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Three IoT Considerations Retailers Must Keep in Mind for 2018

The Internet of Things, powered by RFID technology, can help stores manage inventory more efficiently, set themselves apart from competitors, and provide great customer service while still maintaining streamlined operations.
By Oliver Guy
Jan 18, 2018

The Internet of Things (IoT) is one of those technologies that offers the ability to reduce costs, improve efficiency, enhance customer understanding and improve overall business visibility, all at the same time. For consumers looking for the most innovative and seamless shopping experience, it is patently obvious which retailers have taken on digital transformation and embraced the IoT and radio frequency identification (RFID). It is also quite clear which are slow to adapt to the new technology.

So why aren't all retailers rushing to adopt it?

RFID is arguably the origin of the IoT. Approximately 15 years ago, RFID was first becoming a hot topic in retail and distribution-intensive industries. At the time, there was speculation that it could become as ubiquitous as the bar code once Walmart got behind it. Now, RFID still has massive potential in retail—specifically, to help understand exactly where in the supply chain specific packages or items are in real time. Given the complexity of the omnichannel supply chain, this visibility is more important now than ever.

Another reason retailers have been slow to adapt to digital transformation is that RFID does not have as many immediate customer-facing ramifications as other potential technology investments, like artificial intelligence and robots. But given that RFID can boost inventory accuracy to 95 percent, retailers not leveraging the technology could truly be missing out.

One big challenge brought about by omnichannel retailing is that retailers cannot sell a product if employees don't know exactly where it is located. A product cannot be picked up from a store unless the retailer is certain that the product is there—and RFID has the potential to fix this. As RSR points out, investing in "closer consumer engagement is useless without system-wide inventory visibility and accuracy for cross-channel orders & fulfillment."

As RFID has come to fulfill its promise of potential, retailers should consider the following points as the IoT is poised to take off in retail technology.

Manage Inventory Efficiently
An immediate opportunity with the IoT is efficient finding and managing of inventory. You might think a particular stock-keeping unit (SKU) is somewhere in the store, but how can you quickly find it? In distribution centers, locator systems and bar codes help workers find products, but in stores, you need to rely on employees to sift through products in a back room—and hope that they display the items at the correct locations. Using IoT technologies can help personnel locate these items more quickly and efficiently.

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