5 Reasons why retailers don’t “get” IoT

Katerina Bukhvostova

Excuse our passion for tech but if there is something substantial to retail innovation we haven’t yet talked about, it has to be Internet of Things (IoT)!

In the year 2017, it’s practically impossible that this glorious buzzword hasn’t reached your ears with increasing talks in the media about drones, artificial intelligence, smart cities, connected devices and machine learning. With the levels of hype surrounding the term, it might be still hard to believe that all this is actually happening.
When it comes to retail, a very traditional industry in the way it operates and treats customers, the sphere of IoT application has barely been explored. While researchers are claiming the market to be worth close to 95 billion by 2025 and Amazon once again pushing the boundaries by introducing grocery stores without checkouts, a lot of retailers are still unaware of either what the actual term comprises, whether it is more than a marketing trick and if it includes any feasible benefits to their business in the near future. As a result, the adoption rate is slowed down by a number of factors which, if provided with enough information, could set retailers on a right path and help with the difficulties their businesses are already experiencing due to the increasing role of eCommerce.
Let’s take a quick look at what IoT means in the context of retail and get down to the reasons behind retailers’ inactivity.

How does retail IoT work?

IoT is all about connectivity, intelligence, automation, interacting devices and gadgets that autonomously connect to each other (as well as to the Internet) and make our lives easier. It’s about blurring the boundaries and making a single unity of the digital and the physical spaces. One of the first commercial uses of IoT was the introduction of a very straightforward Amazon Dash Button launched in 2015 for ordering basic household products with a single press of a button installed right where those household products are kept. 
Some elements of IoT are already in use by brick-and-mortar retailers. Self-checkouts, RFID tags and sensors, interactive and digital displays, smart shelves, mirrors and virtual closets provide a new look into the supply chain management system, daily operations and staffing, help to reduce queueing and, needless to say, drastically affect overall customer satisfaction and brand loyalty. We are going to look closer at each of these elements in our next IoT-themed blog post.
Even though it is too early for a complete picture of a customer yet, the evolution that comes with the era of IoT does not show any signs of the slowdown. Then why with such an abundance of different vendors on the market providing all kinds of innovative solutions, IoT is not yet on top of retailers’ minds?
Here’s our list of potential reasons:

1.    IoT is still an unfamiliar term.

Open for talking about innovation, but following the familiar path, senior retail management is a hard nut to crack when interfering with traditional methods of doing business. Failing to understand that not being those retailers that foster innovation here and now - not sometime in the future - could potentially be the biggest mistake they are making. The competition is as high as ever, a digitally enabled customer is compelled to swap you for another player unless you have something better or more personalised to offer. So let the first step be the switch in the overall attitude.

2.    Combining online with offline is a challenge.

The fascinating rise of eCommerce together with the fact that mobile web usage now officially overtakes desktop clearly indicate that consumer habits have changed. Smoothing out the processes such as faster delivery and easier returns, introducing already very popular among retailers click-and-collect would, no doubt, make the future transition to IoT less stressful.

3.    Solutions are often tested in isolation.

According to Deloitte’s Closing the digital divide report, over 70 percent of retailers are only testing solutions and expect immediate results, which are not easily achievable taking into account the nature of IoT. As important it is to set the priorities of what they are trying to achieve in the immediate future, as crucial it is for retailers to realise that true IoT is about integrating all aspects of business – not just a single layer, for example only inventory management. Introducing Walkbase IoT to your business, it’s possible to start with the very basics and utilise the diverse capabilities of our marketing automation technology for connecting with other tools in the future.

4.    Security and privacy concerns are scaring retailers off.

The worries of both consumers and retailers regarding the risks of consumer technology and potential security breaches are hotly discussed in the media. The more connected devices are out there, the higher chance something may go wrong. However, in many cases, the technology itself does not require any personal information to be detected, which is the case of offline customer analytics

5.    Retailers simply don’t know where to start.

Wouldn’t it be smart to start with what you already have easy access to? We are talking about the sensors customers are already carrying in the mobile phones. The real-time data on offline customer behaviour and footfall is gold for retailers in the age of an instant-gratification consumer and a solid first step towards setting up an IoT environment.

Are retailers going to change their attitude any time soon?  

Increasing staff costs, higher lease rates, the ever growing role of eCommerce are all very clear indicators pointing at the fact that if retailers continue taking a wait-and-see approach for too long, they are likely to face a number of challenges in the near future. And they are already experiencing these difficulties inevitably leading to stores closing down.

Whether using IoT means standing out among the competition by offering better customisation or greater products, or a strategic choice, our advice is not to hesitate and start looking into the solutions that would match your business priorities as soon as possible.

Meanwhile, we’ll be happy to chat more on the topic of retail IoT, so please feel free to get in touch anytime! Another great place for starting the discussion is our LinkedIn group, which you are very welcome to join. 


Walkbase provides a retail analytics solution for improving the impact of marketing on physical stores and personalising in-store shopping experience.