3/8/2017
For Retailers, IoT Means Connected Consumers, Big Business – WWD
For Retailers, IoT Means Connected Consumers, Big Business
Consumer demands are satisfied with enhanced IoT services that enable connected stores and transparent supply chains.
By Elizabeth Doupnik on February 16, 2017
http://wwd.com/business­news/technology/iot­market­trends­10804712/
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3/8/2017
For Retailers, IoT Means Connected Consumers, Big Business – WWD
Warby Parker in Baltimore
Courtesy
Consumers are driving the retail industry to embrace new technology that’s been
resisted until it was nearly impossible to ignore. A renewed fervor has been injected into
the industry as behemoths like Amazon and Warby Parker are proving the benefits —
and cost savings — of deploying new technology solutions to not only satisfy shoppers,
but streamline workflow and elevate internal infrastructure and communication.
On most retailers’ radar is the implementation of a variety of Internet of Things
solutions in order to connect the consumer to the entire life cycle of a product, provide
internal visibility into the supply chain and expedite inventory fulfillment among other
areas. Here, Lori Mitchell­Keller, general manager of consumer industries at SAP
discusses new frontiers for IoT and how retailers can best survive in a saturated market.
WWD: There’s been a good amount of attention on the connected store — in your
opinion, what’s the next phase of this innovation?
Lori Mitchell­Keller: The connected store is the future of retail. As we’ve seen
recently, traditional brick­and­mortar stores are evolving to incorporate innovative
technology to digitize workflows and enhance the customer experience. To meet
consumer expectations — and to ensure success — retailers must embrace a digital core
in order to achieve a 360­degree view of their customers and their connected experience
across the brand. While we’ve seen the beginning stages of this transition, the next
phase will aim to encompass a complete overhaul of business strategies, as every retailer
will work to bridge the connectivity gap and place technology at the epicenter of their
key business decisions. Before we know it, services like digital dressing rooms, click­to­
brick pickup, and on­floor consultations will be customary in retail stores around the
world.
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3/8/2017
For Retailers, IoT Means Connected Consumers, Big Business – WWD
WWD: In the face of Amazon’s expedited delivery, how can retailers and brands
optimize operations with IoT services?
L.M.K.: The advent of IoT services has brought about completely different business
models, especially in the supply chain. By taking advantage of the power of digital and
IoT, which connects machinery, vehicles, cartons, shelves and finished products, and
measures activity everywhere, smart supply chains are able to deliver to consumers
faster, cheaper and in a more personalized way than before.
In addition to Amazon, a great example of this is Instacart, which enables stores like
Whole Foods to offer shoppers an e­commerce experience on fresh grocery products
without dedicated staff, inventory or store space. Using the sharing economy model,
Instacart integrates its own mobile communications and GPS technology with Whole
Foods’ existing supply chain applications to provide value for consumers and the
business.
WWD: Which brands and retailers are successfully implementing IoT from supply
chain to store floor? What can be attributed to their success?
L.M.K.: Under Armour is pioneering the way brands and retailers are implementing
IoT into every facet of their businesses. Whether it’s using advanced insight to cut down
time in the supply chain cycle, experimenting with personalized footwear, or collecting
and analyzing data in real­time to anticipate consumer demands, Under Armour is at the
forefront of retail innovation. As a brand and retailer, Under Armour has found
tremendous success by using technology to differentiate itself and provide revolutionary
product offerings. Its wearable technology and practice of embedding IoT sensors into
its clothing has propelled the retailer above its competition, allowing Under Armour to
turn analytics into a deeper long­term relationship punctuated by heightened customer
experience and lifestyle value.
WWD: Is it possible for consumers to be over­connected given their current demands?
How can retailers predict and avoid burnout?
L.M.K.: With cloud platforms and IoT enabling every person and asset to be connected
and disrupting all the established rules around business engagement, consumers can now
freely share preferences, allowing companies to become more consumer­centric than
ever. But an increasingly digital environment comes with risks. Privacy is a big concern
globally, and consumer data is sensitive and must be protected. Organizations must
prioritize balancing insights and personalization services with consumers’ desire for
privacy. By implementing strategies to reduce the risk of piracy and unauthorized
sharing, retailers can avoid these risks.
WWD: How is IoT assisting in the achievement of more accurate inventory levels and
understanding the life cycle of a product?
L.M.K.: Not only has digitization and IoT technologies allowed retailers to have
immediate knowledge of their inventory through centralized systems, but it’s created
business value by enabling smart supply chains that are more customer­centric and
personalized than ever before. With omnichannel supply chains, retailers can bypass
existing channels and directly reach the customer for more personalized relationships.
Digital operations powered by IoT capabilities allow focus on available inventory and
product personalization to drive the relationship, from the initial sale to optimizing the
customer revenue potential over time. This means the retailer must be able to not only
deliver the item to a customer, but to monitor usage and provide timely feedback and
actions as part of new set of value added services that boost customer loyalty by
enriching the complete ownership experience.
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