IOT is Bringing a Paradigm Shift in Consumer Goods and Retail
Connected devices are dramatically reshaping industries and consumer behaviors. There are more intelligence and connectivity in the objects around us than ever before. Such trends produce enormous amounts of data that companies can leverage to improve their operations, serve customers better, and create entirely novel ways of doing business. The Internet of Things (IoT) is driving innovation and new opportunities by bringing every object, consumer, and activity within the digital web. Top businesses adapt to the Internet of Things by digitizing every employee, process, product, and service within the retail and consumer goods sector.
Rapid Growth Of IoT
The rapid increase of connected devices with improved, affordable technology platforms and quick adoption of common standards will only expand IoT-enabled capabilities across industries. The IoT will be particularly disruptive to the retail and consumer goods sector. Retailers are already experimenting with intelligent, connected devices to supply new services, reshape customer experiences, and enter new markets by creating digital ecosystems. The IoT revolution offers retailers opportunities in three key areas: customer experience, new channels, revenue streams, and the supply chain.
The burgeoning of IoT is on the rise than most of us can realize. Retailers that are in confusion to implement an IoT strategy automatically make space for competitors to take over. Today’s consumers expect a high level of connectivity between their daily home products and electronics. This fast and versatile new cellular network technology (5G) has hit fast-adopting markets at the end of 2020. In 2020, Stallion Market Research found that the total FMCG (Fast Moving Consumer Goods) sector had hit about $720 billion. Big players in the FMCG sector have been treating IoT devices and networks as a platform to bring up sales of even the foremost mundane of everyday home items. The upcoming years will likely see the value of IoT hardware and services fall. Simultaneously, more competitors embrace connected commodities, giving FMCG companies a robust incentive to invest in IoT solutions. IoT connectivity makes it easier to get and buy consumer groceries and channel data to innovate new products and business models.
The Power of DataBig data and IoT devices share a close relationship. The presence of an AI system processes the data and helps in decision-making. The more IoT devices that get connected or, the more complex the AI model, the greater the spotlight on big data hardware. Stallion Market Research combines advanced data analytics with the newest technologies to supply actionable recommendations for stakeholders that drive companies globally. Investing inefficient hardware and software is an intelligent choice when it comes to performance. That is why it is necessary to get hold of robust big data hardware.
Correlation Between Data and Retail Sector
The best-rated retailer apps are those that provide both savings and convenience. To achieve this, combining unstructured data (like social media mentions or demographic data) with structured data (a user’s browsing history on the app) can generate intelligent recommendations, even enticing with algorithm-generated coupons. For example, during the peak summer season, consumers mainly look for fans or air-conditioners. Our analysis reveals a spike in the number of people searching for such products. As a result, generating a coupon in product applications or in-store offers and discounts help businesses elevate their sales. Data and connectivity together push consumers to rush to the store or browse applications for purchasing more items at lower prices.
Faster and more efficient logistics and supply chains
Connected devices and products provide retailers with the opportunity to assist in optimizing operations. Within a complex supply chain, multiple digital channels, and consistently demanding customers, businesses can keep up. RFID technologies, for instance, can improve the precision of inventory tracking. Data visualization technologies make it easier for workers to trace products across the availability chain. This service could even be extended to customers— allowing them to trace, for instance, where a custom order is within the production and distribution process. Managers could begin to regulate pricing in real-time, using Internet-enabled smart tags to lower prices on promotional or low-turnover items or increase the pricing on higher-demand items. A fully integrated system would help retailers improve the synchronization of costs between the shelves and, therefore, the registers and across channels to verify prices are consistent between online and brick and mortar stores.
Other IoT devices are often integrated within the availability chain to improve store operations and help reduce cost. IoT-enabled sensors allow store managers to monitor lighting and temperature control and adjust settings to maintain customer comfort. Sensors are also used to reform employee work feasibility is hugely adopted by store managers. Manually performing tasks like tracking inventory or price changes of items are smartly managed by employees daily. Reducing time spent on managing tedious tasks give employees more time in improving thein-store experience for customers. So, supply chain management and logistics are areas where the web of Things is vital in retail. In a just-in-time retail reality with cost pressures, processes must be optimized, and here the IoT is an enabler and a price saver.
From the perspective of buyers, IoT is playing a pivotal role in changing the way things work. If goods are not brought physically from the store, we will soon witness drone deliveries happening. New opportunities and more efficient forms of shopping experiences are on the way.
