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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.
Recognize How the IoT Can Set You Apart
With returns continuing to rise, and with retailer policies of allowing returns to any store increasing, the risk of items becoming lost in back rooms—real or metaphorical—also grows. Without the visibility created by the IoT, apparel retailers, in particular, cannot continue to manage growing return rates (now at more than 25 percent), especially if the solution involves buying more inventory to compensate for the inability to accurately track where those returns are located in their enterprise.
Business Challenges Drive IoT Interest
Others exhibit similar discontinuities, as the IoT can deliver greater speed and agility to operations, and may help close the gap between consumer and retailer technological capabilities. However, the connection between the IoT and growing a business faster is often missed. Oftentimes, companies tend to look for payback associated with a specific individual initiative—and with the IoT, that is very difficult because the infrastructure costs are high and need to be amortized across multiple initiatives.
When these points are combined, we can draw one conclusion: too much confusion remains around the valuable use cases for the Internet of Things and the actual business problems it can solve. Until retailers can eliminate that confusion, the technology will remain in labs or pilots, with very few full implementations.
Other opportunities will emerge later, but retailers have immediate problems that need solving, and the IoT will help. One solution would be to partner with a vendor that can help them minimize the initial infrastructure outlay costs, but also allow them to scale as initiatives take hold.
Oliver Guy is the global industry director for retail at Software AG.
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