Why retail needs the Internet of Things: let’s explore with examples


The Internet of Things (IoT) is revolutionizing many industries, including retail. This technology offers new opportunities to enhance trading operations, manage inventory in warehouses, and interact with customers.

Introducing IoT into the retail sector is not just a trend but a necessity that helps companies remain competitive in a rapidly changing world.

Let’s delve into some prominent examples of how IoT enables retail businesses to more effectively manage enterprise processes and serve customers.

What is IoT?

The Internet of Things (IoT) is a network of physical objects equipped with sensors, software, and other technologies designed to collect and exchange data with other devices and systems over the Internet. These objects range from ordinary household items to complex industrial tools. IoT transforms ordinary objects into “smart” ones by enabling them to send data about their status or the surrounding environment. 

This allows for the automation of various processes, improves resource management, enhances efficiency, and provides new services. The technology finds applications in many areas of life, including smart homes, healthcare, smart cities, industry, and retail.

Opportunities of IoT in retail


The possibilities of retail IoT are extensive and diverse, offering retailers new ways to interact with customers, manage inventory, and optimize operations.

Supply chain optimization

Attention to detail is crucial in retail success. The Internet of Things (IoT) plays a key role in providing the necessary information for efficient supply chain management and product delivery. IoT technologies enable the implementation of the “just-in-time” principle, minimizing delays and excess inventory.

One example is the use of sensors to monitor storage and transportation conditions, including temperature and humidity, which is crucial for food and pharmaceutical products. This data helps prevent product spoilage, ensuring that goods reach their destination in optimal condition.

Additionally, RFID tags and GPS trackers are used for precise real-time tracking of goods’ locations. This not only improves logistics but also helps in promptly responding to any delays or issues during delivery.

Enhancing customer experience through personalization

The Internet of Things (IoT) enhances retail by offering unique ways to improve the customer experience through personalization. Here are a few examples of how retailers are using IoT to engage more closely with shoppers:

British retailer Tesco utilizes IoT devices to track merchandise on shelves, enabling them to maintain stock levels and provide real-time information on availability and pricing;

American pharmacy chain Walgreens has implemented smart refrigerators with touchscreen displays and cameras that analyze shopper demographics for targeted advertising and inventory management;

American electronics and appliance store chain Best Buy tested electronic shelf labels (ESL), which save sales associates time by eliminating the need to adjust paper tags and provide customers with detailed product information;

Amazon uses Big Data to create a machine learning-based product recommendation system that considers shoppers’ behavior, their past purchases, and dozens of other factors for personalized recommendations.

Utilizing beacons for customer interaction

Beacons are small devices that use Bluetooth Low Energy (BLE) technology to transmit signals to smartphones or other nearby devices.

Here are several advantages of beacons in retail:

  • personalized offers: beacons allow retailers to send customers notifications about special offers, discounts, and recommendations when they are near specific products or departments;
  • customer behavior analytics: by collecting data on customer movement in-store, retailers can better understand their preferences, optimize product placement, and adapt marketing strategies;
  • improving customer service: beacons can alert staff to the arrival of VIP customers or the need for assistance in a specific store area, enabling them to provide higher quality and more responsive service;
  • internal logistics optimization: by using beacon data, stores can improve inventory management and reduce the time it takes to restock shelves.

Examples of successful beacon implementation include major retail chains like Macy’s and Target in the US, which use this technology to send personalized offers and discounts to customers in-store.

Smart shelves and inventory management


Smart shelves utilize weight sensors and RFID technologies to automate inventory tracking in retail.

Here’s how smart shelves work:

  • inventory tracking: weight sensors can determine when products are removed from shelves and automatically send data to inventory management systems;
  • theft prevention: RFID tags allow tracking of each item individually. In case of unauthorized movement or attempted removal from the store without payment, the system immediately registers it and can alert staff;
  • automated product ordering: systems can automatically generate orders for replenishing products based on current inventory and sales data.

Major retailers like Amazon and Walmart use smart shelves, implementing this technology to optimize their store and warehouse operations.

Overall, the Internet of Things (IoT) opens up new horizons for retail, offering enhanced ways to interact with customers, manage inventory, and optimize operations.

Retail enterprises are advised to hire IoT specialists, such as consulting company Euristiq, who possess the necessary experience in data management. Implementing IoT in retail is not just the future, it’s the present, and those companies actively using it today are already outpacing competitors, opening up new opportunities for growth and innovation.

Guest Author
the authorGuest Author