How IoT Is Gradually Changing The Dynamics Of eCommerce
By LitExtension
Introduction
Internet of Things, or IoT is not an unfamiliar concept when it comes to eCommerce. It is bringing about newer ways to shop and interact with brands from a customer perspective. In addition, it helps brands manage their customers, inventory, and profits better.
In this post, we’ll be providing you how IoT is influencing the eCommerce industry and some IoT trends you can take into consideration.
Without further ado, let’s get this show on the road.
Key Statistics
- The IoT in the retail market is anticipated to reach a market value of around $35.5bn by the year 2025.
- Beacon technology is one of the fastest-growing IoT-based implementations that is expected to grow at a CAGR of around 23% by the end of 2023.
- Close to 77% of the early adopters of smart retail solutions reveal that they help in delivering elevated experiences to consumers.
- The Asia Pacific has one of the highest growth rates of IoT implementations in retail.
6 Ways IoT Is Redefining eCommerce
Inventory Management
One of the major challenges in running an eCommerce business is maintaining adequate inventory levels at all times. Demand is generally unforeseen and it is for this that vendors and eCommerce platforms have to be prepared perpetually.
Thus, store owners need to ensure the level of their inventory. And, IoT comes as a rescue to save the labor force in keeping track of inventory levels.
With the machines powered by artificial intelligence, analytics and Big Data technologies, they can use advanced analytics concepts to look at chunks of historic data and predict what product or service will be in demand in the upcoming weeks. For instance, if there’s a highly-anticipated sporting event coming up, people are going to buy the jerseys of their favorite teams.
Such insights can allow you to be prepared for sudden rise in the demand for products and help you boost sales as well. Besides, with IoT, you can also plan your seasonal sales better by procuring just the right volume of products.
Speaking of procurement, IoT solutions can also automate the process and initiate orders directly to vendors for the refilling or replenishment of specific supplies as they run out of stock. With all these crucial processes being taken care of by machines, you can put your talent pool to where it actually matters like customer service and marketing.
Supply-Chain Management
Having the right volume of products for customers to shop alone isn’t enough to run a successful eCommerce business. Brands wanting to stand out from the competition should ensure the orders of their customers are fulfilled on time every single time.
With IoT, order fulfillment becomes seamless as the supply chain is conveniently optimized for better delivery and procurement. With sensors and RFIDs, businesses can monitor in real-time the whereabouts of their stocks. Even customers can get real-time updates of their orders and look at their products in transit.
This is beneficial for specific market segments like cold storage and logistics companies. The reason lies in the fact that these orders have particular requirements. Hence, extra care needs taking for the quality of products.
Meat products with less shelf life and fragile glassware can be delivered without any hassles through IoT devices that dictate fleet managers and drivers on the most ideal ways to deliver them intact.
Personalization
IoT is all about enabling brands and businesses to become omnipresent. As consumers keep increasing their arsenal of devices, they connect to the internet from more than one medium. Every single medium is an opportunity for brands to tap into the purchasing power of the individual.
When connected devices keep collecting preferences, likes and dislikes and interests of consumers on a daily basis, brands can deliver a personalized shopping experience based on the learning.
For instance, when a user keeps looking at videos of car reviews or checking out Instagram posts about vehicles, it’s an opportunity for automobile manufacturers to engage with them and promote their vehicles and a chance for car loan providers to offer attractive offers to get them to borrow money to buy the vehicle.
Apart from this, IoT is also designed to offer personalized insights that allow customers to make better and informed decisions about their actions. For instance, IoT-enabled refrigerators can visualize consumption charts of their users. Also, they can empower them with details on the items that go untouched, those that get over soon and more.
Redefine Customer Management
eCommerce is getting cluttered by the day and the only way to outdo other brands is by delivering impeccable customer service. IoT definitely helps in achieving this through personalized marketing campaigns and a comprehensive shopping experience.
Amazon Go is an ideal example of delivering quality customer experience by blending two diverse concepts together — conventional shopping and contemporary technology. Innovations like these make shopping more immersive and convenient and let customers have new ways to make mundane practices interesting.
IoT in eCommerce also enables customers to let their devices automatically replenish essentials without their intervention. Through timely reminders and adequate permissions, brands can ensure they retain their customers for long.
Automated Shipping Process
Amazon Go is only the start of an era. What we would see in the coming years would feature advanced automation techniques in shipping processes. IoT analytics will help eCommerce businesses accurately predict when a customer is about to place an order of a particular product and keep it ready for shipment. When the order is placed as predicted, the item will be immediately dispatched, further reducing order fulfillment times.
For the uninitiated, Amazon even has a robotics division, where close to 20,000 robots are working harmoniously with humans to implement automated shipping of orders.
IoT Trends In eCommerce
If all this sounded too futuristic, let’s understand that eCommerce market players around the world are already implementing most of the concepts we just discussed. They are gradually becoming pioneers of IoT-enabled eCommerce, paving the way for others in the space to catch up.
To give you a better idea of what’s coming, here are some of the IoT trends in eCommerce:
Drone Delivery
First, the delivery of products through drones is a concept increasingly being tested by tech mammoths like Amazon. After taking over the roads and water in the form of delivery agents and logistics, Amazon is now going for the sky with drone-based delivery modules. With this, Amazon will be able to deliver goods faster and more efficiently. Same-day delivery would be redefined this way.
Consistent Marketing
Second, IoT is bridging the gap between products explored on smartphones and desktops by the same individuals. The technology can detect if the same person is using multiple devices to check out and place orders. Then, it’ll use the insights to market consistently through creative approaches.
Security
Security is also an important factor in IoT. If data is not protected carefully, high chances are that your valuable information will be leaked for personal purposes.
Hackers have to only find out a loophole in one particular device and break into the entire network. With security concerns on the rise, IoT enablement will work on making networks more secure and intruder-free. Pockets-based information, self-destructing cookies, and more will be implemented.
Less Cost
Last but not least, IoT will also help drastically reduce operational costs for eCommerce businesses. The basic logic here is, fleets will be managed in a better way thanks to automation and analytics. Plus, wastage of resources will be avoided as well.
Factors To Consider When Implementing IoT In eCommerce
Now, implementing IoT in eCommerce is as exciting as it gets. However, this is where business owners need to be careful about joining the bandwagon. Before you decide to implement IoT in retail, there are some factors you need to consider to enable a smooth transition and a higher RoI. Let’s look at some of the inevitable factors.
- Have a clear vision or goal with your IoT implementation. Only a purpose-driven implementation will yield effective results. Competition-driven enablement can lead to lethal business consequences.
- Choose the right tech stack, infrastructure and tools and align them with the goals you have in your mind. That way, both will be mutually complementary.
- Make security a priority as it will help you keep all legalities at bay.
- Budget right and then invest in IoT implementations.
- Work with the right team and ensure your existing talent pool is educated on the newer working methodologies and technologies.
Wrapping Up
So, this is how IoT development solutions are changing retail dynamics. We hope that you have a better overview of the influence of IoT on the eCommerce industry. In addition, our analysis of IoT trends may somewhat help you stay up-to-date.
Don’t forget to check out the LitExtension blog for more eCommerce tips and tricks. Also, we provide in-depth eCommerce platform reviews as well as shopping cart comparisons that help you make a better decision. Besides, you can join our Facebook community where thousands of merchants and marketers share their experience with online selling for more information.
