Mobile-connected consumer behaviors are changing the rules of engagement for retailers. Juniper Research Ltd. estimates that retailers will connect 12.5 billion business assets, including products, digital signs and Bluetooth beacons, to Internet of Things (IoT) platforms by 2021, a significant increase over the number of assets connected today. According to Juniper, 2.7 billion assets were connected to IoT platforms in 2016. As to which technologies will prevail in this movement toward connectivity, radio-frequency identification (RFID) was identified as one of the top technologies expected to drive the IoT retail ecosystem in the coming years. "RFID tags, used to identify and locate retail assets in real-time, are now at a low enough price point for mass deployment and integrate well with new IoT systems and analytics," Juniper stated. "New services, such as dynamic pricing or enabling promotional offers via in-store digital signs are also poised for growth."
Another factor cited was the pivotal role of integrated systems in next-generation processes, such as personalized retail, whereby enterprise software and emerging technologies integrate with data from connected IoT assets, researchers noted. Juniper predicts software spend for enterprise resource planning systems that integrate this data will reach $11.3 billion in 2021, up from $1.5 billion projected for this year. "Innovative retailers such as Rebecca Minkoff have combined RFID with smart mirrors," noted Juniper research author Steffen Sorrell. "Integrating these systems allows real-time information to improve the store experience and bridge physical and virtual worlds – in this case, the concept drove a 200 percent increase in sales."
For merchants, the real challenge will be to remain focused on the most prominent channel. In its research, Juniper analysts pointed out that physical retail stores still have many benefits, not the least of which include overcoming the lack of face-to-face interactions and sterility often associated with online shopping.
Beacon technology creates an opportunity for merchants to connect digitally with mobile customers while in-store and offer discounts and promotions based on actual products being viewed. Social media also serves to bring online visitors into physical stores for highly personalized experiences.
Researchers believe online retailers should focus more on adopting such technologies as machine learning, which can provide digital assistance, as well as digital performance management. In the latter case, measurements such as user experience, IT performance and business outcome can be analyzed holistically, and necessary improvements and adjustments can be made across the platform, researchers noted.
Either way, a number of retailers have migrated to a hybrid model to some extent. Many have invested in online and in-store channels hoping to bridge both worlds for fleeting customers in search of instant gratification. Large-ticket retailers still have the advantage of time to address consumer education and financing using the latest technologies. Juniper's white paper titled, Agile Retail in the IoT, is available for download. The IoT in Retail: Strategies for Customer Experience, Engagement & Optimism 2017-2021 research can be purchased online. Visit www.juniperresearch.com for more details.
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