The rise of the Internet of Things (IoT) is one of the biggest and most exciting technological trends currently taking place. At its most basic level, IoT refers to devices such as sensors, smartphones and wearables that collect data and communicate with each other over the Internet. In the retail setting, IoT has the potential to enable new capabilities and completely transform the way retailers interact with customers, both in-store and online. It can also help retailers identify operational efficiencies, gain a real-time view of inventory across the entire supply chain, and connect the digital and physical worlds together to create new omnichannel experiences.
With all this potential, it’s no wonder Juniper Research estimates the retail industry will spend $2.5 billion on IoT technologies in 2020. But it can be all too easy to get caught up in the IoT hype and purchase new equipment without considering the impact on your larger IT strategy or your existing retail IT infrastructure. As the Internet of Things becomes a reality, the time is now to start thinking about how these new devices and technologies can integrate into your current, and future, retail IT environment.
Develop a Clear, and Focused, IoT Strategy
IoT is a very broad term, and this lack of clarity can be intimidating and sometimes overwhelming. To make it more manageable, you need to clearly define your objectives, goals and strategies surrounding IoT. All departments and functional areas, from marketing and operations to IT and finance, need to be involved in this process from the start since each will have its own unique requirements. It may be valuable to consult with a retail IT service provider who has experience in IoT to help guide your strategy and deployment. Without this strategic focus, you could end up with a random collection of “things” that don’t perform the way they are supposed to.
Understand the Impact on your Retail IT Infrastructure
Retailers, and the stores themselves, already have fairly complex IT environments. This complexity will only increase as new devices, such as building management sensors, smart shelves or digital signage are installed and connected. Ensuring these new devices can integrate into the existing infrastructure, seamlessly connect with each other, and communicate data back to the retailer for analysis, is a must when deploying an effective IoT solution. Supporting systems, such as analytics software, data storage, and the network itself, also need to be in place to collect, analyze and store the vast amount data that results from all these connected devices.
And it’s not enough to just plan for today. As IoT matures, current systems will need to expand to include the new technologies and applications that become available. Taking a long term approach to IoT, and considering the future impacts of technology on your retail IT environment, is the only way to ensure you are prepared when these new technologies arrive.
Build in Security from the Start
As with any other retail IT investment, security needs to be a priority when implementing a new IoT strategy. Every device that is connected to the network creates a potential vulnerability for hackers or other malicious actors to exploit. And with so many connected devices being introduced to the network as a result of the Internet of Things, you simply cannot afford to ignore security.
The stakes can be huge. IBM has shown that the cost of a successful breach is $3.79 million. But as recent high-profile breaches have demonstrated, the true cost of an attack extends far beyond that to include the damage to the brand’s reputation, loss of consumer trust, and potential lost sales as customers choose another store. Since IoT’s primary application is to collect and store sensitive, and often personal, customer information, retailers must be responsible and protect it from falling into the wrong hands.
Don’t Take a Haphazard Approach to IoT
IoT will change the way retailers operate and interact with customers. The retailers who successfully implement an IoT strategy will be the ones that develop a clear understanding of how each piece of equipment aligns with their objectives, and how new technologies will impact their existing retail IT infrastructure. As IoT continues to pick up speed, this strategic approach is critical to ensuring new devices can deliver on their promises. Those who get it right will be able to significantly improve the customer experience, derive new operational efficiencies, and gain a competitive advantage over those who fall behind.
How is your organization planning to harness the power of IoT this year? Leave a comment below.