As we lead up to NRF 2015, this week Supply Chain Nation turns its focus to trends impacting digital retail. Follow along each day this week as we explore a new topic related to retailing in the digital age.
The Internet of Things (IoT) is part of the next wave of innovation in digital retail. It will rock our world in the next five years, just as omni-channel retailing has for the last five.
Digital business that interacts with the Internet of Things will create completely new business opportunities. It will begin to blur the lines between retailer and manufacturer, between retailer and consumer.
Let’s look at a couple of examples to highlight what is coming. The easiest way to define the Internet of Things (IoT) is to visualize the numerous ways that an intelligent sensor could make your life easier.
What if your refrigerator knows when you are low on milk and eggs and can send an order to your local grocery store, have it delivered, charge your credit card, and apply your loyalty rewards?
How amazing will it be when your medicine cabinet knows when you need a refill and sends the request to the pharmacy, which processes your insurance, charges your credit card and delivers it to your door?
What if your house could tell you when it detects that there is leak in the pipes above the ceiling and requests a plumber, and then senses damage that has already occurred and orders the matching paint and spackle and gets quotes on new flooring? The internet of things will be able to do something as simple as detecting an air filter that needs to be replaced or plants that need to be watered and fertilized, and then will communicate with other machines to make it happen. Could we please have the smoke alarm order its own batteries?
That is the beauty of the Internet of Things. Things talking to things without human intervention based on your parameters of best price, fastest service, or desired loyalty program, in order to make our lives run smoother.
What if you had a sensor on your washing machine that tells the manufacturer when maintenance is due, or when the warranty is about to expire? If you have a new washing machine, you probably already have this. Your new machine can already figure out how much water to add, how much time to wash and spin, and when it needs to be cleaned, without any intervention from you.
So what does all of this mean to you, the retailer? It is your job to find the communication that is coming from the sensors and successfully negotiate for the business. It is no longer consumer to retailer negotiation, it is machine to machine negotiation.
First before all else, your data must be clean. You must know exactly what inventory you have available to offer, and what your profitability point is in order to win that offer.
Second, your pricing must be consistent and competitive.
Third, your loyalty programs must be valuable and connected to your loyal and most profitable customers.
And finally, your systems must be good enough to communicate with the request to say “Yes, we’ve got that”.
Now you are ready to play in the land of the Internet of Things.
To read other entries in this Digital Retail blog series, click here.