When Retail Connects Itself to the Internet

The Internet of Things promises an automation of almost every manual activity.
 When Retail Connects Itself to the Internet

From assisting a customer to make a certain transaction to streamlining the supply chain management, to extracting analytics to trace and attract customers and improving the whole retail experience, the ‘Internet of Things’ promises an automation of almost every manual activity. 

If the tech industry predictions are anything to go by, there would be as many as 30-35 billion installed units until 2020, where all these units or the web-connected physical objects will communicate with each other via the Internet. The IoT has already started revolutionising the way industries such as hospitality, entertainment and retail function. But, that’s not all. In terms of Retail Industry, many still believe that it is like predicting what may happen in the next 5-10 years, let alone its implementation in the present retail scenario. Because IoT is used-based, much like the search engine Google, and before putting the data to generate any piece of information it has to have the data. Simply put, people have to adapt to the technology before knowing how it can be a major disruptor for retail.

India’s IoT Ecosystem

While Prime Minister Narendra Modi’s plan of developing 100 Intelligent and Digital Smart Cities by 2020 may be a step toward expansion of the IoT in the country (for which the government has allocated Rs 7, 060 crore in the maiden union budget), it is well behind China’s current 40 per cent of total mobile Machine-to-Machine (M2M) connections. China is way ahead of even United States and Japan when it comes to deployment of M2M applications, according to a recent GSMA report. Considering the amount of money riding on IoT’s back, India could soon be catching up with other countries in terms of the concept’s expansion and application.

Beyond aims set by the government, a lot of retailers see the IoT as somewhat an unclear concept in terms of creating a business situation and balancing a margin model, and believe in the direct communication between the retailer and the shopper. Whatever the faction shift, shoppers in India still like to take shopping as an experience, or an outing, and will limit the conversation involving things and devices.

IoT in India: Commercially Strong    

Practically, IoT hasn’t been able to create a buzz in the country yet, with only some global automobile retailers having the concept in place for their customers. A survey conducted by Forrester Consulting on behalf of Zebra Technologies reveals the other side and states, “About 88 per cent of businesses in India have deployed IoT solutions.” The survey was conducted across retail, consumer products, manufacturing, transportation, government, oil/gas, healthcare and hospitality industries.

Dr Ganesh Sundaram, Founder and CEO, Alef Mobitech, a New York area firm providing technology mobile Internet solutions In India and beyond, informed that the companies haven’t started talking about it yet. “But I can give you a name that does,” he quips. “Depending on the model, a BMW car has about 6,000 sensors in it. The information is then collected by a tiny computer installed inside the car. The embedded 3G wireless modem in the computer, then, sends information collected from these sensors to the BMW Cloud every six minutes.” Recent examples such as Tata Motors’ sensor-laden trucks, Tech Mahindra’s tie-up with Bosch Software Innovations and Cisco’s and L&T’s tie-ups are enough to determine IoT will do well in India commercially. “Other areas where the impact will be most felt are: supply chain management, marketing and promotions, logistics management, security, customer and warranty services, etc. Radio-frequency identification and bar coding are technologies already optimised by the retailers today,” continues Ganesh.

Consumer Consumption: A Challenge

What often comes to mind is the pervasive technology’s intrusive nature and the costs involved. “IoT is an opportunity, but privacy and who pays what for the services it will offer, are questions that the market will discover in due course of time. If IoT will only lead to erosion of the margins of manufacturers, then the model is not sustainable. The customer will pay for the convenience he is seeking,” said Anupam Bansal, Executive Director, Liberty Group.

Issues like infrastructure, cost of IoT devices and Internet bandwidth are going to be hurdles in way of IoT and its implementation in India. But, for some retailers like Sapna Book Co., who have ventured into the online space and are using IoT aggressively, it is a different story. “We have installed in our stores what we call ‘Buzz Points’, which enables the customers to log in, scout through the various offers available at the bookstore; the customer taps in, searches his way through the library and does all he has to. The information gathered is then used at the time of marketing. We are able to connect with our user in a more targeted fashion today, and therefore are beyond being just a bookstore,” says Nijesh Shah, CEO, SapnaOnline.com (digital wing of Sapna Book House) and Bookadda.com.

Clearly, even as the consumers are about to witness the golden age of retail, it is the retailers who are going to try to win their customers’ trust. A customer would be asked if they’re willing to share the data streams from their devices, before the retailer could analyse the data and act on it.

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