IoT (Internet of Things) technology has been presented as transformative for many industries, perhaps especially for the retail sector, with huge numbers suggested for growth or economies. For example, in 2015, the American consulting firm McKinsey predicted that the potential global economic impact of the Internet of Things in retail environments would vary between 410 billion and 1.2 trillion dollars per year by 2025.

How could IoT have such an impact? How should retailers use it?

A definition of the Internet of Things is to integrate “inert” objects into a digitally connected world. This is done by adding chips or labels to “things,” which can be read by sensors, meaning that objects that were previously invisible can be Seen, Monitored and analyzed. Bringing the physical and digital worlds together is an exciting prospect for an industry like retail where the Internet has often seriously injured “brick and mortar” businesses.

There are numerous opportunities for innovation with IoT in retail, which merge aspects of online and physical shopping for businesses and consumers. We're going to look at some of the best implementations: personalized, real-time promotions, Lift and Learn digital signage, and automated checkout.

Personalized in-store promotions

We said that IoT unites the digital and physical worlds; responsive digital signage in retail is a great example. It is now possible to use customer data captured from people's online behavior for personalize offers that can be displayed in store via digital signage.

For example, you really like a clothing store, so you download their app to make quick purchases and receive offers and news. You walk into their store; they have sensor technology that Recognizes you and triggers a welcome message that is displayed on a digital signage screen. Data in the app includes what you last viewed, so in-store signage directs you to the item, while at the same time sending a discount code to your phone.

This type of IoT interaction requires a proximity marketing solution. The Beaconstac blog provides a good summary of the differences between the main proximity marketing technologies: RFID, QR codes, tags, and NFC. Using retail signage software, you can set the tag or code reader or tag to trigger content on certain displays. Your choice of display will depend on when you want to reach your customer, maybe when they come in, or maybe while they're waiting in line for payment, or just before they pay on a electronic point of sale (EPOS) screen.

Lift and Learn Signage Solutions

Another way to use IoT to make your retail digital signage solutions more personal and engaging is a solution of Lift and Learn. This is where a product is labeled, so when taken, the label recognizes the customer's interest. Cela then triggers content to be displayed on a screen.

For example, you could use it to show images of different product options, a video about how the product was made, or how it could be used.

Or similarly, you could have a reader and display station in the store, and customers can pick up any labeled product and bring it to the reader to see more information on the screen. This would be useful in stores with technical products or products that may require follow-up, for example, in hardware stores or pharmacies.

You can analyze which products are most often taken by customers for information and consider what additional signs or promotions you could introduce to increase sales.

Automated cash register

So far, we've looked at IoT implementations that trigger digital signage. Another key action for IoT labels is to trigger a payment. By including a label in each product in a store, the checkout process can become automated. When a customer walks past a sensor, the sensor can determine what products the customer has and, if they are registered to participate, they can automatically charge the phone, card, or account they registered.

Perhaps the most famous automated checkout test is Amazon Go, and more retailers are expected to test this technology soon as we get more and more used to paying by smartphone.

According to WorldPay, 16% of global payments at the point of sale were made via an e-wallet and are expected to reach 28% by 2022.

The benefits are obvious: a quick and easy transaction (and for the moment at least, something new) for the customer, reduced personnel costs for the store, less space needed for checkouts and points of sale, and a huge quantity intelligence on customer buying behavior.