shopping experience.
The data generated by sensors and cameras capture the raw analytics of every facet of the physical store experience. IoT can then turn that data into insights that can be acted upon quickly—to streamline the checkout line, better place signage, and ease the workload for employees. The right IoT platform can also interconnect with e-commerce for a seamless shopping experience, boosting both the physical and digital storefront.
Retailers Already Have an IoT Head Start
Smart Retail and IoT in the Store
The first step to implementing IoT, or Smart Retail solutions, in-store is easier than retailers may think, as many have the foundation already set through existing hardware. One example of this is security cameras. Nearly all brick-and-mortar stores have cameras set up to monitor for theft and safeguard customers, but these cameras can be used for more than just security. They can also be retrofitted with an IoT “eye” to capture and formulate store operations as they are happening. This can help inform optimal store layout, monitor power position inventory like end caps, allow for more personalized digital signage, and better evaluate customer behavior. All of which level up to improved customer satisfaction and revenue growth.
To realize these business outcomes, retailers must consider how to act on the real-time information they collect from in-store data and connect it with historical customer information. Today retailers are making decisions that will impact future revenue and store operations based on historical buyer behavior – what you bought yesterday, last month, last year. As a result, they are making decisions by looking in the rearview mirror. The key to unlocking new, innovative ways to engage with customers is combining historical and real-time information to create a window of opportunity.
By investing in new Smart Retail solutions like IoT and greater IoT device management, brick-and-mortar retailers – from high-end fashion to furniture to grocery – can see significant, real-time improvement.
Fashion and furniture retailers have a similar sales set-up in that their associates are often commission-based. As a result, these associates need to manage any back-office tasks quickly and efficiently to be on the store floor closing deals.
By leveraging Smart Retail, retailers can streamline those administrative tasks to save associates time and collect critical metrics for store leadership to gain real-time visibility into operational efficiency and compliance.
Alternately, retailers such as grocers employ associates that are not commission based and work at an hourly rate. Leveraging Smart Retail and IoT can ensure they aren’t avoiding the storefront by taking on or spending too much time on unnecessary back-office tasks.
While the outcome may look different depending on the needs of the unique retailer, the key to successfully bridging the growing gap between the e-commerce and brick-and-mortar experience lies in transformative technologies and Smart Retail solutions, like IoT.
Paul Merritt, Industry Director for Retail at Lexmark, has over 40 years of experience in the printing and imaging industry. As Industry Director for Retail, Merritt manages a team of retail industry consultants who focus on helping retail customers improve business processes via hardware, software or services solutions. From data security issues to improving store signage, Merritt and his team work to drive your retail business forward.