Mastering IoT in retail is a complicated puzzle, often requiring not only hardware and/or beacon installation, but also software data kits (SDK), data analytics, and customer permissions. Although the challenges are aplenty, they’re not insurmountable. At least that’s what Juniper Research is banking on in its recent predictions for a booming IoT retail market.
According to its report, The Internet of Things: Consumer, Industrial & Public Services 2015-2020, by 2020, retailers will spend $2.5 billion in hardware and installation costs to capitalize on the IoT, a 4x increase over its estimated $670 million spend in 2015. Their estimate includes both beacons and RFID tag costs. Retail’s commitment to IoT innovation will contribute to the growth of non-consumer IoT device share too, with Juniper Research also projecting 70% of IoT devices to be commercial in nature by 2020.
It’s no secret that retailers are facing a hefty price tag when looking to create programs centered on wearable technologies, connected devices, and in-store GPS and NFC technologies. But, the potential benefits are vast and yet untapped by many marketers:
- Provide consumers contextually relevant information and promotions, based on their location in-store and (if connected to a predictive analytics strategy and software) past purchase behavior. This contributes to a more relevant and valuable customer experience for shoppers.
- Enhanced visibility of highly trafficked, and avoided, areas of the store, useful for mapping end-cap promotions, signage, and staffing during heavy sales periods. The latter contributes to richer customer service programs that benefit shoppers while deploying the most cost-efficient amount of resources.
- Real-time, “smart” inventory tracking and even dynamic pricing based on stock levels and online pricing, as reported by Juniper Research. We’ve written about RFID’s potential in a similar context within healthcare environments, too. Target and Zara have been experimenting with RFID technology over the past year.
- Additional data collection to provide a 360-degree view of customer behavior, linking online and offline paths to purchase by connecting consumer data via unique identifier. This is a bit more advanced, but possible using customer log-in or loyalty data.
One company attempting to ease the hardware + software burden for retailers is Estimote. They’ve recently launched a new indoor location system that uses what they’ve dubbed “Nearables” paired with standard beacon technology and app install to triangulate the location of in-store shoppers (see image below).
Marketers simply stick Nearables on various structures within the store and, when users have the app running in the forefront (background capabilities are in the works), retailers are privy to a world of data on foot traffic uploaded to the cloud for analysis. Nearables can also be tracked on the app, allowing users to search out specific departments, promotions, and products with ease. Users can track other friends using the app, too.
Estimote’s Nearables and associated data emporium signal the continued evolution and convergence of IoT, mobile, location intelligence, and real-time marketing – all of which are necessary pieces to complete the data science puzzle and deliver contextually relevant experiences. All the while, these solutions hinge on one important requirement: customer installation of applications and a willingness to dispense data for commercial use. Evolution must occur in data privacy standards in tandem with technological advancements, or we’re left with plenty of bright, shiny objects, but no one to use them.