The retail sector is facing enormous challenges. From the factor of rising operating costs, to ecommerce and a technical revolution – retail has to reinvent itself. The future belongs to those working with and believing in new digital concepts, with a focus of customer centric retailing. But there is a technology which can accomplish those goals with ease – the “Internet of Things”. Thanks to the connected products the retailers are provided with a fast amount of data and customer insides.
The Internet of Things can be used in a variety of ways. It can improve the automated ordering processes, enable a seamless supply chains or assist in monitoring the product use and consumption. In the year 2016 there are already more than 6,4 billion “connected” things all around the world. The Internet of Things is an unprecedented opportunity for the retailer sector to satisfy the individual customer needs and address them in a unique and innovative way.
Through individually custom-made shopping experiences, which meet the requirements of the customer, the retail as we know it will change forever. The merchants have to retrain and adapt to completely new conditions in the market . They have to learn to exploit those new rules and requirements for their advantage.
The need of prototyping in retail
Here in Germany, the retail industry has a quite traditional understanding of their role in society, much different than the US or UK markets define themselves. The German retailers are not very keen of changes, which affect their established business model. But the customer is evolving and the merchants have to be part of this process to survive in the medium to long run. They must participate actively in the digital revolution and try out the latest technologies on their market. In doing so, they will naturally make mistakes; but if they are constantly analyzing their approaches and correcting them where necessary they won’t suffer big financial damages. This sort of prototyping will allow them to face the future calmly because when the technologies become the norm, they are already prepared.
As a number of studies have shown, that the merchants have already recognized this need, but despite everything, the investments in technologies like the Internet of Things are nominal. However the retailers are not the only ones who have to change; manufacturers themselves need the connected data for their product optimization. They must face the digital changes together with the retailers; the structures of the two participants have to be harmonized. Only if such cooperation is established the dream of a connected, individualized retail sector can become reality.
The search for a digital solution
As observed in many other technologies, innovations and first technical developments, there is no need for drastic rethinking per se. An examination of sectors which already provide Internet of Things solutions for their customers reveals that it is possible. What really counts is that the merchants and manufacturers see the opportunity of such connected products and take timely action. They have to monitor other sectors and industries and must adapt those successful approaches to their own business models. There are a few things to consider: Which components, technologies and ideas can be adapted? Which products are suitable for the Internet of Things? These questions have to be asked in advance to be successful in the digital revolution. But then every retailer and manufacturer can be successful in innovations and in the Internet of Things.