Futurists have long envisioned retail stores free of long checkout lines and empty shelves. A future where offers will magically appear just as shoppers are ready to make a decision; virtual personal shoppers will help buyers find what they need; and virtual reality images will show what clothes will look like when worn. It's a future where IoT in retail solutions are commonplace. COVID-19 may make that vision a reality sooner than we expected.
The retail industry was hit hard in the early days of the pandemic. While sales have slowly made a comeback, there's no question that trends and technologies like contactless payments, virtual consultations and curbside pickup are here to stay. The silver lining is that the retail industry may emerge from the crisis more efficient and diverse than ever before. IoT in retail will help drive significant innovation in three areas and improve customer experiences.
In-store experience
As the popularity of self-checkout terminals attests, no one likes standing in a line to cash out. And with 55% of US consumers concerned about handling money, it's safe to say few want to deal with cash either.
Checkout lines involve a lot of touching and close interactions with store personnel and other shoppers. Touchless payment options, which were already growing fast before COVID-19 struck, are expected to surge in the coming years, increasing from $178 billion in 2020 to $1.5 trillion in 2024, according to Juniper Research. Smartphones and credit cards equipped with near field communication enable buyers to pay for purchases without handing over a card or even touching a terminal.
Retailer efficiency
It's difficult for retailers to keep an eye on everything happening in their stores, but smart cameras can change that. Some retailers are already using them to moderate crowd sizes and ensure social distancing during the pandemic. But the technology pays off in other ways as well. Smart cameras can help retailers identify promotions that are generating high volumes of traffic or that are causing customers to linger, perhaps out of confusion. They can spot abandoned carts, flag empty shelves, cut down on shoplifting and contribute to more efficient store layouts. It's not surprising that IDC estimates the worldwide video surveillance camera market will nearly double from $23.6 billion last year to $44 billion by 2025.1
Smart shelf technology is also likely to get a boost. These electronically connected shelves use weight sensors and RFID tags and readers to detect when inventories are running low, and can even catch a shoplifter in the act. Inventory management is improved, outages are reduced and customers are less likely to find shelves picked clean of the products they want.
Touchless interactions
Even before the pandemic, the retail sector was expected to buy more than 150,000 robots over the next five years. It's likely that number will increase. Numerous grocery chains now have robots roaming the aisles taking inventory and looking for spills and other hazards that can injure customers. In the future, they will take on more sophisticated tasks like conversing in multiple languages to help shoppers find basic items.
Interactive displays will also take on more interactions between shoppers and employees. According to Accenture, chatbots are already sophisticated enough to address 80% of customer requests in some scenarios. With improvements in speech recognition technology, many common interactions will be handled by virtual agents without requiring touchscreens or necessitating that shoppers flag down employees.
Flexible backbones
The influx of IoT retail solutions will require upgrades to both network and data processing infrastructure. 5G networks will help eliminate the need for intrusive wiring and enable more sophisticated programming logic to be moved closer to the point of customer contact. Connected-device services will allow retailers to continually collect data from their automated field agents and use it to improve telematics, fleet efficiency, supply chain and asset tracking, among other things.
Virtualized wireless wide-area networks will permit network resources to be configured flexibly in software while routing around outages, maintaining service levels and supporting security protocols like the Payment Card Industry Security Council standard.
Times of crisis also gives birth to bursts of innovation. IoT in retail will transform the customer experience, allowing sellers to reap the benefits of improved loyalty, lower costs and business agility.
Learn more about how Verizon can help retail businesses improve customer experience while driving business efficiency with automated retail solutions.
The author of this content is a paid contributor for Verizon.
1 IDC, Worldwide Video Surveillance Camera Forecast, 2020-2025, IDC #US46230720, July, 2020.