5 Ways the Internet of Things Can Disrupt Traditional Retailing

When e-commerce happened, the experts predicted a doomsday scenario for the brick and mortar retail setups. Initially, the online retail space did impact them, but we are slowly seeing a market rationalization. The players in both the spaces realize that consumers today want a more holistic shopping experience where they can seamlessly move from online to offline.

In India, we are seeing popular e-commerce players like,, etc. moving into the offline space, while traditional retailers say Nalli (a popular saree brand) or Health & Glow (a wellness retailer) moving into the online space. Flipkart, for instance, has opened 20 stores across the country, where consumers can pick up the products that they have ordered online. According to Urban Ladder CMO, Sanjay Gupta, the reason for starting an experience center for buyers was to allow them to get a feel of the products before they buy it online.

While this transition is taking place, there is another way that the retail space is experiencing a disruption – the advent of next generation technologies like Big Data Analytics and IoT aimed to make the stores ‘Smart’. According to an Accenture Report of Five Game-Changing Technologies for Retailers, the IoT movement offers retailers opportunities in three critical areas: customer experience, the supply chain, and new channels and revenue streams.

Emphasizing this point, Sunil Bajaj, Director – Retail & CPG Practice, Aspire Systems, the company that recently launched its Phygital Retail Solution PRIOS said, “We aim to unify the physical and digital shopping experience by enabling a consumer’s digital journey into the store, in a very contextualized and personalized way. We are bringing digital, IoT and big data together within a framework to integrate with in-store solutions in order to enhance the overall customer experience”.




IBM Watson states that Cognitive + Retail = Future.

How do we define cognitive computing?

Cognitive computing is a new computation paradigm that…

  • Learns and builds knowledge from various structured and unstructured sources of information
  • Understands natural language and interacts more naturally with humans
  • Enhances the quality and consistency of decision-making across an organization

Cognitive computing allows organizations to bridge this performance gap, overcoming limitations of both humans and machines. The human brain can consume and process only a limited amount of information and are prone to making mistakes. Traditional analytical systems struggle with ambiguity. The traditional paradigm of computing is pre-programmed and rigid, unable to learn, reason, relate or interact in natural language. Cognitive systems, understand natural language and can interact more intuitively with human beings.

The advent and impact of the emerging technologies – IOT, Cognitive and Cloud will be the point of discussion at IBM’s Cloud Innovation Forum in Bangalore on 7th of December.  This is a part of a month-long series called Outthink tour, held in Bangalore, Mumbai, and Delhi. One of the highlights at the Cloud Forum will be Ray Wang, principal analyst and Chairman at Constellation Research, apart from a host of very seasoned IBM leaders.

If we see the above in light of 3 focus areas depicted by the IBM Institute for Business Values, it becomes clear as to how we retail can harness the impending transformation more meaningfully:

A. Engage: Today’s customers want speed, transparency and personal interaction with their retailers. A significant gap exists between customer expectations and the ability of retailers to deliver. Retailers find it especially difficult to resolve customer issues because of a lack of standard procedures and insufficiently skilled resources. Many retailers lack capabilities to use the vast amount of customer data available to create insights, find patterns and deliver relevant experiences

B. Discover: Retailers face challenges in identifying the right value proposition that can win them customer loyalty. They are confronted with challenges in identifying technology and innovation that can differentiate them from others and help them create new, unique and sustainable business models.

C. Decide: Strategic decision-making is especially difficult in circumstances where retailers lack understanding about how to use data and analytics to support decisions.  (Read More here)

Let’s have a look into the impact areas Big Data and IoT will have on retail transformation:

1. Smart sales: We already have smart digital signage that push-ads targeted at specific sets of customers in the store, or price changes are shown real-time to push target sales in the store. MarketsandMarkets expects the global market value for digital signage to grow to $23.7 billion in 2020 from $15.8 billion in 2015.

2. Smart shelves: Inventory management will become easier for the retailers. IoT and Big Data Analytics will enable smart shelves in stores that will be able to detect when inventory is low. You will see smart robots work autonomously to help in areas ranging from stock replenishment to product assembly to hazardous materials handling.

3. Smart shopping: According to Aspire’s Bajaj, the Phygital retail solutions based on Big Data and IoT will blend online and physical worlds for cross-channel efficiencies. It will empower the store associates by providing real-time insights to drive sales and ensure better customer engagement. On the other hand, customers can use their smartphones or wearable devices to quickly scan an item and draw up product information, reviews or social media commentary

Then we see the emergence of smart mirrors that let customers virtually try on clothes. This enhances the shopping experience and improves shopper convenience by not having them travel to and from the fitting rooms which often impacts a buying decision.

4. Smart service: Retailers will be able to make payments seamless using a multitude of personal devices. In the coming few years, we can expect to see a rapid increase in mobile payments, self-checkout counters, and smart in-store navigation.

5. Smart retailer: IoT will enable the retailers to predict what the consumer wants as soon as he or she enters the store. Cognitive will allow a better understanding of consumer behavior by making sense of their purchase patterns and bringing in context. The metadata collected through IoT devices will allow the retailer to get contextual cues as to why a consumer has come into the store. This will help further personalize the retail experience not only in the digital store but also in the physical store.  The retailer’s final goal of ubiquitous, seamless shopping experience will be achieved.

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