With so many eyes on the Internet of Things (IoT) it’s no wonder that we have blurred vision. Ask 10 people for a definition of IoT and you may get 10 different answers, with mentions of the Internet, cloud, data, devices, mobility, sensors and more. ISO, the International Standards Organization, has its own: “An infrastructure of interconnected objects, people, systems and information resources together with intelligent services to allow them to process information of the physical and the virtual world and react.”
If that definition speaks to you, congratulations. But if not, don’t worry. Any existing definition is less important than retailers determining what it means to them and their customers and then acting on it. I often advise retailers to define IoT and not let it define them.
I consider the big three enabling IoT technologies and solutions to include mobile devices, solutions and platforms (e.g. device management, WiFi, Bluetooth); AutoID and AIDC technologies (e.g. barcode, NFC, RFID); and machine-to-machine (M2M) technologies. Interestingly, the first mention of IoT was in papers published by the MIT AutoID Center in 1999, in which RFID was mentioned as a key enabler. That vision has since then been expanded to include many other sensors, devices and communication methods, but retailers who have an RFID pilot or implementation in place clearly have a leg up in approaching IoT.
So what should IoT mean to you? Well, what is your most vexing problem? Perhaps you want to empower or connect to more customers through a smartly enabled mobile app experience (e.g., mobile marketing). If you are like most retailers, loyalty customers are responsible for up to 80 percent of your sales. So you may enhance your loyalty programs first, so valued shoppers can receive special offers on their smart phones after communicating with an iBeacon in their favorite store.
When it comes to IoT solutions in retail, however, the approaches are many and the applications vary. Perhaps omni-channel is your biggest pain point? Or providing a richer, more interactive experience through digital tags and interactive displays; personalized virtual closets that match items at home using purchasing histories; or RFID-enabled smart dressing rooms and magic mirrors? For others, speed may be king (i.e., inventory cycle counting, throughput at checkout, customer service on the store floor). Or a retailer moving into new markets may prefer to focus first on better understanding customers in new geographies or for new product categories.
The point is that retailers should figure out which difficult and finite problem they want to address first by deploying an IoT-enabled solution, rather than try to attack all pain points at once.
Once you determine that critical piece of the IoT puzzle, consider these other recommendations:
• Think more strategically about IoT by creating ‘elevated business intelligence’ that includes applied business intelligence, activity based intelligence and event intelligence.
• Review your existing technologies, solutions and platforms, and consider how they may play into your IoT strategy (every retailer has something in place – be it store kiosks, loyalty apps, RFID, etc.). Then see what’s missing in terms of solutions and capabilities and begin to fill the gaps by building on it.
• Cloud-based solutions are critical to fulfilling the promise of IoT; however, too few people are really talking about the data stored in clouds or how to effectively leverage that data by turning it into actionable and meaningful information. The opportunity (at least to me) is clear: it is the attention to and treatment of that data that will determine overall success within IoT.
• Seek out trusted consultants and/or solutions providers to help formulate your IoT strategy and implement it.
• Remember to define IoT and not let it define you.
In truth, IoT is more than just about shiny objects and hype. It’s about devices, processes and people – and how they are all connected. And based upon my many conversations with them, savvy retailers are figuring out that they can harness IoT to make their operations more agile and become more responsive to their shopping customers.