Retail success can be summed up in one line: ensuring the right products are stocked in the right quantity at the right time. This is definitely not easy to achieve since in today’s globalist world, there are an umpteen number of factors that challenge efficiency of business operations and sustained success.
Challenges are numerous such as, business may not be able to zero in on the right suppliers or the right price, employees may not be skilled enough to provide niche Supply Chain support, and then there is the perpetual problem of dealing with finicky customers.
In the face of ever-increasing challenges right from customers to suppliers and even internal employees businesses need to deal with a number of stakeholders to ensure that their Supply Chain processes are steered in the right direction. Today’s digital era, despite its many challenges, is the most opportune time for businesses to initiate, expand, and operate profitably, all thanks to upcoming technologies. The advent of the digital era has brought with it a strong focus on cutting edge technologies. Reliance on innovation is what drives the world and will shape the world for better.
One such technology that has taken the world by storm is the Internet of Things and Advanced Analytics. Internet of Things or better known as IoT is the talk of the town. This technology has become a growing topic of conversation among industry professionals, new or old. So what exactly is Internet of Things? Simply put, IoT is about connecting the world.
It is about connecting everything that can be connected.
The concept basically revolves around connecting device with an on and off switch to the Internet (and/or to each other). According to a research by Gartner, by 2020 there will be over 26 billion connected devices.
Thanks to IoT, the world will be a giant ball, with each point connected to another, leading to unimaginable communication, collaboration, thought-sharing, time-sharing and much more interactions among people and people, people and things and even among things and things.
IoT is something that seems out of a sci-fi novel but it is indeed what the world has already started witnessing. Self-driven cars and wearable devices are some of the many examples that are based on the concept of Internet of Things.
The supply chain for high tech industry is not far behind.
Gartner** released a write-up highlighting what many Supply Chain professionals have been weighing for some time: the IoT trend is going to impact businesses and in particular it will disrupt the way we think about logistics. In the piece, Gartner says a thirty-fold increase in Internet-connected physical devices by the year 2020 will “significantly alter how the Supply Chain operates.” Specifically, it notes the impact will relate to how Supply Chain leaders will access information, among other things.
Let’s take an example of how IoT can help shape demand and inventory management. Demand shaping, as the name suggests, is the concept which involves offering consumers products that are most profitable for the retailer. We see demand shaping in the form of markdowns or discounts. These traditional ways of eliminating overstocked situations reduces retailer’s margins.
So, how can IoT help in such situations?
Instead of trying to eliminate imbalance in inventory and trying to minimize loss, retailers can leverage IoT to target specific customers with tailor-made offers. With IoT, retailers can have access to invaluable customer information. Right from personal details to geographical, behavioral and psycho graphic information, retailers can make use of this real time data to reach out to their customers with specific tailor-made bundles and offerings.
What does it mean?
By tapping into its database, IOT can look for customer preferences; their purchase history, geographical location, and other psycho-graphic factors and this way create personalized offers targeted for individual customers, offering them exactly what would interest them. Through IoT retailers can implement smart marketing tactics and target customers with products that they may be interested in buying at that particular time, thus helping in reducing the overstocked products. Retailers can offer some discounts or maybe bundle it with other products to encourage customers to buy the products.
Personalized marketing is the future.
How well a retailer is able to curate products for every specific customer will soon become the blinding difference between success and irrelevance. With IoT in place, smart retail businesses can work on personalized marketing which will help them in improving their margin, while giving the customers just what they are looking for; a win-win situation for both customers and retailers.