In today’s increasingly connected world, the potential for innovation is limitless.
For many organisations, the focus of this innovation is on improving the customer experience. And nowhere is that focus more apparent than in the retail industry, where growing adoption of the internet of Things (IoT) is revolutionising shopping as we previously knew it.
In simple terms, the internet of Things can be defined as a network (or network of networks) that aggregates and connects uniquely identifiable endpoints, devices, or “things” (both wired or wireless) that communicate autonomously using IP connectivity.
Included within this definition of IoT are smart wearables that operate autonomously, with this autonomy of operation being a key component of IoT that would exclude many other wearables.
At this point, it is worth noting that IoT is not to be confused with machine to machine (M2M), which is a precursor to — and subset of — IoT.
While M2M could once be thought to have represented what IoT has become, the IoT ecosystem intelligently connects, manages, and transmits very large amounts of data across applications, platforms, and systems, far surpassing what the network device communication capabilities of M2M were ever envisioned to be.
For retailers, IoT is taking on even greater importance as they increasingly look to sensor-enable their enterprises in a bid to capitalise on every possible signal that is available to them.
In a similar vein, automatic monitoring, sensing, and alerting solutions are rapidly gaining traction due to their undoubted ability to drive considerable productivity enhancements; but such solutions do not truly represent IoT in the technical, or most ambitious, sense of the term.
That’s because simply providing IP connectivity to an endpoint is not IoT. To qualify as such, there must be a network (or network of networks) providing connectivity between devices or endpoints that communicate and operate autonomously using IP connectivity.
It’s a subtle, but crucial, distinction to make, and a growing band of retailers are now looking to take the next step towards improving their productivity and customer experience by leveraging the industry-disrupting potential of IoT.
For most retailers, IoT refers to some form of connectivity — typically wireless — that connects things and people across the retail ecosystem to acquire, aggregate, and analyse data in order to glean actionable insights and execute on them more efficiently.
The more common use cases in retail involve connecting people (e.g., consumers, associates, and service providers) to products and product information and collecting data about consumer journeys to drive better planning (i.e., assortment, demand, and workforce), placement, and marketing. Consequently, you may hear retailers refer to initiatives such as wayfinding, consumer journey heat mapping/traffic analysis, asset tracking, sensor-enabled inventory management, or personalised interaction rather than referring directly to IoT.
‘Digital engagement’ and ‘connected customer experience’ are other popular terms used to describe these use cases; and while IoT may not yet have entered common retail parlance, it is undeniably the concept that underpins all of these transformative practices.
Retailers are certainly getting much closer to the realisation of ‘connected commerce’ as they have been working hard over the past several years to integrate applications, systems platforms, and ecosystems.
In the retail industry, omni-channel commerce investments are enabling retailers to integrate across channels to gain a single view of the customer, order, and product across channels, which is the very foundation of customer-centric retailing.
And it is now time for retailers to start looking more deeply within their enterprises to survey the opportunities for business improvement in a sensor-enabled context.
This is because the retail customer, as never before, is expecting to engage in a convenient and seamless experience, using increasingly powerful personal consumer technologies.
Retailers that are born digital are able to respond with new business models and new capabilities that cater to these expectations. However, every retailer — whether born digital or not — needs to be able to respond with the same capabilities.
Retailers that do not have these capabilities are left to flounder, and the evidence of this is clear to see in retail markets around the world where businesses that have lost touch with consumer needs are failing at an alarming rate.
Increasing productivity, automating decision making, and reallocating resources to where they can have the most impact is critical to delivering the compelling customer experience that today’s consumer demands. And it is the internet of Things that holds the key to making it all happen.
The columnist is group vice-president and regional managing director for the Middle East, Africa and Turkey at global ICT market intelligence and advisory firm International Data Corporation (IDC). He can be contacted via Twitter @JyotiIDC. Content for this week’s feature leverages global, regional, and local research studies undertaken by IDC.
