Head of IoT Marketing, Vodafone Internet of Things
5 ways IoT is revolutionising retail marketing
Some time ago, I wrote about how the Internet of Things [IoT] has the potential to transform every pillar of the marketing function.
That’s true for nearly all sectors, so I want to examine in a bit more detail how IoT can be harnessed to create new marketing strategies in some of the economy’s leading verticals. It probably makes sense for me to start with the retail sector because of its size and the enormous challenges it faces.
The sector still accounts for about 30% of the global economy with worldwide sales of more than US$ 22 trillion. However, traditional stores are being severely tested by increased competition, surging ecommerce and the arrival of a whole new generation of mobile ‘digitally-savvy’ shoppers with completely different ideas of what they want to buy and how they want to buy it.
Fortunately, IoT-enabled marketing strategies can help retailers bridge this gap between today’s new digital expectations and the physical reality of traditional in-store shopping. And here are five ways I think they can do it.
1. Seamless selling
Product availability, ease of payment and quick delivery are some of the reasons why ecommerce is growing four times faster than the retail sector as a whole.
Yet IoT technology can help marketers develop the same seamless user experience for in-store shoppers as they find online.
For example, store room trays, shelving or individual products can be fitted with sensors to monitor stock, avoid shortages and give customers online visibility of product availability before they visit the store. Wirelessly-connected mobile point of sale terminals allow shop floor staff to accept payments anywhere in the store, preventing long-lines at the checkout while connected in-cab monitoring systems ensure delivery drivers arrive on time and allow consumers to track their purchases.
2. Personalised service
Around two-thirds of customers also complain about the lack of personalised promotions or individual guidance from shop floor staff; leaving them confused about where to find the best products for their particular requirements.
Fortunately, IoT can help here as well, and in the process, free marketers from the old one-size-fits-all personas that they are accustomed to using.
Equipping shop floor staff with mobile tablets containing detailed information about products, stock, location and even the buying habits of the person the staff member is talking to can make the customer experience more convenient, engaging and personal.
3. Contextualised communications
One of the biggest advantages of IoT is its ability to target consumers with contextualised messages wherever they are and whatever they’re doing.
For example, digital signage allows in- and out-of-store advertisers to deliver, tailored, localised content that can be changed according to the time of day, the weather or even the demographics of the person in front of it.
At the same time, location-based marketing tools can exactly locate a smartphone user and allow retailers to direct specific content or targeted vouchers to customers that are passing by or those in a particular part of the store.
4. Experiential engagement
‘Digital native’ Millennials (born between 1980 and 1995) have now overtaken Baby Boomers as the world’s largest group of shoppers. And, as their posts on social media suggest, they are more interested in having unique experiences than simply buying stuff.
So, the challenge for marketers is to harness IoT to better engage these new consumers and make it easier for them to access a product in the way they want to buy it.
A good example is Vodafone’s partnership with international clothing retailer Mango to develop new interactive fitting rooms. Using an IoT digital mirror, customers can scan clothes tags and then contact staff equipped with digital watches to request different sizes or colours without having to leave the fitting room. And the mirror can also suggest additional clothes to complement the original choice.
5. Insightful analysis
Last but not least, underpinning this new seamless, personalised, localised and experiential shopping experience is one fundamental value that IoT offers: new, detailed, real-time data to better understand consumers.
Combined with analytical tools and marketing automation, the richness and reliability of this data can provide marketers with far more accurate insights into real consumer behaviour and the factors that affect it. By taking marketing beyond its traditional reliance on focus groups, IoT gives us a leading role in creating the more innovative, customer-centric and profitable stores of the future.
As I hope you can see, the opportunities are enormous. But if you’d like to find out more about how Vodafone can help retailers harness IoT to operate more efficiently, simplify processes and more deeply engage with customers, take a look at our new White Paper: Rethinking retail, or contact us to discuss your options.