The worldwide internet of things in the retail sector was worth $31.99 billion in 2020 and is anticipated to increase at a compound annual growth rate (CAGR) of 26% between 2021 and 2028.
These numbers come as no surprise, as retailers strongly affected by the lockdown’s limitations have an even greater need for insights to stay afloat.
Much like every other industry, digital disruption has large-scale implications for the retail and the CPG sector. According to Supply Chain Survey conducted by Gartner, 59% of respondents have wholly or partially deployed IoT across their organization. The answer is not surprising considering the fact that the digital native customer is more demanding than ever before.
Make IoT Enabled Data-Driven Decisions
Data is now available in the palm of your hands, and with the advent of IoT, companies are vying to understand evolving customer behaviors with the help of all the new data that is now available to them.
Data presents businesses and marketers with opportunities to impress customers and stay ahead of their expectations. In a rapidly digitized age, it is no longer sufficient to provide the best quality products. Companies need to use available data to predict, detect, and analyze customer behavior patterns to reduce the supply-demand and experience gaps. However, for most brands, data is fragmented across siloed systems, making it difficult to do a holistic analysis across distributed business functions.
One example of this is that a customer’s experience becomes subpar if they arrive at your store for a particular product and you’re out of stock. Moreover, if that person goes to another store and finds that product there, you might just have lost a customer.
Whether you’re a retail and CPG industry leader or a newbie looking to break new grounds, you need to harness maximum value from your data. And in that quest, IoT is your knight in shining armor. From real-time notifications to promoting new products to the relevant customer, IoT significantly changes the way companies provide services, develop products and approach advertising and marketing.
IoT Use Cases in Retail & CPG
1. Predict failures ‘successfully’
Success in retail and CPG is heavily dependent on consistency in delivering quality products on time. However, machinery failure can hamper the supply chain and, subsequently, customer experience. It becomes imperative for businesses to predict any discrepancies in their machinery to prevent loss of money and time.
With IoT sensors attached to your manufacturing setup, you can now seamlessly detect changes in the factory environment. Preventive maintenance is not just an advantage but a necessity for your bottom line. With real-time IoT data, you can reduce your machine downtime by 40%. The analytical data gathered from the sensors provide a 360-degree view of your operations, improving your OEE and boosting your productivity. This is critical to identifying any abnormal energy consumption patterns, detecting faulty devices, and highlighting the under-use of factory resources.
2. Develop a frictionless distribution network
A key challenge in retail and CPG environments is the continuous improvement towards efficiency. Companies are continuously on the lookout for reducing their costs and improving productivity.
IoT sensors enable you to monitor your products throughout the entire supply chain. According to a survey, 74% of businesses that initiated sensor-based logistics witnessed an increase in revenue. By seamlessly locating any item within the supply chain, IoT makes the invisible visible. Companies make use of the RFID tags across plants and warehouses to give managers real-time access to the information regarding the flow of materials. With convenient tracking, you can determine the safety of your materials and their timely delivery. Hands-on data allows you to effortlessly make your transport logistics more efficient and reduce product damage. Eventually, you impress your customer with consistent quality. And isn’t that always the end goal?
3. Make Your Stores ‘Smart’
We live in the smart age, and your stores can’t be left behind. Technology has evolved tremendously in the last few years to understand and respond to human behavior with greater accuracy and agility. IoT is no different, with retail stores becoming automated and eventually enhancing customer experience.
For example, Amazon Go allows its customers to purchase goods using their cellphones within the physical retail space. A buyer only needs to have the Amazon Go app installed on their device, and they can buy merchandise without the hassle of cashiers or checkout lanes. With all commerce becoming omnichannel, this is the level of experience your new-age digital native customer is expecting from your brand too. Leverage IoT to deliver it.
Another crucial IoT advantage for stores is the introduction of smart shelves. These shelves use RFID tags and are equipped with weight sensors, scanning the products on display as well as on stock shelves. As a retailer, you are now instantly informed when items are running low, or there is a misplacement of items on shelves. Taking corrective action based on these insights ensures that your customer always finds your products where they expect them to.
4. Enhance your customer’s in-store experience with IoT-led insights
Did you know that 43% of customers spend more money on brands that they are loyal to? Brands are well aware of this as they continuously strive to provide their customers with the best, most hyper-personalized experiences.
Stores use IoT to set up sensors around the store that identifies buyers at various locations. For example, when a loyal customer stands near a product with their smartphone, the sensors recognize them and instantly notify them with loyalty discounts. Leading US department store chain Macy’s implements Beacon technology to detect a customer’s precise location within store premises and send offers on their smartphones. Once a buyer downloads the Macy’s app, they simultaneously receive discount coupons and rewards within a store near their location. By tailoring discounts using IoT, retailers can improve their conversion rates at a greater pace.
The retail and CPG sector still has a long way to go to reap the full benefits of implementing IoT. Nonetheless, the landscape is changing with IoT paving the way for a more robust digital-supply chain, lowered production costs, reduced wastages and uplifting the buyer journey.
5. Smart Manage your Assets with Digital Twins
Asset Intelligence focuses on creating and managing an accurate, real-time inventory of all assets:
Acuvate’s Holistic IoT to the Rescue: Maintaining Hygiene and Preventing Food Wastage for a US Retail Giant
Acuvate’s intelligent IoT created a platform for the retail chain to log in, monitor and predict alarms in real-time, hassle-free. The end-user receives a centralized view of all data across various branches throughout the country.
With optimal temperature management and preventive maintenance features, failures are detected even before they occur, and food wastage is avoided.
IoT has transformed into a cost-effective route for many retailers and CPG giants in recent years. Stores are becoming smart and delivering a unified customer experience with hands-on data. After all, the most significant business benefits come from data, not technology alone.
Retailers benefit from IoT in various ways, including obtaining useful information, real-time reporting, and continual monitoring. This may help them improve their clients’ experience and increase their earnings.
If you want to leverage IoT and have an IoT software development project in mind reach out to us at Acuvate and make the most of your customer data. Move forward with the times. Enhance your in-store experience and gain your customer’s loyalty without a hitch.