The Internet allows people to access almost any piece of information they want instantaneously. All it requires is for someone to put that information on the Web. When it first started people didn’t fathom just how much information and the type of information they would be able to access. That’s not because we lacked imagination but because our reference was physical books, videos etc. that required us to trawl through them to find what we were after. Depending on what we were trying to find, this could take days or weeks. The internet allowed us to search an entire library or libraries instantly and come back with the specific information we wanted within seconds.
Now a new term has arisen that has the ability to have the same impact on Retailers called the Internet of Things or IoT. So what is it and what can it do for Retailers? In my last blog I talked about the value of capturing large amounts of data from multiple sources to gather useful intelligence on your customers. Where the Internet relies on information being uploaded by someone, the IoT constantly and automatically gathers data from sensors and machines and then enables that data to be analysed in real time to provide intelligence. It generally consists of a combination of machines, sensors and cloud based systems that capture, analyse and generate information instantly. To take advantage of the IoT it’s important to pick the right infrastructure that enables your sensors to capture and centrally consolidate data and then interface that data to your cloud based intelligence systems.
An example of this with retailers can be as follows:
If you have Wi-Fi (a sensor) in your stores, that Wi-Fi can capture the unique identifier from a customer’s phone (another sensor) and then pass that data to a system that analyses the data. That simple combination of Wi-Fi and Phone sensors alone can tell you information like:
1. How many unique customers came into your store
2. How long they spent in the store
3. Can infer based on average customer times whether they purchased or browsed
4. How many people walked past your store and didn’t enter
5. Which part of your store they visit most
6. How many customers come in multiple times (i.e. a measure of loyalty)
Like the Internet initially, the IoT will take some time before some retailers truly fathom the opportunities available to them, but with it the future of retail will be about having real-time information on your customers that you can leverage and help drive loyalty to your business. Start simple and leverage off what you already have and pick the infrastructure that supports the IoT. The worst thing you can do is do nothing, as you can be rest assured that your competitors are already using it.