In today’s highly personalized and competitive retail world, data is gold. Modern POS systems specialize in collecting data so that merchants can improve business operations and profitability. But there’s another valuable tool that your merchants may overlook: the IoT.
The Internet of Things refers to any combination of devices that connect and communicate with one another wirelessly. On the home front, we see a growing number of IoT devices controlled by a consumer’s smartphone: think thermostats, fridge settings, even remote controlled lightbulbs.
In business settings, IoT applications are even more diverse. We’ve long known that retailers can use IoT technology to broadcast sales beacons to customers. But IoT has a much broader use than just promotions.
IoT technology is a valuable source of data for retailers. Not only can IoT data improve the customer experience, it also helps merchants improve their internal operations.
4 Benefits IoT can bring to retailers:
- Improved customer experience through personalized recommendations. Data collected from the consumer’s app allows the retailer to promote attractive, targeted promotions through push notifications and in-store digital displays.
- Better shopping experience through superior store layout and inventory stock. With IoT data on shoppers’ browsing and purchasing patterns, retailers can design a more effective store.
- Greater profitability through internal controls. IoT isn’t only for customer-facing applications. Tagging inventory items with RFID, installing remote temperature monitors, and tracking employee activities are all ways merchants can use IoT technology to control internal expenses.
- Increased sales by removing friction. Connected devices make it easy for customers to pay how and when they want, and it’s not just through a smartphone app. Down the road, we can think bigger - from connected cars paying for a car wash with the push of a button, to payments integrated with NFC wearables or other forms.
What about IoT and payments? The payment brands are already on it. Visa is gearing up with Visa Ready, a protocol that allows manufacturers to embed tokenized Visa payment options into their IoT products. Mastercard, Amex and others have similar plans in their pipelines. We’re still a few years out from mass adoption of IoT purchasing in retail settings, but there’s no doubt it’s where the industry is heading.
How can retailers get ready? Whether merchants use marketing and business management apps through their POS system or stand-alone programs, it’s important that they be designed to easily incorporate new data streams.
As IoT connectivity moves into the retail sphere, it will provide amazing opportunities for merchants. New technology is always intimidating, but it’s important for merchants to realize that ignoring IoT integration means leaving data on the table - and data is the greatest tool merchants have to build profitability.