According to a report published recently, retailers believe in the benefits of connected technology, but only a few firms are actually making investments.
The report, published by Retail Systems Research, claims that retailers are “overly optimistic” about the Internet of Things and the potential it offers. Entitled “The Internet of Things in Retail: Getting Beyond, it is based on a survey of 129 retail firms and investigates common trends when it comes to IoT.
It found that, overall, retailers are interested in leveraging the potential of IoT within their businesses. They identified three main areas of focus.
These include inventory visibility and accuracy, making physical stores more accessible and effective for customers, and deploying digital solutions in stores.
Companies are also looking for ways to improve engagement with customers using smartphone technology, such as developing apps, the report said.
When companies adopt IoT technology, they mostly look for ways to improve the products they sell, rather than business processes and customer service.
There are big differences between fashion and apparel retailers as well, especially with regards to their product offerings and internal systems.
Although companies are identifying the potential here, many are holding back on investing in IoT tech mainly because they don’t have the correct infrastructure.
In most cases, they’re using older systems that can’t cope with the level of demand from cutting-edge technologies. Sometimes they don’t have the money to pursue upgrades.
Decision-makers may also not believe in the possibilities of connected technology, preferring to keep older devices in place. As a result, companies can end up falling behind the crowd.
Brian Kilcourse, managing partner at RSR Research and the co-author of the report, said: “Interest in IoT is fueled by a very real and pressing problem that retailers have today.
“They have struggled to integrate the store to an otherwise 24×7 anytime/anywhere selling environment.” But this has yet to translate into significant investment by all but the most forward-thinking retailers.
Alexandra Frith, customer engagement at Retail Pro International, says that while online stores are leading the pack, connected technology can revolutionise brick and mortar retailing.
“Within retail, online sales provide headline-grabbing growth, but physical stores remain as important as ever. As such, retailers are using IoT technology to push in-store boundaries on a number of fronts,” she said.
“One great practical example of this is the use of beacons, which can give critical visibility into shopping behaviour. Integrating customer data from all channels, they connect the dots between activity in web stores and sales floors.
“For example, Urban Outfitters implemented Google-enabled beacons in a concept store, using multi-source data to personalise beacon notifications. Opted-in shoppers get personalised offers informed by retailer data, and guidance to particular items in the store.
“It’s not all about online: physical stores remain a crucial element in retail success. Using IoT to push boundaries has a central role to play and should pay dividends in terms of customer loyalty and, ultimately, sales.”