3 Steps Retailers Should Take to Benefit from the Internet of Things

The rise of the Internet of Things (IoT) is an opportunity for retailers to unify physical and online customer experience strategies. Up until now, retailers have provided separate experiences through e-commerce and in-store channels because they lacked the ability to integrate the two universes effectively. This has completely changed with the rise of the Internet of Things.

To understand why, consider a personal example. My training regimen includes a run which passes through a market town in the suburbs of London. As I pass (stagger) through the main street of shops, I get notifications on my mobile phone about deals at the stores that I’m passing. These shops have employed geofences to recognize when customers are nearby and provide an offer in response. The geofence could be with any form of technology, including a Bluetooth-enabled beacon, but the point is that this is the power of the Internet of Things for retailers. With the IoT, retailers can provide real-time, contextually relevant offers in the physical world.

Fully leveraging the IoT in your retail strategy requires some work, however, which includes these three key steps:

• Figure out your business goals – The Internet of Things is on track to be a huge source of corporate spending, with one recent study finding that it will experience a compound annual growth rate of 13.6 percent between 2017 and 2022 before it reaches $1.2 trillion in 2022. With this level of spending increases in mind, retailers need to figure out what their goals are before they implement an IoT strategy. For most shop owners, what this means is determining what questions you want to know the answer to. Supermarkets, for example, would want to know which grocery store aisles I’m spending the most time in. This could result in placing beacons in the store to broadcast offers based on proximity or location in the store. They also may want permission to see what consumers have recently purchased so they can predict when they may need replacements. Although IoT is cool, you need to first figure out how to apply it to your business before rolling it out.
• Get customer permissions and clean up your customer data – The average consumer will likely have 3.4 devices connected to the internet by 2020, according to recent research. In an age of data privacy laws like the General Data Protection Regulation (GDPR), it’s imperative that you have your customer data in order and have accurately captured permissions for which messages you can provide to whom. This makes identity resolution crucial for retail brands, which must include the creation of a golden customer record that features everything knowable about a customer collected in a single location. Often this is a customer data platform (CDP), which also makes customer data accessible across the organization. This step is important because unifying customer data means you understand which interactions to provide and how customers want to receive those interactions – two vital pieces of information in an age of connected customers.
• Deploy an orchestration platform – Once your customer data is unified and accessible, you need an orchestration platform that can deliver relevant messaging to consumers via multiple channels. Installing a beacon in your store isn’t enough if you can’t leverage it as part of a coherent omnichannel strategy tying the digital and physical worlds together. The IoT is fundamentally a way to make the customer experience richer by adding nuance, which means blending your understanding of customer preferences with a solution like a customer engagement hub (CEH) that allows you to orchestrate real-time interactions across channels.

The Internet of Things is a transformative opportunity for retailers to bring the digital customer experience into the real world. To do that effectively, though, retailers need to understand what their goals are, get their customer data and preferences right, and ensure they’re able to deliver the experiences consumers expect. Retailers that succeed will ride the convergence between digital and physical retail to greater profitability.

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