The Impact of the Internet of Things on the Global Retail Market
By Barton Goldenberg
ISM predicts that the biggest impact of the Internet of Things (IoT) will be in the global retail market as according to the 2016 McKinsey Global Institute report, IoT is forecasted to have a total economic impact of between $3.9 and $11 trillion a year by 2025, including $410 billion to $1.2 trillion per year in retail environments. Furthermore, according to Juniper Research, retailers are predicted to invest $2.5 billion in IoT over the next five years. Much of that investment will be for beacons and Radio-Frequency Identification (RFID).
For the now “Connected Consumer”, the era of mass promotion is over. The era of the predominant “Spray and Play” tactic is over. The concept of shooting a promotion and hoping customers will respond to this promotion is now obsolete. Organizations presently have much improved capabilities than in the past to understand and target the profiles of potential customers in sending out personalized messages to them. The ‘Now’ generation of customers (e.g., millennials, Generation Z) are much more knowledgeable about the products/services available on the marketplace and will expect organizations to know their particular wants/needs while simultaneously delighting them. They are thus expecting a much more enhanced customer experience from the organizations that sell and serve them.
Building off the customer’s ability to check in-store pricing and local inventory levels from their mobile devices, IoT can furthermore provide a customized best-price or location-based services (e.g., concierge services) right in the store. Retailers can now know when a specific customer has entered their store. Upon entering, a customer can open up his/her mobile device and give permission to be tracked. This customer can then access specific pricing for him/herself based upon past customer behavior data that the store has gathered. With IoT, retailers can understand and respond proactively in the context of whenever the customer needs help or an incentive to purchase. Stores like North Face and 1-800-Flowers.com are already using Artificial Intelligence (AI) as part of their IoT retail effort to provide personalized recommendations.
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Barton Goldenberg, is the founder and president of ISM Inc., customer-centric strategists/implementers serving best-in-class organizations globally. As a CRM leader for 30 years, he was among the first three inductees in the CRM Hall of Fame. Recognized as a leading “customer-focused” author, his latest book, The Definitive Guide to Social CRM, is hailed as the roadmap for Social CRM success. Barton is a popular speaker on “maximizing customer relationships to gain market insights, customers and profits”. He is a long-term columnist for CRM Magazine and speaker for CRMevolution and frequently quoted in the media.