What retailers should consider when stores re-open and why IoT is the answer to recovery

What retailers should consider when stores re-open and why IoT is the answer to recovery
James has a long history of managing high-performance teams, spanning multiple geographies. James has a deep background in cloud, infrastructure, and SaaS solutions

There’s no doubt that the pandemic has had a significant impact on the retail sector, with consumer habits shifting and many retailers having to move to an online environment. Interestingly, according to ONS figures looking at the overall retail sales over the last year, the impact of Covid-19 and its restrictions on the physical retail sector was varied. Hardware stores saw a 13% increase in the value of retail sales compared to 2019, as consumers took advantage of lockdown to work on some long overdue DIY. Clothes stores, on the other hand, saw their sales down by more than a quarter (26%) in that same time frame. 

While we might be relying on the vaccine rollout to restore the UK economy, we can’t be naïve to the possibility that these changes in consumer behaviour may be here to stay. As the country eases its way back to normalcy, there are two opposing possible scenarios that may take place, and retailers should be prepared for either of them. One scenario will see the demise of the high street continue, in which case retailers will need to integrate digital tech and show more of an overall focus on customer experiences to entice shoppers back. The other scenario will see consumers flock back to the high-street when lockdown restrictions ease, much like they did before. While these two scenarios are on opposing ends of the spectrum, it’s important retailers consider both eventualities and consider what solutions are available to them to retain loyal customers. The Internet of Things (IoT) is a solution that can help address some of the issues outlined in both eventualities.

IoT makes it possible to view and interact with physical objects in-store, by essentially creating a digital overlay that sits across the physical infrastructure of retail stores. It can therefore facilitate the agility of online shopping, but in a physical space, by creating a dynamic network of sensors, devices, and equipment. For example, IoT can help improve communication between the store and its customers, by tracking customers’ habits and sharing its insights. In the US, Target uses IoT-empowered beacons, for example, to collect data and send hyper-personalised content to a visitor who has the ‘Target Run’ app. The app allows shoppers to receive product recommendations corresponding to the department they are currently shopping in, delivering an overall seamless in-store experience.

So, let’s now look in more detail on how IoT can help in the two expected outcomes when stores are due to re-open.

First scenario – If the high street demise continues, how do retailers create personalised, seamless and digitised experiences in-store to entice shoppers back?

The overall demise of the high street has long been blamed on retailers migrating online. However, the most recent migration online caused by the pandemic, has forced many people who were still on the backfoot when it came to online shopping, to familiarise themselves and get accustomed to the process. 

Retailers are now left wondering how many of us are still hesitant to conduct shopping online, versus how many have further embraced e-commerce, and how this will impact in-store shopping when stores re-open. In any case, retailers should prepare for the possibility of an overall decrease in footfall on the high street, as it struggles to tempt back those who find e-commerce more practical.

This scenario will see independent retailers continue to compete and struggle against online giants. For example, with same and next day delivery, or live access to available stock, it is perhaps unsurprising that a majority of customers will favour online retailers due to the efficiency and seamlessness of the experience. Therefore, brick-and-mortar stores need to find a way to emulate this digital dynamic and personalised experiences in-store. Some examples could include:

  • Interactive digital displays & kiosks – positioned at the store entry, customers can benefit from an optimised in-store journey and a highly personalised experience by viewing commonly bought items, their location within the store and in-the-moment marketing offers based on purchase history.
  • Roaming POS – queuing is eliminated as tablets carried by staff process customer payments anywhere in the store. In addition, RFID scanners built into trolleys and baskets can total large volume purchases in real-time, without needing to take a single item out to scan.
  • Customer application integration – in-store geotargeting systems can link via Bluetooth to customer-facing smartphone applications to help locate specific items and provide other useful pieces of information, such as stock levels, current offers and the location of staff. 

Second scenario – the grand re-opening and ensuring efficiency across the supply chain

On the opposing possibility, following more than a year of on and off lockdowns, people might be eager to return to town and shopping centres, and are looking forward to doing some in-store shopping without much convincing required. This sees general sales volumes increase; however, supply chains could see themselves struggling to meet the increase in demands, leading to store inventories becoming increasingly difficult to keep on top of.

Another point to consider is the disruption retailers have faced in terms of need and availability of workers. If most stores are understaffed, this may lead to longer queues and in consequence, disgruntled customers. 

Finally, as we increasingly become a cashless society, further intensified due to Covid-19, this may leave some POS systems struggling with the uptick in data traffic and leading to more frustration for staff and customers alike.    

Preparing to mitigate the negative outcomes in this scenario will require retailers to analyse the systems they have in place, identify which areas are in urgent need of greater efficiency, and implement new IoT tools to address them: 

  • Real-time supply chain – inventory sensors and POS data are integrated into a direct communication system with supply chain partners, triggering automated manufacturing and production systems and adjusting stock delivery schedules accordingly.
  • Data-driven decision making – capacity sensors linked to data analytics platforms not only track the number of customers in-store, but analyse seasonally-adjusted data relating to the length of time customers spend in the aisles and predict where and when staff will be needed.
  • Robotic process automation (RPA) – from processing supplier deliveries to quarterly stock counts, RPA systems automate time-consuming tasks that happen behind the scenes, freeing up staff time for better workforce scheduling and more focus on customers.

The importance of LTE & SD-WAN branch networking for IoT

It is important to note the necessity of a reliable, secure and agile network, for any IoT strategy, regardless of which scenario becomes a reality. A wireless WAN (WWAN) build on LTE or 5G cellular networking offers retailers greater flexibility thanks to out-of-the-box connectivity and unparalleled reliability through multiple network channel management. SD-WAN, is another essential component, enabling retailers to cost-effectively manage application performance across multiple WAN links, for example, wired and wireless, at widespread locations with greater automation and less IT oversight. SD-WAN also simples the deployment of VPN security that can provide robust “data in motion” protection for sensitive information, like customer payment data, and secured devices.

The future of retail post-pandemic

While the pandemic has shifted consumer habits, there is no denying retailers should also shift their priorities to making the sector more resilient and customer-experience focused, thanks to the technologies available to them. For those who are able and willing to implement these changes, they will see the benefits from unlocking efficiencies in their supply chain, improving their in-store experience and attracting and retaining new customers once lockdown restrictions start to ease.

(Photo by Mike Petrucci on Unsplash)

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