The Internet of Things (IOT) is now a reality across every business sector, as savvy operators discover increasingly innovative and efficient ways to organise, communicate and sell via networked physical devices.
But while IOT is beginning to have a big impact in areas where competition is intense, the reality is that its maturity and use cases vary from sector to sector. Let’s take a look at some of the verticals at the forefront of IOT innovation, to see how they are enhancing the customer experience through greater connectivity:
Retail as a whole is an early adopter of IOT opportunities; Juniper Research forecasts that retailers will connect 12.5 billion assets to IOT platforms by 2021. And the fashion sector is helping to lead the charge.
As far back as 2013, teamLabHanger created a system displaying virtual mannequins, triggered by the removal of a garment from the in-store rack.
Since then, we’ve seen a number of IOT innovations among big name fashion retailers, including beacon technology projects by – Ted Baker, Oasis, Jaeger and House of Fraser, while Superdry has pioneered a ‘smart mirror’, installed in its Berlin store, which uses body tracking technology to capture the movement of the user, and lets them sample a range of virtual garments on screen. In addition, American Apparel has employed the visualisation potential of augmented reality at its point of sale, and Topshop has live streamed fashion shows in-store via virtual reality headsets.
IOT has also been used in fashion to enhance staff performance – for example, in 2015, Target offered its 335,000 US employees Fitbit trackers to monitor their fitness, and, ultimately, improve productivity.
These initiatives show the varied potential of IOT connectivity in fashion, all united around one theme: engagement.
In a world of instant online access and tech-first consumers, the Internet of Things is bringing digital into the physical retail space, to interact with shoppers on multiple levels, and provide them with a ‘best of all channels’ experience.
Like fashion, IOT enablement is allowing grocery retailers to reach the customer in new ways. Carrefour has invested heavily in beacon technology, welcoming shoppers to their stores, pushing marketing offers based on their location, and tailoring incentives around previous purchasing activity.
The Internet of Things is also having a significant impact on business operations. Some large grocers have discovered the benefits of IOT in improving operational efficiencies. Smart refrigerators can recognise system failures, preventing food spoilage, for example, while optimised lighting ensures that areas are dark when not in use.
IOT is also changing the game when it comes to availability, allowing supermarkets to manage stock provision more effectively. The Co-op recently invested in tools to improve its localised product ranges and increase on-shelf availability.
Grocers also need to be aware of how IOT innovations in online shopping will raise the bar on supermarket expectations – especially given the resources that Amazon is focusing on its Fresh offering, creating yet another rival in an already competitive sector.
One example of this is Ocado, which has equipped its fleet of delivery vans with IOT sensors. These log each vehicle’s location, wheel speed, engine revs, braking, fuel consumption, and cornering speed; information that is fed back into the company’s routing system, to improve speed of delivery to the customer.
Retail isn’t the only area in which IOT adoption is gathering pace. In the banking sector, larger banks have been investing heavily in the Internet of Things.
According to Tata, financial institutions are planning to spend $153.5m on IOT by 2018. Just under a third of this budget will be allocated to monitoring products and services, and another third for engaging customers, via mobile apps, wearables and sensors.
One example of this is Barclays, which began trialling beacon technology in 2014, designed to make life easier for customers – particularly those with disabilities – entering each branch, offering staff personalised customer information. Other banks have used similar devices to assist queue reduction.
While use cases might not be as widespread in banking as certain retail sectors, many financial organisations are embracing digital connectivity within physical branches – creating an environment ripe for IOT investment.
For example, Raiffeisenlandesbank has installed POS televisions in its Vienna branches, targeting customers with specific product information and messages from the bank’s partners. Commerzbank has also pursued this route, introducing tablets and touch screens to encourage customer interactions.
With the security and ergonomics of in-branch technology constantly improving, there is less requirement for human interaction and greater opportunity for delivering a personalised service via digital connectivity.
With communications networks at the heart of their business, it seems only natural that telecoms companies are among the initial pioneers of IOT’s power. And, as with other sectors, there is no ‘one size fits all’ approach to how this looks in practice.
As expected, Apple has been at the forefront of exploring the digital/physical customer relationship. The tech giant has long ensured that its mobile app and physical stores enhance one another, offering automated alerts for customers when staff or stock is available.
Other telecoms innovators include O2, which has launched a remote queuing system in 100 stores, providing accurate waiting times so customers can drop in at an appropriate time.
Additionally, Orange Belgium has enhanced 150 stores through techniques such as integrated audio players that adjust the volume of background music according to the number of visitors on the shop floor, intelligent customer referral systems to mitigate queuing, and electronic shelf labels that can dynamically change product information.
Creating an IOT strategy for your business
As these sector examples show, IOT is being increasingly utilised in every field to improve customer experience and loyalty. But the shape of that innovation, and the smart devices used to create IOT-enabled experiences, can vary greatly.
For any business, creating an effective IOT strategy rests on working with technology partners who understand your objectives, and can help you prioritise how and where to invest, to generate tangible ROI.
As IOT gathers pace, companies prepared to innovate in this area are likely to see the greatest benefit. And by working with an expert partner, businesses across retail, banking, telecoms and other sectors can intelligently develop their connected retail strategy, delivering real benefits to the end customer.