IoT in retail creates as many problems as possibilities

IoT in retail creates as many problems as possibilities

IoT Tech Expo: IoT in retail creates as many problems as possibilities
IoT Tech Expo: IoT in retail creates as many problems as possibilities

At yesterday’s IoT Tech Expo in London Internet of Business heard a panel of retail and IoT experts explain the challenges created by a technology that has brought retailers closer to their consumers.

Key questions put to the panel touched upon how the Internet of Things (IoT) can create a direct channel between retailers and consumers, how IoT data streams can inform the consumer relationship, and whether, ultimately, retailers will be led to design their own IoT products in future.

Interestingly, the panelists explained that while IoT opens up a whole host of opportunities for retailers, it also comes with significant challenges, notably how retailers cope with direct interaction with the customer, which some have never experienced before, and how can they make that interaction relevant?

Keeping the conversation flowing

Michele Mackenzie, principal analyst at Analysys Mason and moderator of this session, asked the panel ‘how can IoT create a direct brand-consumer channel?’

David Bunch, global VP at Shell Retail Marketing, was quick to point out that “IoT brings that customer relationship so much closer [than before]”, meaning retailers are now directly accountable to consumers in ways which haven’t previously existed.

While Bunch suggested that this presents an opportunity to open up a significant dialogue with consumers, and consequently build a long-lasting relationship, Carl Uminski, COO of Somo, emphasized the pressures that come with this dialogue.

“The main challenge is for huge companies who have been around for years and have never spoken directly to consumers,” he said.

Uminski believes that the IoT and mobile have created a minute-by-minute dialogue between consumers and brands due to the expansion of devices like wearables, and, for him, the “hardest thing is organizationally how do you talk to a customer every single day?”

Related: Thomas Pink to exploit IoT in its New York store

Making the most of data streams

To survive this rapid, non-stop “dialogue”, brands must make better use of the data streams at their disposal, not only the new ones created by IoT, according to Paul Winsor, director industry solutions at Qlik.

“It’s not about volumes of data it’s about the combinations of data,” he suggested. To get the most out of IoT, retailers have to “Take IoT data and look at it across other data sources.”

He used the example of a retailer that knows how long a consumer has been in store due to monitoring when they enter through thermal sensors (the IoT data stream), but that can’t get anything useful from that data until they are combined with traditional data stores, such as a point of sale. By combining both streams, a retailer can see that between 10am and 12pm X number of people came into the store, but only Y actually made a transaction, suggesting a problem lowering this conversion.

This kind of data combination can be used to highlight potential flaws in the conversation between brands and consumers.

Staying relevant

While cross-examination of data is useful, retailers also need to gain a better understanding of their customers wants and needs so that they can stay relevant during the conversation.

Winsor believes they need to try and understand consumers across all platforms. “We’re all expecting to have a digital dialogue when we walk into the store, but the danger for retailers is they that they get that wrong,” he said.

Amazon has long used algorithms to predict what consumers might like to buy next online based on previous purchases – with varying degrees of success – but applying that principal to the physical store is not as simple.

Winsor says this kind of targeting is now expected by consumers in-store, but warns that if retailers do try “it better be good, and it better be relevant” otherwise they risk looking foolish.

Michael Bayler, founder of The Whole Equation, noted that this also rings true for online products where retailers typically like to advertise. He suggested that to mistake IoT for being another advertising tool would be a “terrible mistake” for brand reputation, as consumers are already pushing back on advertising. “If we see IoT as another data feed, I think we’re on a hiding to nowhere.”

Related: Target opens pop-up smart home store to promote IoT technologies

Still a slow burn for retail

IoB heard recently that IoT in retail is still a slow burn, a fact that was apparent during this panel due to the potential pitfalls it creates for retailers. Very few examples of successful adoption of IoT in this market were referenced, and those that were given typically concerned Amazon’s Go, Dash or Echo.

“It feels like everything is possible but nothing is very clear”

For Bayler, this is partly because the IoT opportunity in retail “feels like everything is possible but nothing is very clear.”

He suggested the situation is a bit like chicken and egg, where retailers can see the potential for growth through IoT but the outcome of that remains vague.

Perhaps, then, retailers are better off creating their own products? Nick Lansley, an IoB Insider and retail consultant, believes some will certainly do this. He also suggested that retailers should take up partnerships with third parties to build services onto their products, as we have seen with the Amazon Echo and the likes of Hive.

However, as one audience member pointed out, with technology giants like Intel and Samsung continuing to innovate in this space, retailers are under immense pressure to act on IoT and fast. Knowing the best way to approach it is half the problem.


The Internet of Things possesses the ability to greatly enhance the ways in which retailers are engaging with their customers. Advanced beacon, RFID, sensor, AI, VR and wearable technologies are offering new ways to improve loyalty and increase revenue. However, disassociation between the business and digital sides of companies coupled with previous project failures and negative consumer feedback is placing strain on new IoT projects.

This 2nd Annual Internet of Retail event will present case studies from some of the world’s leading retailers who have overcome implementation pitfalls and are successfully harnessing IoT to heighten the customer journey. This event will provide retailers that are looking to adopt IoT but don’t know how a chance to see how others have done it, and how they too can benefit.