The Internet of Things promises to transform the ways retailers interact with customers, delivering a truly connected, omnichannel customer experience.
That’s good because that’s what consumers have come to expect. They want a seamless shopping experience across venues – brick-and-mortar store, e-commerce site, a mobile app, and even via texting.
IoT technologies offer an almost endless capacity for transforming the retail consumer experience. By aligning online and in-store strategies, retailers are delivering omnichannel commerce by consistent and connected experience across all consumer touchpoints. Here are four ways this is happening:
1. Streamlining Checkout at the Brick-and-Mortar Store
Abandoned carts are a common problem: Forty-one percent of shoppers have abandoned a purchase due to long checkout lines, according to Retail Insights. An in-store app could identify long wait times at certain store locations and send customers notifications before they get frustrated, says Bill Chamberlin, principal analyst for IBM Market Research.
Prompt payment options can also solve this problem, and IoT makes this possible. Walmart is testing this in the lawn and garden centers of more than 350 stores. When shoppers are ready to pay, associates anywhere in the area can scan items with the Check Out With Me device, swipe the credit card and provide a printed or digital receipt, reports Supermarket News. No need to go to the register.
Amazon Go stores take it to the next level. Checkout is automatic. Computer vision, sensor fusion, and predictive models trained on a user’s purchase patterns are combined to make accurate “guesses” about which products a customer is purchasing. Amazon Go customers place items in their baskets and simply walk out of the store when they finish shopping. These same sensors address the costly challenge of loss prevention, tracking items picked through to “checkout.”
Kroger’s version, Scan, Bag, Go, is live in more than 400 stores. Walmart offers Mobile Express Scan & Go in all Sam’s stores, but shelved the service in its regular stores, according to Supermarket News.
2. Creating a Hyper-personalized Experience
As they become more streamlined, the brick-and-mortar stores will become more personalized. As the World Economic Forum’s Future of Retail report explained back in 2016, retailers will focus on high-touch, personalized services and experiences that require high levels of interaction with products and staff.
“Tomorrow’s physical stores will offer rich, dynamic interactions and virtual experiences. They will become more like media platforms or flagship showrooms where consumers go to interact with products and expect hyper-personalized services.”
An oft-cited example is fashion retailer Rebecca Minkoff, which has been doing some version of this since 2014. Via a digitized mirror, shoppers pick out the items they want to try on; when they are delivered to their dressing room, a personal stylist texts the customer. The screens offer styling advice and even let the customer ask for a drink or a sales associate.
In the fitting room, connected mirrors recognize the clothing the customer has brought in, and she can use the displays to browse and order different styles or sizes. That is, as Engadget puts it, “quite handy when you're semi-naked in the dressing room.”
This sort of personalization is just the beginning. According to Total Retail,“Retail stores will start serving more as gathering locations for customers to experience their favorite brands together. Think about Apple’s retail stores, but taken to the next level. Retailers have the opportunity to localize experiences to specific countries, regions, cities and even neighborhoods to provide customers the opportunity to interact in a personal way with the brands and their communities.”
3. Literally Mapping the Customer’s Journey
Just last month, Tommy Hilfiger announced plans for chip-embedded clothing. With what appears to be a nod to Pokémon Go, customers can earn points for wearing its clothes at specific locations, AdWeek reports. This allows the brand to understand how the consumer truly uses the product after it leaves the store.
Earlier this year, L.L. Bean announced – then canceled – a similar effort that married IoT to blockchain technology, according to The Wall Street Journal. The retailer had planned to launch a line of coats and boots with embedded sensors that would transmit customer data to a public Ethereum platform. (There was no game or reward element.) The company faced a considerable backlash.
Retailers have talked about the customer’s journey for decades. But now, “journey” isn’t just a metaphor. Digital sensors will enable these personalized shopping experiences for their customers wherever they are in the store – and in some cases after they leave.
For example, custom iBeacon sensors, or a clever combination of computer vision and the existing security cameras could map customer traffic patterns through a store, according to Fast Company. This provides valuable information about how consumers use the space and the actual path they take from store entry to point of sale. This data, in turn, allows the retailer to customize the experience even further. For example, retailers can use this tracking data to send targeted coupons, discount codes and messages to shoppers’ smartphones.
Customers could also summon help as needed. “Retailers are increasingly exploring use cases that involve allowing customers to summon help in a store by pressing a button in an app, rather than finding a call station somewhere in the store,” Nikki Baird, VP of retail innovation at Aptos, writes in Forbes. “It’s the kind of value for which consumers will gladly give up their location in the store, and tracking employees helps retailers understand utilization – how much time are employees really spending helping customers vs. doing operational tasks in the store?”
Of course, this same technology could deploy associates as needed. If a customer lingers in one area, the system can send an associate to help. That data can also be used to analyze that information later – perhaps to redesign store layouts for more efficient customer visits, according to Dan Mitchell, business director, retail, and CPG industry practice at SAS.
4. Bringing it Home
Perhaps the most obvious example of how IoT is transforming retail is the simplest – auto-replenishment. Amazon, of course, leads the way, with connected home products such as Echo, Dash, and visual wardrobe consultant Echo Look, all of which allow shoppers to easily order new products just by asking–or in the case of Dash, pressing a button. (Dash has been around since 2016.) HP, Staples, Walmart, and others are already testing such services.
Walmart is also testing new delivery ideas with August Home, which makes smart locks and smart home accessories. The customer can place a food order online and have it delivered – inside their home – while he or she is out. Not only is the food delivered, but it’s put away. (For now, the plan is to have humans deliver and stock the refrigerator.)
Next up: Omitting the human ordering. Your refrigerator could connect directly with the retailer, ordering the food much the way a printer “orders” its own ink. It’s not just the fridge: Sensors on pantries, or on the products themselves, could automatically re-order groceries when needed. Combining this information with machine learning models that learn from a customer’s behavior could provide a very seamless experience.
Sound far-fetched? It’s not. In 2017, Amazon published a patent application for a refrigerator with, in effect, a sense of smell to detect spoiling food, according to CB Insights. This could be combined with visual sensors – the retailer has already filed a patent to install cameras inside refrigerators.
At least one version of this is already here: Bud Light's e-refrigerator for the workplace. Online liquor store Drizly partnered with Anheuser-Busch to launch an Office Bud e-fridge. The fridges have smart sensors that sync up to WiFi to automatically re-order beer through Drizly when the stock is running low, The Spoon reports. (Of course, there’s a huge bug: You’re limited to Anheuser-Busch products. But still…)
We aren’t going to keep you supplied in beer, but if you want to learn how to wow your customers with IoT applications, let us know.