David Eden, chief innovation officer at Tata Communications, discusses how, in the age of omni-channel retail, retailers use IoT to deliver the ultimate connected shopping experience
The success of Black Friday as the number one date in the shopping calendar is one of the reasons we see less speculation surrounding the death of the high street than we did in 2012 when smartphone ownership tripled. Shopping that required moving about looked set to become a distant memory.
While we have seen examples of some high street retailers closing their doors for good, such as Blockbuster and Comet, bricks and mortar retailers have upped their game and are using technology to their advantage.
This month saw Amazon, the original nemesis of the high street, open its first-ever physical bookstore at University Village, Seattle, after 20 years of selling online only. So, in the age of omni-channel retail, how can retailers use the Internet of Things (IoT) to deliver the ultimate connected shopping experience and gain an advantage at the most competitive time of year?
Keeping things moving
When demand on stock is at its highest, the grip over supply chains needs to be at its tightest. Poor stock and supply chain management leads to customers being frustrated by empty shelves and limited choice – the perfect enticement to try an alternative outlet that can better serve their needs.
Accurate supply chain planning relies on data-driven decision making, which is increasingly generated by connected IoT devices. Capturing and analysing data such as the amount of stock being produced in warehouses, the demand at each outlet, and the time required to get product from the production line to the shelves into one place, is invaluable for supply chain managers.
Using telematics data collected from vehicles in the distribution fleets, logistics managers can see where cargo is and when it will reach its destination. Furthermore, RFID-enabled sensors on products enable advanced product tracking through every stage of the supply chain, giving supply chain managers a micro view of the situation as well as the big picture.
To complete the connected supply chain, in-store IoT connects the front and back of house. We’re all familiar with choosing a shoe from the shelf, asking the assistant if we can try a pair for size, and waiting 10 minutes before he/she returns to say: “We don’t have that size but we have a pair in a different size or in a colour you didn’t ask for.”
Connected customer experiences give the shop floor assistant a live inventory application hosted on a smartphone or tablet, so they can tell you instantly what stock is available and even send a message to request the correct pair is brought out for you to try.
At the point of sale, the live inventory is automatically updated when it receives a message from the checkout transaction. For example, if I buy the pair of shoes, that serial number will be deducted from the store inventory. Using this system, the inventory of each store, as well as distribution centres for products sold online, provides a clear picture of what products were selling best, where, and where supply is needed to meet demand – key information for the supply chain management team. This smarter approach to stock management helps prevent the disappointment of ‘out of stock’ messages online or empty shelves in-store during peak shopping periods such as Black Friday.
Smarter shops, smarter shopping
One of the weapons in an online retailer’s arsenal that bricks and mortar stores struggle to compete with, is the ability to collect and use customer data to target them with deals based on their age, gender, interests, purchasing history and time of year.
In order to deliver a true omni-channel experience, retailers are introducing new technologies that were once exclusive to ecommerce, to entice high street shoppers to their stores and improve their experience when they’ve entered them. John Lewis (in the UK), often synonymous with great customer service, is one retailer that has developed elegant ways of combining the offline and online world. It’s Click and Collect experience, launched in 2008, where customers can order any item online to be delivered to their nearest store free of charge, has proven so popular that it was recently announced the service would be charged for.
Location-based mobile marketing is becoming a powerful tool for retailers. Catalogue retailer Argos’ app tells you the stock levels at the store you are planning to visit to avoid disappointment when you get there and give you the chance to find an alternative store or order online if stocks are depleted.
Meanwhile, BMW Group Research and Technology is looking to combine the future connected car with high street shopping, finding ways of allowing retailers to target drivers with tailored offerings based on their proximity to local stores through car computer systems.
Marrying the offline and online retail experience, therefore, requires communications between stock-rooms, transactions, warehouses and distribution centres and consumers’ mobile devices, vehicles and eyeballs to be occurring all the time.
For this process to provide the seamless interactional experience with retail brands on any channel, at any time, particularly at the busiest time of year, the infrastructure underpinning the IoT, Wi-Fi and mobile messaging ecosystem needs to match the intelligence and sophistication of the systems involved.
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