Customer experience and the IoT in retail: How the IoT can help drive customer centricity

Across the retail industry, businesses are turning to Internet of Things (IoT) devices to supercharge the customer experience and improve operational efficiency. From increasing personalization for shoppers to enabling more seamless service to enhancing product recommendations and beyond, today's retailers can take advantage of the benefits of using IoT in their customer-centric strategies. To illustrate the point, here's a look at some of the benefits of using the IoT in retail to help drive customer centricity and improve operational efficiency.

Supply chain interruptions can be a significant pain point for customers. When the supply chain slows down or becomes disorganized, it becomes harder to provide the level of service retailers want to deliver to customers. Keeping customers informed as to when their order will be fulfilled is a critical step in keeping customers satisfied.  

Fortunately, the IoT can help improve supply chain information—and, by extension, enhance the customer experience. Retailers can use IoT devices to track the status of products in their supply chains in near real-time. That makes it easier to identify and react to problems before they impact customers.

For example, a retailer could use IoT devices to track items in transit from one of its vendors to the store or warehouse. If the shipment is delayed due to bad weather or a transportation issue, the retailer would know about the delay almost instantly. This gives the business more time to notify customers regarding the status of their orders. 

To take this example even further, imagine the retailer also uses IoT devices to achieve visibility into manufacturing operations at its suppliers. With that data, the organization could potentially identify future disruptions, so customers could be informed and modify their orders as desired.

Customer preferences for contactless commerce continue to expand—for example, two-thirds of Americans used tap-and-pay monthly in 2022, up from 3% in 2018. According to Harvard Business Review, that number is expected to grow in coming years as more shoppers start to take contactless checkout and support options for granted. IoT devices' ability to meet customer expectations for contactless service is one of the main benefits of the technology. Or, they can deploy cashierless checkout solutions allowing customers to make purchases without going through a checkout line.

But the use of IoT in retail for a contactless customer experience isn't limited to checking out. Retail businesses can also leverage IoT devices for digital wayfinding and signage, which allows customers to navigate the store to find specific products. In addition, retailers can take advantage of IoT technology to deliver post-sales support without requiring customers to come into a store or having customer service agents physically access a device. Instead, retailers can handle support requests remotely, relying on IoT devices to provide the product data and access they need.

Customers increasingly expect personalized service—56% of customers now expect all offers to be personalized according to Salesforce. In one study by Twilio Segment, 49% of customers said they will likely become repeat buyers after a retailer offers a personalized experience. For that reason, retailers seeking to boost sales and profitability should seek to tailor shopping and customer service experiences for each individual consumer who visits their in-person or virtual stores. Many already do variations of this online. It's common, for instance, to display custom product recommendations to shoppers on an e-commerce site based on their shopping history.

With the IoT, however, retailers can deliver a new level of personalization, and not just in the context of online shopping. A retailer could, for example, use IoT devices to track a shopper's location in a physical store, if the shopper opts in to being tracked,  to determine which products are most interesting to them. It could then send messages to the shopper's smartphone that suggest specific product purchases or display additional product information. Along similar lines, IoT devices inside physical shopping carts could track a customer's purchases, then suggest other items they might wish to buy before checkout. Retailers can also leverage smart kiosks and tablets to personalize shopping experiences and tap new revenue opportunities. Additionally, they can take advantage of multi-edge computing architectures to help speed data processing to provide personalized shopping experiences in near real-time.

Retailers could even potentially use IoT devices to track the status of products that customers have purchased in the past. They could then make near real-time recommendations during online or in-person shopping about what the customer might want to purchase next. For customers that opt-in for data to be collected, IoT sensors attached to a set of power tools could collect data about how often the customer uses each tool. The retailer could then use that data to issue product suggestions that complement the customer's favorite tools.