The Internet of Things is jargon that has picked up a lot of steam in recent years and is often thrown around in marketing circles as the next big thing for customer engagement. But what exactly is this frequently mentioned, yet somewhat amorphous “Internet of Things?” In the simplest of terms, the Internet of Things is the development of the Internet to enhance everyday things by adding network connectivity so they can “talk” to each other – the idea that we should connect any and all electrical devices, to the extent possible, to the Internet. To picture it, imagine walking into your house. You throw your keys on the table and reach to turn on a lamp — which is connected to the Internet. Then you walk over to the washing machine to put a load of laundry in — it’s also connected to the internet. Want to brew a pot of coffee? Head over to your Internet-enabled coffee maker.
Why would you want all of those things to live on the Internet? Well, in the Internet of Things, those devices are all networked and connected, which essentially gives them the ability to have conversations about your habits. When your alarm goes off in the morning, it can tell your coffee maker to get going. When you are late heading home from work, your GPS can tell your oven to hold off on the pot roast. According to Gartner, who has done extensive research on the Internet of Things (also called the IoT, for short), the IoT grew 30% from 2015 to 2016 and is expected to reach 20.8 billion connected devices by 2020.
What does this mean for retailers?
In a world where consumers begin to use more devices connected to the IoT, retailers, naturally, must follow suit. More retailers are already looking into the IoT to enhance consumer shopping experience, with things like mobile point-of-sale devices and in-store tablets. These devices, however, are just the beginning.
What shifts can retailers expect?
Larger merchants, in particular, will likely lead the charge into the retail IoT. Bigger retailers will be looking for ways to leverage the IoT for their businesses — and it’s already beginning. Smart Lights, made with a technology by Visible Light Communication, are launching in the United States. This technology will enable retailers to pinpoint a customer’s location in-store and offer deals on items they might already have listed on their smart phone, among other things.
Retailers are also already using the IoT behind the scenes. For example, some retailers are setting up their supply chains to utilize the IoT, resulting in up-to-the-minute product tracking and availability information. This doesn’t just benefit the retailer on the backend, it benefits the customer as well. Consumers in the Internet age want to exactly know where their products are and how quickly they can get them. An IoT-powered supply chain makes this a reality.
These ideas are just the beginning for the IoT. Everything from vending machines to mirrors will soon be connected the IoT and will slowly but surely be changing the face of retail.
How will the IoT look going forward?
These shifts are expected but it doesn’t mean the IoT will continue to look exactly the way it is projected to. Over the past several years, although it seemed more likely that the IoT would change mostly consumers’ personal purchases, with things like connected displays utilizing video to educate consumers on their products, the IoT is dramatically changing the shopping experience as a whole.
Home replenishment, for example, is something that could only have been imagined a few years ago. Now, big names like Amazon are letting customers simply push a button to get their items delivered. Virtual reality for consumers is another big element of retail IoT. Remember the buzz over Google glass, Google’s “second screen” eyeglasses-like headset launched in 2012? That was just the beginning.
Not only that, The IoT might also be able to retrieve a chunk of the in-store retail sales revenue that’s been lost to e-commerce over the past several years. An in-store experience that can’t be beat because of efficiency and personalization will begin to attract consumers in ways that a laptop purchase can’t.
As it has over the past several years, the IoT will continue to evolve, creating new opportunities to engage with their customers in better, more efficient ways, and retailers would do well to keep an eye on this progress.