How the Internet of Things Will Change Shopping Forever

By Roberto Ugo — February 18, 2016

The Internet of Things is expanding, and it’s going to bring about a revolution. While it’s still a few years away from mainstream adoption, its impact on the retail world has already begun.
 
Many retail businesses have taken the first steps in implementing this new technological worldview with great success. The first wave came in supporting intelligent business operation and back-office work, but there’s now more businesses using beacon and Wi-Fi tracking technology to collect data in stores — feeding predictive and real-time analytics engines to inform even the most basic daily operations.
 
Brick-and-mortar retail is all about serving the customer in a physical space. Both of these elements — the customer experience and the space itself — will soon be transformed by this emerging technology.
 
Rethinking the Physical Layout
 
Stores are often at a disadvantage compared to their online competitors. While it’s easy to capture information from online shoppers about what products interest them, what items they're putting in their carts, and what they ultimately buy, Main Street retailers have only ever had point-of-sale data to work with.
 
But with GSM or Wi-Fi tracking, retailers can gather information about where customers walk, what they stop to peruse, and what goes into their carts. This information can be used to optimize store layout and increase traffic to certain areas. This is a tactic retailers like Nordstrom have tried and abandoned, while others like Cabela’s and Family Dollar have found it exceedingly useful.
 
Another development causing retailers to rethink their space is RFID technology. This features a barcode that uses radio waves to scan items from a distance and track inventory in real time. Stores like Zara are using it to efficiently replenish stock, ensuring that store shelves never have too much or too little of any product.
 
Increasing the responsiveness of inventory makes it easier to do more sales with less floor space — another advantage for businesses facing competition online.
 
Reinventing the Customer Experience
 
Using predictive technology to build smart shelves and warehouses, it will be possible to nearly eliminate the bane of the customer experience — arriving at a store to buy a product that isn’t there.
 
In the future, however, stores will do more than sell what you want — they will be what you want. They will be able to literally transform with your presence using virtual reality, lights, or television screens. Macy’s knows what perfumes you like; what if that scent followed you through the store? The personally adapted sales floor would revive the in-store experience. 
 
Here are a few simple steps retailers can take to prepare for the possibilities offered by the Internet of Things:
 
1. Update your current IT architecture to support the coming influx of data. Data is what powers the Internet of Things, and to avoid data overflow, you’ll need to identify the most important data to collect for your business.

2. Start building a multichannel strategy that can embrace new avenues, such as user interaction in the store. All channels need to have coherent communication. Don’t start a new channel merely because you can. Not all solutions are meant for every business.

3. Be ready to act fast. You’re going to have to make decisions on the spot, so you need good business rules in place to automate as much as you can.
 
The Internet of Things will transform retail for the better, improving the physical space and optimizing the customer experience. With enough preparation, this model could mean a whole new universe for your business.
 



Roberto Ugo is co-founder and CTO of Movvo, an innovative platform that measures the flow of people in physical spaces and helps retailers enhance customers’ shopping experiences. Ugo specialized in business data networks and e-commerce at Boston University and the University of the West of Scotland and has an international background in engineering and computer sciences. Movvo won the first MIT Portugal Venture Competition and has offices in Portugal, Boston, and Silicon Valley.

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