How IoT Can Improve the Retail Customer Experience

Sep 25, 2015

IOT-imageIn a fraction of a lifetime the Internet went from being painfully slow and untrusted to one of the most important technologies on the face of the planet. Combine that with the growing acceptance of connected things (estimated at 38.5 billion) and you’ve got the makings of a monumental digital shift poised to disrupt every industry and enterprise known to man. Déjà vu.

While many companies are still laser focused on creating a seamless digital experience, others are exploring innovative ways to leverage connected every-things and their resulting insights – at scale – in new and exciting ways across previously unsought touchpoints. Almost 90% of digital marketing leaders agree that IoT will significantly impact customer engagement. The triumvirate of the connected consumer, API economy and digital enterprise has quickly become a sweet spot for leaders looking to capitalize on consumer expectations around more personalized experiences and engagement.

Three Promising Pilots

In conjunction with a start-up called Hointer, Macy’s recently tested fitting room technology that delivered products to shoppers without requiring them to leave the fitting room or better yet, schlep wanted or unwanted clothes. In their smart showroom, Hointer shows retailers how easy it is to connect shoppers with requested items using a micro-warehouse and a chute-to-fitting-room system – in under 30 seconds. Shoppers scan products (only one is available on display) via an app and receive their items in the fitting room. Macy’s recently tested this technology with their swimwear and active wear departments.

If you’re not ready to follow in omnichannel retailing leader Macy’s footsteps, you can still leverage in-app bar code scanning capabilities and other app features like mobile checkout, assistance request, and encourage peer feedback to empower the shopper in-store. For example, one innovative retailer utilized beacons and their mobile app to deliver in-app messages and rewards for trying on clothes. They also offered shoppers a chance to win a prize for trying on items from special clothing lines. Whatever you do, don’t over-engineer or complicate the experience; after all, your focus should be on improving the customer experience to build loyalty.

Niemann Foods’ County Market is another great example of a retailer leveraging beacons to improve engagement. The grocery store serves up real-time, personalized and relevant offers and coupons based on the shoppers location in-store and previous purchases tied to the loyalty program, as well as engaging features such as sharable shopping lists and in-store maps – all via their app. And the results speak for themselves. Redemptions for in-store offers are about 50% (industry average for print coupons is less than 2%) and have a 600% greater open rate than mass marketed offers.

Coca-Cola is building location-based campaigns using beacons by partnering with a major third party app provider at CAPA cinema. A free Coke was offered via the third party app. Those who redeemed the offer were retargeted a week later with a free next visit cinema ticket. Using this data and the beacons, Coke was able to develop campaigns around more robust customer profiles – connecting offline with online. By partnering with a popular third party – one that users engage with on a daily basis – Coke overcame the hurdle of getting people to download and engage with their owned channel in the cinema. Not only was the pilot a success, it also proved to be a scalable solution that can continue to provide hyper-relevance through proximity marketing.

Getting Started? Consider Beacons.

Beacons are a great way to dip one’s toe into the proverbial IoT waters. And while IoT is about connecting just about any and everything – from your fridge, home security, and sprinklers to your watch or even clothes – to drive better experiences, many retailers are seeing impressive benefits. Obviously, beacons can deliver information about consumer shopping habits and patterns but the big win here is in increasing customer engagement (retailers report 59% are more engaged) and the opportunity to improve sales (24%). Retailers also report benefits including customer targeting at the aisle level, relevant and compelling in-store offers, and increased offer redemption, which was also evident in the County Market pilot example above. On the flipside, the biggest hurdle you’ll likely face is connecting back-end systems and overcoming security concerns across access points.

Like the early days of the Internet, IoT will certainly have a profound impact on the way we create experiences and engage consumers through previously disconnected things. The real winners are those exploring how all this new data can drive real-time intelligence in an actionable and measurable way to create moments that matter.

Are you leveraging beacons or exploring the Internet of Things? If so, drop us a line. We’d love to hear your story.