Top Use Cases of IoT in Retail Industry

IoT or Internet of Things refers to interconnected devices embedded with software and sensors that enable such devices to share data. The technology allows data sharing from a vast network of devices leading to opportunities for automated and efficient systems.

IoT is one of the prevalent technologies of the 21st century. Using low-cost computing, cloud computing, big data, analytics and mobile technologies, IoT can collect and share data between connected devices or things. This has made continuous and seamless communication a reality between people, processes and things. IoT enables retailers to engage with customers and businesses and gain insight into products, product performance and product engagement. IoT-enabled brick-and-mortar shops have found new ways to compete with their online competitors by engaging with customers in different ways and improving customer experience.

IoT devices can track customer preferences, analyze buying habits and share relevant information to create personalized sales strategies. This can help companies develop new products and keep customers updated for new products, delivery status, etc.

• There will be an estimated 25.4 billion IoT devices by 2030.
• IoT spending was USD 749 billion in 2020 and is expected to grow to USD 1.1 trillion by 2023.
• The IoT market is worth approximately USD 800 billion and expected to grow at a CAGR of 13% to almost USD 1.1 trillion by 2024.

Use Cases of IoT in Retail

• Facility management - IoT sensors provide a complete 360 degrees view in facility management. IoT can help reduce operational expenses and ensure sustainability by optimizing energy management using sensors that monitor temperature, lighting, ventilation and refrigeration. Metrics from critical data can be used to identify key energy consumption drivers while providing a 360-degree view for consumption patterns, abnormality, underuse, over use or wastage of any infrastructure or resources.
• Traffic control - IoT can help track the number of persons entering a facility. This has been especially useful during the Covid-19 pandemic, helping ensure no overcrowding. IoT can provide vital data on store traffic, traffic patterns and customers' time in particular areas within the retail store. Product placement strategies, guided selling, effective display setups, layouts and space management can be efficiently planned using the data collected using IoT sensors.
• Supply chain - IoT offers inventory visibility in an unprecedented way across shelves, warehouses and transit. Such visibility helps retailers increase efficiency, reduce costs, and provide a superior customer experience. IoT sensors can stream consistent and seamless data to give real-time information like stock movement, vehicle movement, etc. It helps identify bottlenecks and helps in contingency planning while reducing handling times and ensuring efficient material processing. It helps in forecasting stock requirements for vendors and customers.
• Asset tracking - Asset tracking becomes simple using IoT. Assets like shopping carts and shopping baskets can be fitted with IoT sensors that transmit the location of these assets, making retrieval easy. IoT sensors can lock carts if they are taken out of a particular area or restrict their movement to a certain defined area only. The revenue generated by Asset monitoring and tracking in 2022 was approximately USD 17.2 billion which is expected to touch USD 37.7 billion by 2030.
• Personalized shopping - IoT devices can be used to personalize customer experience. Bluetooth beacons send personalized real-time alerts to phones when customers are near an aisle or a store. Such personalized alerts prompt customers to check and take advantage of the offers by coming into the store or looking at particular aisle areas and taking advantage of such offers. Consumer media and interconnected devices revenue was approximately USD 101.8 billion in 2022 and is estimated to reach USD 203.1 billion in 2030. IoT-based beacons can help target, collect user data and send hyper-personalized content to customers.
• Smart shelves - Smart shelves offer another example of innovative IoT use cases. Refiling products and ensuring that the correct items are placed on the right shelves is time-consuming. Weight sensors and RFID tags can alert the staff when the stock at a particular shelf is running low or placed incorrectly, helping save time and eliminating errors.

In conclusion, IoT in retail is a boon for the retailing industry. Retailers can use these new technologies to revolutionize the sector better. Digital transformation of brick-and-mortar stores using IoT is not new but has gained traction over time. With every industry wanting to improve its services and facilities and trying to stay ahead of the competition, digitalization in retail is playing a big role in this transformation. IoT devices have enabled enhanced data collection, generated data-driven customer insights, enabled better customer experience, and increased profits while increasing productivity.