How can IoT help change physical stores in relation to the digital future?

By Eduardo Gonçalves, Aruba's country manager (HPE company)
 

Customers are becoming smarter in their purchase options, and their expectations for the retail experience are rising rapidly. It is true that e-commerce is on the rise, which means that physical stores are increasingly empty; therefore, something special must be done to bring shoppers back to stores, as the latest retail sales figures show that most physical stores have had the worst sales growth in five years; there is much to be done to recover these losses.

The technology can help attract customers to stores and improve the growth rate of tenants. One technology that should transform retail is the Internet of Things (IoT), which, if used correctly, can create competitive differentiation. According to the survey, early adopters of IoT are already reaping benefits, which include a better customer experience (81%); better visibility of organizations (78%); and increased profitability (74%).

This applies particularly to companies that want to digitize physical stores with innovations like IoT. Amazon took the first step with its Amazon Go stores, which do not use cash for payment and work with a network of cameras and sensors that detect what was purchased by consumers in the store.

Here are some practical steps that shopkeepers can take to increase the number of customers in the store and their profitability:

Increase in the number of customers in the store with location-based services

A digital in-store experience is essential for physical stores to compete with online stores, but the first hurdle to overcome is getting customers in. Most customers usually have a smartphone in their hands, usually with location enabled, so why not use it to the benefit of the store and send personalized, live offers to attract them? To do this, invite consumers to sign in to the store's Wi-Fi network or download the app. Thus, you will be connected with them by sending notifications and promotions whenever they are nearby, through the reach of the beacons that recognize your location.

IoT keeps the in-store experience interesting and immersive, allowing shopkeepers to constantly innovate their in-store offerings. Innovations bring several results and can be replicated in large or small physical stores. Home Depot, the industry's famous chain with large stores, is implementing location-based services to help customers navigate its various sections. When proposing that customers access the app, they use their phones to ask about the location of the desired products, leaving sellers free to focus on the sale itself. Specially crafted applications and beacon technology can use in-store connectivity to direct customers to the exact point where the products they are looking for are located.

Increased engagement in the store by going digital

Physical stores can also compete with their competitors both online and physical, offering partnerships, offers and exclusive experiences for customers.
With consumers inside the store, shopkeepers must attract their attention with new and attractive offers. Another method is to equip employees with tablets to help them inform customers, for example, if the size of a product they are looking for is in stock or if a product is available in stock. In the case of larger stores, this can also help employees to replenish shelves more efficiently.

The use of these devices at the point of sale can also free up counter staff, allowing them to accompany customers throughout their shopping journey.

Gathering information about customers to innovate

Learning about the behavior of customers in the store is essential to improve the effectiveness of the store's offers and organization. One way to get to know the customer is to collect the data they create when accessing the app in the store or using touch screens for information. When these data are analyzed, it is possible to create a profile of the customer and their interests, allowing the salespeople to better meet the needs of each one of them.

The collected data can also be used to improve store physical layouts using the contextual information provided by customers in the app. Announcements of offers and new products available can be informed in the areas of greatest circulation. Real-time information about store occupancy, especially during periods of special celebrations, can also help to better plan hires to ensure the optimal capacity of employees, saving money in the long run.

Throughout 2018, the retail sector will be focused on its transformation, offering consumers a unique store experience. This has been dreamed of for years, but the technology available now can make it a reality.

Disclaimer: The opinion presented in this article is the responsibility of its author and not of ABES - Brazilian Association of Software Companies.