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Retail Tech Summit Panel Explores How IoT Will Drive the Future of Retail

The Retail Tech Summit in San Francisco highlighting “shopping innovation and the Internet of Things” opened up fresh vistas for retail. The lively panel discussion on business and wearables focused on the increased importance of Internet of Things (IoT) in the marketplace and its relationship with increasing the power of omnichannel. Enhancing the customer experience is job #1 for retailers, and wearables now provide a vehicle for creating a more personalized shopping experience that enhances the relationship betweenconsumer and brand, driving sales. Panel members included Matt Allred (Director, Sr. Merchandise Manager of Apparel at Walmart.com), Scott Amyx (Founder & CEO at Amyx+), Kenneth Leung (Director of Line of Business Marketing at Avaya), Mariel Vargas (Senior Product Manager at Macys.com), and Kevin Weston (CEO at Float).

Topics ranged from opportunities for retailers to understand their customers to how nimble businesses can re-create the shopping environment for a better experience. The panel discussed how companies could enhance the customer experience, innovate in stores, and capture data to improve inventory issues. Using technology is about more than just buying hardware. Understanding what information that hardware is showing vital. Panel members talked about their ideas for promoting customer engagement via data analysis. The discussion also focused on the need for using the IoT as part of the shopping experience. Tough questions were raised about how small and mid-sized companies can compete in this new, tech-rich environment. The costs of innovation and functionality were debated. After all, using any kind of technology in stores involves a big commitment. While the conversation moved fluidly between business models, customer experiences, and using data, Matt Allred wrapped all aspects of business and the IoT into one neat package: trust. Omnichannel marketing at any retail company can only move as fast and as far as its customers will let it. Building functionality into a retail ecosystem is important, but creating a strong bond with a customer via enhanced experiences creates a platform for success.

Panel Highlights:

It’s Not Easy Being A Leader
IoT refers to objects that are wirelessly connected and measure some kind of data. Examples include devices that measure how many steps you have taken or a refrigerator that tells you when to buy more milk. It’s clear that the IoT creates a lot of opportunity for retailers, but harnessing the power the IoT offers will require investment. Not every company is comfortable being an early adopter. However, being competitive in the new marketplace requires investment in new technologies. Kenneth Leung, who used to work at Cisco, took note of the technical issues associated with getting a traditional store up-to-date so it can take advantage of cutting-edge technologies. More bandwidth is needed to run applications, but that bandwidth is not always readily available because “the infrastructure that retailers have invested in for the last ten years plus is fixed, the ability to put bandwidth in a store is fixed.” Allred raised the idea that creating an experience that is simple for a consumer is actually tough for the retailer to implement. Every click of the mouse or scan of an item requires reams of code, a broad array of hardware, and a knowledgeable team for support. Regardless of the obstacles to implementing a successful use of the IoT, panel members agreed that it is necessary in order to remain competitive. The power of the IoT data can have a transformative effect on a company’s interaction with the customer. The innovators who provide the best experience win consumer trust (and increased sales).

Hitting the Targets
IoT can help companies with their bottom line and aid their relationship to consumers. Mariel Vargas highlighted the fact that IoT not only helps alleviate inventory problems, but also enhances sales. She recommended dealing with new technologies in phases, noting that businesses need to “ensure they have very clear customer segments to give a semi-personalized experience.” Understanding groups of people is the first step towards greater customization.

For greater personalization, the IoT can step in by providing more specific information about a customer’s needs, wants, or reactions. For example, if a device can automatically sense that you need to buy a product, it needs to send a message to a retailer for that product. Which retailer it contacts will be based on a number of factors. Scott Amyx built on this idea by noting that people are not driven largely by facts or logic. They are mostly driven by their feelings. He spoke of studies that show “consumers want a personalized retail experience.” The IoT can give retailers a window into buying habits, customer reactions, and feelings.

The Future? Be Nimble, Showy
Amyx noted that IoT extends further than just gathering data from the customer. It also moves into the arena of data aggregation. Dealing with a lot of different kinds of data in a useful way is vital to building customer profiles. Using technologies that focus on “facial recognition, voice analysis, body language, [and] hand gestures” will help retailers build a more complete picture of the customer throughout the store visit. In the future, retailers will eventually benefit from cloud-based systems because they will be able to access a pay-per-transaction model. Kevin Watson added that there may be a real benefit for companies to create more showrooms for their products, giving their customers a hands-on experience with added value.

Right now, though, most retailers are still using legacy systems. Big companies can flex their muscle to make tech changes, but what can small and mid-sized businesses do? Watson summed up his view of the issue:“…what it really comes down to is the business model changing.” Smaller companies can benefit by creating a strategy that readily fits the ideals of the IoT at the ground level. Planning is key.

IoT as a growth industry will provide increasing amounts of data for retailers. Being agile in the new retail environment and open to serving consumers in more personalized ways are the new keys to retail success and customer satisfaction.

Originally published on Examiner on June 12, 2015. Author Scott Amyx.

 
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