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How to Combine IoT in Retail and eCommerce: Smart Store Working Online and Offline

How to Combine IoT in Retail and eCommerce: Smart Store Working Online and Offline

How to Combine IoT in Retail and eCommerce: Smart Store Working Online and Offline

Year by year smart technologies penetrate into all spheres of human activity: smart fridge, smart coffee maker, smart watch, smart car, smart home and, finally, smart shop. The latest research predicts promising prospects: by 2025, Grand View Research expects the retail market to grow by USD 94 billion. The production of sensors is expected to be actively developed, and Juniper Research has estimated that with the current pace of development of the Internet of Things technology by 2022, smart retail stores will be able to process more than 78 billion dollars.

“Retail technologies are all moving to make in-store retail more experience-focused,” remarked James Moar, the author of Juniper Research. “This is ideal for online-first retailers as the store functions as an advert for an existing business. Offline-first retailers need to both have more personalized experiences and maintain the same transaction volume; a far harder task.”

These figures give a good impetus to action and motivate owners of online stores to be aware of new tech trends, keeping up with modern opportunities. The Internet of Things allows you to build communication channels between a purchaser and a store as a whole system where the purchaser can interact with the store at various levels, and this significantly automates the online business. Formerly, all business processes between the store and the purchaser were carried out through an intermediary (a store consultant, cashier, warehouse worker), now the interaction takes place directly through the user interface (mobile application or another device). Automating and simplifying the processes, we get the business model somewhat similar to ecommerce.

Integration between the smart retail store and the ecommerce website

Supposedly, there is an offline store and its online version. The offline store is being completely upgraded and turning into the smart store. However, the necessity of integration with an online store is still actual. Here is how the whole integration scheme looks as follows.

How to combine IoT in retail and eCommerce: Smart store working online and offline

  • Creating a Virtual purchaser – User Interface

A Virtual purchaser is a customer identification number, an account to which a Bankcard or other payment system is linked. Sensors in the offline store collect information about the visitor: what products he puts in the basket, what products and at what intervals he buys constantly and, what departments he visits; video surveillance camera records the gender, age, clothing style of the visitor, and the machine learning system analyzes these data and builds algorithms on their basis. For example, the purchaser buys a coffee maker, and it is necessary to buy separate filters monthly. Then the system based on the analysis builds the algorithm of the offer in order to notify the buyer about the need to acquire filters in a month. The interface of the application or the account on the site can allow to make settings so that the order for periodically purchased goods is formed automatically according to a certain schedule.

  • Connected devices which order good themselves

This is the case when a smart refrigerator buys food in an online supermarket itself, with home delivery. A similar feature can also be provided in the user interface, and if you have a smart technique, then it can be integrated with the app of this store.

  • Visitor navigating system

Developers draw a precise map of the store, and this allows to help visitors find the right product and get information about current discounts/promotions.

  • Robot-consultant

The retail store usually has an employee to whom customers can turn for the consultation, but, in an ideal smart retail world, it will be possible to do it with a special robot wandering along the store space or with an inbuilt helper in the store mobile app.

  • Payment without cashiers

The store is equipped with special terminals for payment, which serve as a cashier. And it requires no special actions. The system is designed so as not to create queues. Just scan a code with the downloaded app and go to conquer the market.

  • Robotic delivery from the warehouse

A smart store warehouse is also a part of the technology. Why not automate this process, when the purchaser wishes to take a packed good directly from the warehouse. A robot courier will bring the necessary goods to the trading floor.

Amazon Go experience

Amazon Go works in a similar way. Before entering the store, a purchaser needs to download a special mobile application and synchronize it with a cash terminal using a scanner. Then, all the products that the purchaser takes from the smart shelves equipped with special sensors will appear in the virtual basket of the mobile application. If the customer puts the product back, it will be automatically removed from the mobile shopping cart. Then the buyer simply passes through the terminal and it automatically reads the information about the products the purchaser holds, and the mobile application debits the money from the linked card.

Merits and demerits of the IoT in retail

Apparently, the main advantage is formed by other pluses of the technology. It is comprehensive automation of all the store processes: selling, payment, logistics, analytics and so on.

Light side of the application

  • No need to keep in a staff low-skilled employees ass cashiers, consultants, controllers;
  • No crowded lines;
  • Possibility to get overall information about all visitors and purchasers and use it for marketing.

Dark side of the application

  • A necessity to mark each product with a special chip;
  • Ensuring that the label is not replaced or removed by malicious users;
  • A need for technical support team for fixing and serving the system.

Advantages of the Internet of Things technology seem obvious. In addition, this idea is still new and fresh, few people have implemented it that means the smart store can be a good marketing approach for attracting visitors.

How the Internet of Things implementation can help retail and eCommerce businesses

The whole process of technology implementation can be much wider than just a smart store. It may very well be part of the larger strategy, the so-called online-to-offline commerce – the process of taking your online visitors and customers and converting them to foot traffic. Saying “Smart store” we understand trading hall, limited by the terminal for payment and shelves with cipher-byname products. Within the system, the client interacts with the trading hall. However, there are also other systems: for example, logistics, and timely replenishment of counters with products; there is a video surveillance system for monitoring and exploring visitors in terms of marketing. There is an enterprise resource planning system (ERP) for auditing all processes, which includes data from all channels of the overall IoT ecosystem in the store.

IOT and BIG DATA merger

In the foreseeing future, building such sophisticated business automation systems will require processing and storing an enormous quantity of data, therefore, it is expected that the development of these two directions will step together.

The aforementioned technology can be implemented in each retail store. However, if you want to unite offline and online assortment for better sales, consider the opportunity of integration. Here, we describe how to integrate any third-party service with a Magento store.

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