“Digital disruption—most profoundly, online shopping and smartphones—has birthed ever connected, savvy shoppers who have the globe’s grandest mall at their fingertips.”
Retailers that embrace the Internet of Things are well on the way to giving people the shopping experience they expect.
A report by enterprise-focused solutions provider Zebra Technologies said that seven out of 10 global retailers will have integrated the Internet of Things into their business practices by 2021. According to Zebra’s 2017 Retail Vision Study, retailers see the Internet of Things as an integral part of the overall customer experience, with 75% of merchants using “smart” devices to not only get people through the door but also keep them in the store.
As online shopping continues to eat into bricks-and-mortar locations, retailers must personalize or enhance a shopping experience, the report said. The integration of in-store connected devices will be one way to provide people with an improved service across the board, especially as more retailers rush to adopt the multichannel approach to customer loyalty.
Around 78% of retail decision makers said that a “seamless shopping experience” was critical in terms of attracting or retaining customers.
The report said that customer dissatisfaction often stems from advertised merchandise that is out-of-stock or products that are cheaper at other retailers. The increased use of mobile apps as in-store shopping assistants can fuel this dissatisfaction, with 80% of shoppers using a smartphone on-site to look for items and compare prices.
For the purposes of this report, Zebra surveyed almost 1,700 decision makers across a variety of retail sectors.
The majority of people had either integrated the Internet of Things into their business practices or had plans to do so in the near future. Around 96% of retail decision makers were ready to make the changes required to “heighten merchandise visibility,” with 67% of people already using aspects of the Internet of Things as a way to heighten the customer shopping experience.
“The shift to IoT technologies is an industry imperative to keep step with the shopping habits and expectations of consumers reshaped by the tech revolution that’s still unfurling,” said Zebra. “Digital disruption—most profoundly, online shopping and smartphones—has birthed ever connected, savvy shoppers who have the globe’s grandest mall at their fingertips.”
The Seamless Shopping Experience Is The Holy Grail
As you might expect from a study conducted by a company that provides technology-centric and analytical solutions for a variety of industry sectors, the challenges faced by retailers revolve around the reinvention of existing retail operations. This reinvention was dependent on how quickly companies adapted to the demands of a connected society.
The report said that 72% of retailers planned to revamp the supply chain with real-time customer information driven by automation, sensors and analytics. At least 75% of retail decision makers said that their companies would invest in predictive analytics within next four years, with the aim being to improve the customer experience. By 2021,75% of retailers would know when a specific customer was in the building, thanks to micro-location technology—beacons or sensors, for example—placed throughout the store.
>Source: Zebra Technologies, 2017 Retail Vision Study
“The makeover of retail operations platforms is critical to handling the deluge of products traveling through the retail supply chain from both brick and mortar and online streams,” the report said. “It’s one that must also serve today’s multichannel shoppers and the growing appeal of click-and-collect models.”
Inventory management was (no surprises here) crucial for retailers, with automation deemed to be a key investment. Zebra cited a report from McKinsey that estimated the global cost of “inventory distortion”—overstocked items, sold-out items, shrinkage through employee theft or shoplifting etc.—to be around $1.1 trillion every year.
Around 57% of decision makers said that they planned to invest in automated processes by 2021.
Automation would help retailers to pack and ship orders, track inventory, monitor in-store inventory and assist customers. Current retail inventory accuracy is about 65%, the report said. Integrating the Internet of Things would boost inventory accuracy to 95%, allowing retailers to reduce operating costs and (in theory) increase revenue.
“Every inch of the retail industry is changing, from the aisles of the warehouse to the shelves of the store, and retailers are driving this change in a race to better serve customers,” said Zebra’s senior VP and chief marketing officer Jeff Schmitz, in a press release. “The 2017 Retail Vision Study demonstrates that retailers are poised to meet and exceed customer expectations with new levels of personalization, speed and convenience.”