The Internet of Things (IoT) is a term that’s been around for a while. And though conversation around the buzzword fluctuates, it’s is already ingrained in most major retailers’ day-to-day operations. IoT is literally every device, tool, machine, and human that transfers data over an internet connection.
IoT technology in retail is expected to reach more than $35 billion this year. And it’s bringing endless benefits to the brands who use it most effectively.
Let’s take a look at a few ways IoT will transform retail and food service businesses in 2020 and beyond.
Store sensors for food safety
Food safety is important from many perspectives: compliance, moral, profitability, customer experience, you name it. Too many brands face PR nightmares when they have a nationwide recall due to food safety issues.
Plus, consumers are increasingly privy to food safety. “Customers will be more likely to buy food that has been tracked from the moment it was produced until the moment it is delivered in their stores or homes,” says Cassy Aite, CEO and co-founder at Hoppier, which sells bundled office snacks. “It’s a superb selling point, no matter the type of product or target audience.”
Food service retailers can use store sensors across their locations to automatically log temperatures of prep areas, fridges, freezers, and other equipment. Retailers can set thresholds for each sensor and receive an alert each time a threshold has been hit. This helps protect against foodborne illnesses by ensuring proper holding temperatures. It also helps protect inventory by ensuring food storage areas remain temperature compliant.
Improved logistics and operations
IoT makes it easier for retailers to upgrade their tech stack and increase efficiency when it comes to logistics and supply chain.
“IoT sensors and digitized tracking systems are revolutionizing the food service logistics and supply chain management by reducing cost, optimize operational efficiency and improving customer experience,” says Dev Bhatia of Momentum IoT LLC. “As an example, real-time temperature monitoring for cold chain transport is helping companies prevent potentially ruined shipments.”
But it goes beyond preventing spoilage. It also means brands have access to real-time data. Some examples:
- Provide shipping and tracking information to customers
- Accurate demand forecasting
- Instant updates about in-store product availability and stockouts
- Trace exactly where a product is at any given moment
63% of Americans believe and want businesses to take the lead on social and environmental change. IoT makes retailers’ sustainability efforts more effective.
Smart sensors help reduce food waste by monitoring temperature, time in transit, location, and other important conditions we talked about when discussing food safety. And it goes beyond that.
You can track energy usage across your business and find out where you have opportunities to reduce usage. Take Pizza Hut, for example. They anticipate energy usage to decrease by 18% from 2018 to 2022 thanks to using IoT — that’s a $2 million savings.
Install sensors across your locations to monitor heating and air conditioning to ensure your customers are comfortable and that stores aren’t wasting energy resources. This also contributes to your organization’s sustainability efforts and waste reduction goals.
Reduce labor costs
Using sensors to monitor environments can save employees time by automating processes that require manual temperature logging multiple times per day (prep stations, walk-in coolers, sanitizing equipment, medication storage).
By automating this workflow with sensors you know a temperature check won’t be missed because employees were busy, the store was understaffed, or employees simply forgot. Additionally, with a platform like Compliant IA, you have a record of safety compliance for all your locations in one place accessible at any time.
Equipment and asset tracking
As food safety and supply chain are monitored, retailers are also keeping an eye on some of their most valuable assets. In fact, grocers lose $70 million each year to spoilage alone.
But perishable inventory isn’t the only thing of value that a major brand needs to track. Grocers also lose up to $250 for every shopping cart that goes missing. As far as IoT goes, retailers can use sensors to keep track of physical items that are costly to replace.
Retail and F&B businesses also require costly equipment. Whether you’re concerned with theft or a breakdown, there are IoT devices and sensors — and even connected equipment itself — that gives businesses more control and insight into their working condition.
Additionally, having a history of sensor data can help you identify inconsistencies in energy use/temperature patterns so you can spot potential equipment malfunction before a total breakdown happens.
Digital signage is becoming more commonplace in retail and F&B settings. As customers have more self-serve options and brands aim to control the in-store experience, digital signage enables both sides. In fact, the digital signage market is expected to grow from $20.8 billion in 2019 to $29.6 billion in 2024. And it can help drive sales: 68% of customers say that digital signage would make them more likely to buy advertised products.
Tablets, touchscreens, self-serve, self checkout, even “smart” mirrors are all forms of interactive digital signage that provide information to and engage shoppers. Practically speaking, it’s also easier for stores to change out than a physical sign.
Rebecca Minkoff’s interactive mirrors are a prime example. Shoppers stand in front of the smart mirrors and can virtually try on other outfits.
Not only does this enhance the customer experience and drive sales (the brand hit triple-digit growth figures), but it also provides retailers with a wealth of information. Which products did customers try on the most? Which products had affinity with one another? How long did customers spend trying on products? And more…
Leverage IoT for your retail brand
Forward-thinking retailers set themselves up for success by differentiating from their competitors. With IoT, you can improve the customer experience, run a more efficient business, and gain insights to make more informed business decisions.
About the author:
Alexandra Sheehan works with B2B companies in the retail, e-commerce, and travel sectors to create strategies and expert longform, website, and blog content. You can see her work on sites like Shopify, Vend, Stitch Labs, Money Under 30, and more. thealexsheehan.com.