Discover the IoT Use Cases Driving Retail Innovators

The Internet of Things has massive potential for retailers to achieve better, faster or cheaper advantages. According to Retail Systems Research, “80% of retailers surveyed agree that the Internet of Things will drastically change the way companies do business in the next three years.”  An IBM article written in 2016 stated, “Analysts predict the IoT retail market to grow 20 percent to $35 billion in five years.” The potential is significant – even transformational.

Here is a list of 24 retail IoT use cases gleaned across multiple resources and my own creative thinking for Retail innovators.

Shelf to backroom storage – A connected solution can instantly notify store management of any inventory issues right away and automatically trigger a reaction to send an associate to the backroom to fill the shelves. The “last mile” is often a significant challenge for stores and certainly a missed sales opportunity if the customer can’t buy what’s missing on the shelf.

Backroom storage to warehouse – Similarly, a connected solution can notify store management of any inventory issues and automatically trigger an alert to the central warehouse to include the out of stock items on the next shipment.

Connecting e-commerce to in-store for same-day pickup – this use case requires firm control over available inventory and at which store location. Even more importantly, real-time inventory controls are required to avoid negative customer experiences. Imagine ordering online with an in-store pickup and as you arrive at the store the product was sold out. Controls are required to reserve the product to ensure it is available at pick-up.

Tracking product post-purchase for managing potential product recalls – when a recall occurs especially of a mass-market product, the faster you can identify the faulty product and communicate to the stores, the better the chances of avoiding a PR escalation and ensuring consumers are protected.

Smart shopping carts – imagine how you could help customers navigate the aisles of a sto re based on their digital shopping lists? Stores are frequently testing ways to better merchandise which places the customer experience at risk. Imagine though being able to help direct shoppers to the exact location where their products are to ensure a great experience. This is especially valuable for elderly assistance..

Recipe to digital shopping list grouped by efficient store flow – Ok this is a use case I would particularly enjoy. My family does a lot of cooking from recipes. It is a pain organizing your list based on where you’ll find each recipe ingredient within the store. It would be awesome to quickly scan, upload your grocery list and be directed in store via the shopping cart to where you’ll find each ingredient.

Omnichannel – Scanning a barcode on a garment or other product to show product information or to find other colors or sizes on the retailer’s eCommerce site.

Smart price tags – these could be changed in real time based on demand or other trends

Tracking perishables with temperature sensors – using these sensors enables retailers to regulate across their supply chain. Certain products demand a constant temperature as it traverses across the supply chain. Being able to consistently monitor the temperature can minimize spoilage and improve freshness upon arrival at its final destination for the consumer.

Reducing fraud – Whether this is from store employees stealing, shoplifters or others, there is a constant need for trying to curb items being taken out of circulation. A connected solution can monitor product flow from in-store through checkout and into the parking lot. Any skipped points would alert officials or trigger a video camera capture to identify the villain red-handed. .

Tracking spoilage and shrinkage – retailers can look to smart shelves, source-tagged SKUs and more sophisticated camera technology to track the flow of inventory in and out of store’s front door.

Heat sensors in stores – these sensors can track customer movements, which helps managers place premium products in high-traffic areas as well as eliminating unintentional barriers that prevent browsing.

Smart mirrors – connected mirrors could enable customers to “try on” different clothing virtually.

Contactless Checkout – Showcased by Amazon recently, contactless checkout by automatic scanning of product as a customer walks out of store. This would be particularly valuable in airport and convenience stores whene retailers could eliminate in-store staff and leverage a single person to manage on-shelf inventory for multiple stores.

Amazon Go Store video 

In-store promotions – access to in-store promotions when a customer is near certain products by leveraging the cellular network as well as beacons in the stores. Caution though is required. Customers don’t need more spammy notifications on their smartphones and certainly don’t want to download yet another app!

Analyze traffic and flow patterns to optimize in-store buying experiences – can help managers improve store layout and merchandise placement strategies.

Predictive equipment maintenance – this is currently being used for managing energy, predicting equipment failure or detecting other issues. For retailers, this is particularly interesting way to manage freezer temperatures to ensure food safety.

Smart food wrappers – paper-based sensors specifically for perishables that monitor the chemical composition of the ingredients to set an accurate expiration date. I wrote about paper-based IoT sensors in a recent article.

Maintenance of transport, tracking and route optimization – retailers have been using GPS to track and route trucks in the last couple of years but with IoT, they can achieve a much higher degree of accuracy on how close a pallet of merchandise is to a given store.

Connected vending machines – installing a M2M gateway inside a vending machine enables retailers to remotely manage machines and improve maintenance and logistics processes.

Smart warehouses – demand-aware warehouse fulfillment using warehouse automation and robotics plus IoT would enable a typical distribution center or warehouse that’s organized by aisles and shelves based on a fixed schematic to transition to open space where automated pallets self-organize based on real-time demand.

Instant customer service – by using connected video or Wi-Fi foot-traffic monitoring, retailers in real time, could direct an associate to help a customer.

Restaurant fraud monitoring – another fraud monitoring use case for IoT includes adding a small flow-meter device especially designed for the beer/liquor industry to be place in the tap circuit. This small electronic device sends information to feed applications and fraud systems to monitor usage.

IoT connected shelves – smart shelves can help optimize inventory according to customer preferences by store. Imagine tying this into more effective marketing programs. In addition, M2M smart shelves could check and order items from other locations when demand sparks in one location while sitting on the shelves at another.

I can only imagine how many more retail IoT use cases will emerge as more early adopters and innovators connect the dots to what’s possible. What’s equally important though is for retailers to continue to uncover and continually learn more about their buyers so that their IoT investments can add real value that strengthens loyalty, reduces costs and expands share of wallet. 

Have any IoT retail use cases not mentioned above? We’d love to list more! Add your comments below.

Also published on Medium.

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