IoT: What Its Role Is Now And What It Will Be In The Future
The Internet of Things (IoT) is, realistically, still in its infancy. Sure, IoT is already making a mark on retail, but what does IoT’s future look like? Michelle Covey is Vice President of Apparel and General Merchandise for GS1 US, the organization best known as the administrators of the UPC barcode but on that also helps retail companies leverage RFID for inventory visibility.
Covey recently took time to talk with Innovative Retail Technologies about the IoT – both where it’s at now and where it will be in the future — as well as RFID.
IRT: How does item-level RFID tagging help retailers personalize the customer experience?
Covey: IoT is about creating the most personalized and seamless customer experience possible through the integration of technology. For example, if a retailer is able to track your product usage and replenish those items before you’ve even add them to your shopping list, they can call it a personalization win when you as the customer thinks, “Great, I needed new deodorant — they know me so well!”
However, achieving this level of automated personalization requires sharing data through many disparate systems. Similar to the role it plays in omni-channel retailing today, RFID at the item level enables the real-time inventory visibility required to automate replenishment for consistent, repeatable, and accurate experiences. It connects the consumer’s need with the items available in a retailer’s inventory. Each RFID tag can be embedded with unique information and attached to objects in order to track their presence, location, and movement. GS1 Standards — such as the Electronic Product Code (EPC) that works in tandem with the passive UHF RFID tags used to track items in retail today — enable trading partner interoperability and have been proven over the last decade to deliver a reliable inventory view.
IRT: How are retailers leveraging IoT to improve profits?
Covey: As retailers reevaluate their investments in physical real estate, it’s clear the entire industry is grappling with what the new role of the store will be. Retailers are testing and leveraging IoT because what is most relevant to them right now is the ability to create a frictionless experience. Today’s consumers want to be wowed and they want someone to guide or curate the shopping journey. IoT can combine convenience and entertainment to transform what it means to shop.
Leveraging RFID is one of the first ways we see IoT being implemented in retail, because the cost of tags and equipment has dropped dramatically in recent years. RFID is a massive time saver for retailers and drives inventory accuracy at the SKU-level. One example that clearly demonstrates how RFID is making IoT a reality today is Levi’s San Francisco store which is basically a brick-and-mortar, IoT proof-of-concept.
With RFID tags on every single item on the shopping floor, Intel devices feed data through cloud-based analytics engines. Levi’s and Intel are showing how, in an IoT world, merchants can track inventory status, purchase data, item popularity, and even shopper movement including measuring how much time a consumer dwells on any product. Armed with this information, retailers are better able to quickly analyze the characteristics of a product that is converting the sale and strategize accordingly.
IRT: What is the future of IoT in retail?
Covey: Leading companies know embracing disruption now can pay off long term, and IoT holds so much potential. It affords retailers the opportunity to be innovative and differentiate themselves to better serve and interact with their consumers. Consumer demand for fast product availability, as well as personalized and contextualized interactions, will drive retailers toward more automation in the short term, with an eye on securing loyalty for years to come.
Ultimately, IoT will likely follow a similar path as omni-channel retailing. Those now on the cutting edge of inventory accuracy and automated processes will be ahead of the curve when IoT becomes more mainstream.