IoT — The New Enabler
The Internet of Things (IoT) is connecting objects and environment to people and is therefore enabling visibility and innovation while enhancing decision-making in organizations. The vast volumes of data generated by the IoT network is being leveraged to significantly transform business operations by creating new business models. The retail industry is also deftly surfing the waves of technological advances by majorly incorporating IoTs to enhance their customer experience.
The immediate and personalized online experiences have conditioned customers to expect the same from their in-store retailers. A recent study by market research company, Frost & Sullivan, reveals that poor customer experiences cost the retail industry $300 billion, annually.
Frost & Sullivan says that retailers should increase digital experiences in their physical stores by using IoTs to “sensorize” a retail environment. These IoTs relay digital information which quantify human actions and will help the retail industry to get better insights into customer behavior. This understanding will enable quick and efficient resolution of customer issues and help in delivering better value that enhances the overall customer satisfaction.
While retail organizations are employing an omnichannel strategy to cover all channels and touchpoints, they are still unable to meet customer expectations as this is a siloed approach where the different channels and touchpoints do not overlap or converge. By using IoT, organizations can converge all the different channels and leverage the data collected to deliver more personalized customer experiences which are continuous, predictive, and productive.
“IoT enables organizations to collect vast amount of customer data in real time, and leveraging analytics to drive valuable insights for targeted engagement, proactive services, improving loyalty and trust,” says Sapana Maheira, analyst, Digital Transformation, Asia Pacific, Frost & Sullivan. “This helps them to determine the intention and subconscious state of a customer’s mind.”
The digitization or the incorporation of digital experiences is a two-part journey which helps to create a “smart retail” experience. The first part focuses of increasing the “digital awareness” about the customer by collecting data about how customers behave in the store and how they interact with various products. This data provides insight into customer behavior, the store and the products, which then helps make decisions about offers, visual merchandising, store layout and manpower optimization.
Once the store has data about their customer, they can then move on to the next step, which is to improve the customer engagement through “digital immersion” by providing an interactive experience coupled with data-based contextual and personalized suggestions and advice which influence customer buying behavior.
“Developing smart retail is a journey” notes Kenny Yeo, senior industry analyst, Digital Transformation, Asia Pacific, Frost & Sullivan. “Retailers can start with designing a roadmap to formulate a strategy from digital awareness to digital immersion as they evolve from understanding their customers to better engagement with them for customer loyalty and advocacy.”
But, smart retail and an effective customer experience will be useless if the IoT devices are not secure. The biggest problem faced by the IoT industry is the non-inclusion of security in the design stage. The lack of cyber security professionals who are adequately skilled is another problem faced by this industry. These two problems may adversely affect the adoption of inadequately secure IoT devices and hence the digital transformation strategies. of retailers.
“Without recognizing the need to invest in security and having the right technology, processes and people in place, organizations will not have a secure foundation to thrive in their digital initiatives,” says Charles Lim, industry principal, Cyber Security Practice, Frost & Sullivan.