IoT sensors are also being used –
- In monitoring goods throughout the entire supply chain by retailers. Valuable data such as location, humidity, temperature, providing insights into quality control, shock and tilt, and traceability are found.
- IoT leverages tracking solutions that help determine the safety of the materials, whether they are delivered on time, and transported in ideal conditions. Data helps retailers to execute their transport logistics more efficiently, reduce product damage and avoid loss.
- IoT is increasingly helping and adding value to the logistics chain. According to a survey by Deloitte Review on the Internet of Things potential to recast supply chain management, “74 percent of those who implemented initiatives such as sensor-based logistics saw increases in revenue.”
Changing attitudes and culture
Consumer businesses may experiment with affordable and available technologies like IoT from scratch. Businesses must also set a pre-defined goal for the whole organization to meet the needs of consumers in the 21st century. Managing this transformation and who should lead it can be a bit confusing. Consumer business’ management teams can learn lessons from IT department past experiences. Since the internet grew to dominate corporate IT strategy, IT professionals needed to respond more quickly than ever before. They adopted an agile methodology whereby projects are broken into discrete chunks and developed and tested in short sprints. Being on the same lines with this approach is necessary for a general business to achieve rapid changes required to thrive in the consumer-centric world.
- Success might require working in new teams, across traditional boundaries. In many consumer organizations, marketing is focused on the consumer, while operations focus on making existing processes more efficient.
- The two groups hardly agree but it is time they did. Engage various groups across the businesses to work in novel and better ways. Do not treat all groups the same.
- Along with adopting new technologies, it is essential to achieve the right culture for change. Disagreements or refusal to change can easily lead a well thought-out project to disaster. A change in culture will be necessary within the organization.
- IoT fosters collaboration between companies, suppliers, manufacturers, and retailers.
- IoT even has the potential to support collaboration across previously separate industries.For example, consumer goods companies, retailers, healthcare providers, and pharmaceutical firms can work together.
Food safety monitoring
Retailers from the food and beverage industry are using IoT technology to monitor temperature of storage spaces that maintains food hygiene and expiry. Perishable food spoilage in the retail grocery industry leads to a significant loss, with business owners losing $70 million annually due to food spoilage only.
IoT solutions are helping FMCG businesses from incurring huge losses because of spoilage. It is ensuring that food safety procedures are followed by accurately monitoring the temperature of food storage facilities. This is carried out with a simple device installed in the storage unit and linked to an online dashboard. Retailers get alerts when there is any change in temperature levels. Real-time data from IoT sensors helps retailers maintain optimal freshness and reduce waste by protecting perishable goods.
To track lost shopping carts and baskets, retailers are using IoT technology solutions. Tracking carts and baskets help reduce the cost of having to replace them. Shopping carts are expensive for retailers to replace. Retailers can track in-store shopping carts and baskets by placing sensors on them. It gives them access to the exact location and receive status updates and alerts if they’re damaged or stolen. Carts and baskets have tracking systems installed on them. These solutions can function indoors and outdoors and can run for months or even years without having to replace the batteries. Retailers can improve customer experience using these sensors and ensuring that the stores always have enough shopping baskets and carts for shoppers.
About 7 billion IoT-connected devices are existing today as per IoT analytics. This total is projected to reach $25 billion by 2021, with a large chunk of those devices used by retailers. Retailers will embrace the technology more as IoT networks become more ubiquitous. They will use it across their operations to enhance customer experience and improve business efficiencies.
Now, the big question is – How do consumer businesses benefit from the Internet of Things and plan their course of action?
Targeted collaboration is a must across the organization. Businesses accept the power of IoT in solving discrete problems, such as reducing supply chain waste or slashing factory down time. The Internet of Things is still in the initial stages of implementation. But IoT deployments have captured a significant position like other recent digital technology revolutions, the onset of the Internet and continuous rise of mobile, social media, and ecommerce. Quickly changing customer expectations and industry competition may require retailers to look at the IoT even more aggressively than they have other technology disruptions. Waiting does not appear to be an option for retailers that want to protect market share and position themselves for future growth. Retailers that take the lead in this space definitely will be ahead in an already competitive environment. Early adopters of IoT will be in an advantageous position to quickly deliver IoT-enabled capabilities that can increase revenue, reduce costs and drive a differentiated brand experience. The IoT will be a driving force in retail operations.