The IoT has already started working its way into retail stores, and technologies will continue to disrupt the traditional retail process in the coming years.

Consider beacons, devices that retailers use to automatically send notifications and discounts directly to shoppers’ smartphones when they enter a store. BI Intelligence, Business Insider’s premium research service, expects the beacon installed base to swell from 96,000 in 2015 to 3.5 million in 2018.



With IoT, we can now understand the context (the time and the place of the customer) to identify when we are certain the customer needs help or an incentive to purchase, and we can respond proactively. Key applications of IoT for retailers include supply chain, connected consumer and smart-store applications.

Connected consumer

The connected consumer is having an impact on brick-and-mortar locations. Retailers understand that customers are able to check in-store pricing and local inventory levels from their mobile devices. Imagine if we could make a customized best-price offer or provide location-based services right in the store. What if we could target our high-value, loyal customers with concierge services? In the past, it was accepted as the norm that we would send mass promotions to customers with the expectation that some acceptable percentage might be interested in that promotion. With IoT, we can now understand the context (the time and the place of the customer) to identify when we are certain the customer needs help or an incentive to purchase, and we can respond proactively.

Smart store

In a smart store, mall traffic can be analyzed across several retailers so we understand the entire shopping journey. In the past, we had to run expensive survey projects to understand if store associates were being responsive to customer service needs and then enact elaborate staff training programs. Now, within smart stores, we will be able to use video or Wi-Fi foot-traffic monitoring to see if customers dwell over a product area. Then, in real time, direct an associate to help that customer or analyze that information later to adjust store layouts for more efficient customer visits. In addition, by monitoring store traffic and customer demand in real time, we can customize the current in-store shopping experience. That gives us the opportunity to implement rich digital marketing inside the store or announce events to customers via their mobile devices.

Demand-aware warehouses

When it comes to demand-aware warehouse fulfilment, we’re talking about warehouse automation and robotics driven by online and in-store shopping demand. IoT allows us to monitor sales opportunities in real time and track missed in-store sales. It’s important to remember that RFID is a well-tested part of IoT that can be used for inventory management and more accurate service-level optimization. Currently, a typical distribution centre or warehouse is organized by aisles and shelves based on a fixed schematic. The warehouse of the future will be open space where automated pallets self-organize based on real-time demand.

Smart transportation

Moving merchandise more efficiently is one of the goals of smart transportation applications in retail, and IoT can come into play with the maintenance of transport, tracking and route optimization. We know many retailers have been using GPS to track and route trucks in the last couple of years. With IoT, we are able to understand to a much higher degree of accuracy how close a pallet of merchandise is to a given store.

Benefits of IoT in the Consumer Goods Sector

Technological innovations, from hyper-local store data enabled by IoT to AI-powered chatbots, are shifting the retail industry dramatically

Empower employees with data-driven insights

Devices like beacons, video cameras, and smart shelves provide valuable data that informs businesses on how their customers behave and how to best engage with them.

Fine-tune merchandising and inventory plans

IoT data empowers organisations to assess the effectiveness of store layouts and product presentations, and more intelligently forecast inventory demand.

Delight consumers through personalised, seamless experiences that drive sales

Digital kiosks, mobile apps, and rich customer data enable retailers to anticipate customer desires and effectively execute personalised campaigns as well as cross-sell and up-sell motions.

Optimise operations with service metrics to build a more agile organisation

Decision makers can use real-time insights throughout the store to ensure a positive customer service, more effectively allocate staff, and improve operational efficiency.


IoT can reduce inventory error, optimize your supply chain management, and decrease labour costs. Ultimately, IoT can help your traditional brick-and-mortar shop compete with today’s online-first shopping world, by exponentially improving customer experience and decreasing unnecessary expenses.

Automated Checkout

You’ve probably seen how long lines deter your customers from purchasing products. And, as a manager, it can feel unprofitable to pay multiple employees to work during busier shopping times. With IoT, you can set up a system to read tags on each item when a customer leaves the store. A checkout system would then tally the items up and automatically deduce that cost from the customers’ mobile payment app.

Creating an automated checkout system using IoT devices would make your customers happier and more willing to enter your store, especially if they are on a time crunch. It can also save you a ton of money — McKinsey estimates automated checkout can reduce cashier staff requirements by up to 75%, resulting in savings of $150 billion to $380 billion a year in 2025.

Personalized Discounts

If you have frequently returning customers, I bet you’d like to reward them for their loyalty. With IoT, you can set up sensors around the store that send loyalty discounts to certain customers when they stand near products with their smartphones, if those customers sign up for a loyalty program in advance.

Additionally, you can use IoT to track items a customer has been looking at online, and send that customer a personalized discount when she’s in-store. Imagine if your customer perused your purses online, and then, in-store, received a discount on her favorite purse? Rather than offering general discounts on a wide variety of products, you can tailor each discount using IoT to maximize your conversion rates.

Ultimately, finding ways to incorporate IoT devices into your day-to-day business requires creativity and foresight, but the benefits of IoT in retail — as outlined above — can help your business discover innovative solutions to attract more valuable and loyal long-term customers.


Beacons, first introduced by Apple in 2013, are small Bluetooth devices that send alerts to smartphones based on location proximity. In the retail industry, this means customers can receive discounts, special events, or other reminders when they’re near a shop and have previously downloaded the store’s app.

Macy’s has been using beacons nationwide since 2014. After opening the Macy’s app in-store, shoppers are alerted to promotions and discounts. The app also recognizes which area of the store you’re in — so if you’ve entered the makeup section, the app will remind you of the makeup brands you liked online.

Along with helping customers in-store, beacons also send alerts to passersby. This can be used to effectively advertise promotions or in-store events. Swirl Networks Inc. found over 70% of shoppers say beacon-triggered content and offers increased their likelihood to purchase in-store.

Besides Macy’s, stores including Urban Outfitters, CVS, Lord & Taylor, and Timberland already use beacon technology.

Smart Shelves

A lot of your employees’ time and energy is focused on keeping track of items to ensure they’re never out-of-stock, and checking that items aren’t misplaced on various shelves. You can use Smart Shelves to automate both of those tasks, while simultaneously detecting potential theft.

Smart shelves are fitted with weight sensors and use RFID tags and readers to scan the products on both display and stock shelves. Smart Shelves inform you when items are running low or when items are incorrectly placed on a shelf, which makes your inventory process cost-effective and more precise. Additionally, each RFID tag is connected to a reader, so Smart Shelves are able to detect in-store theft — saving you money on security personnel and cameras.


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