The Internet of Things refers to the ability of equipment and data to connect and interact with each other. The emergence of this technology has significant implications for the future of the online trade industry. Many companies are watching with interest how IoT can improve efficiency and profitability, and ensure all-round satisfaction of all participants. Statistics predict that worldwide spending on IoT will reach $1.1 trillion by 2023.
In this article, we will look at the five ways how this technology is shaping the online trading environment right now. But before plunging into further details, let’s shed light on what IoT is in essence.
Internet of Things as a New Level of Convenience
Any electronic device connected to the Internet and other devices is defined as an IoT. Sensors, or “things”, collect information, which is then analyzed by an application or service to perform a specific function.
Technologies connect and form a giant online network. In it, they communicate and create a new level of user convenience.
Imagine an alarm going off on your phone, signaling the coffee machine and toaster to make breakfast for you. This is an example of the Internet of Things.
For companies, IoT projects are well beyond automatic machinery for the break rooms. They may also include fire detection or sprinkler systems that monitor the equipment, inform about unusual events happening in it, and send alerts to the customer. The ability to observe potential defects before they occur and in between maintenance cycles will increase the level of customer service.
However, IoT devices may see some barriers in their work due to low internet connection. To ensure a seamless experience of ‘setup’, ‘on boarding’, and ‘usage’ of the IoT ‘thing’, progressive web applications may come in handy. As they do not require download and app install, good examples of progressive web apps can be a starting point for the flawless user experience journey.
So now let’s take a closer look at the main impact of IoT on the eCommerce industry.
1. Inventory Management
Deploying an inventory management system using IoT provides a scope of benefits. It includes:
- the ability of real-time communication;
- monitoring where the inventory is;
- determining the lead times;
- minimization of human intervention.
At the warehouse, it is embodied in such a way that when an item passes through a scanner, the system tracks and records it. When the item is used in manufacturing, sold, or written off as a loss, it goes through another scanner which reduces the inventory count for that item. This ensures consistency of the production process without any bottlenecks caused by the lack of critical parts.
IoT, combined with 5G wireless technology enhances warehouse efficiency. This implies better space allocation in terms of usage and activities. Smart shelves and storage bins can inform how much free space is left and how long they have been keeping things.
Here’s such a case in point. Bossard is a fasteners supplier that deals with nuts, bolts, and screws. It started to look into the ways of improving internal logistics and material flows and developed a SmartBin inventory system. A fully automated SmartBin flex is equipped with a weight sensor. The sensors monitor stock levels in the bin and trigger the replenishment process if needed.
IoT paves the way for AI systems to analyze inventory or, say, improve spare parts ordering. The AI system is superior to human counterparts in detecting patterns that a person may miss. If an AI algorithm fails to solve a problem on its own, it will promptly inform a person about the need to pay attention.
The perks of using AI are that it learns with time and adds the solution to its patterns to become smarter. What is more, the use of AI with cloud computing allows you to mine large datasets with sophisticated analytics to make accurate predictions.
Furthermore, IoT systems can integrate with robotics and simplify the work of picking items to fulfill a customer's order. This is a wise decision for most online retailers. Online moguls like Amazon use over 30 000 such robots that pick products and deliver items straight to warehouse workers to save their time.
2. Delivery Enhancement
IoT enables faster delivery offering a transformational change in logistics. IoT in transportation and drones ensures better monitoring and availability in the challenging times of lockdowns and social distancing regulations.
Retailers, eCommerce marketplaces, restaurants, and delivery companies resort to trucks with IoT. Equipped with sensors, they constantly receive information about everything from the conditions inside the container to how much time has passed since the tire was replaced.
Devices send reports to a central location allowing remote monitoring. This ensures that the required conditions in the container are met and that the goods are delivered in optimal condition. The sensors also collect information about the conditions of the truck and indicate the need for preventive maintenance to avoid unexpected downtime.
Besides, AI can carry out predictive analysis and, in combination with real-time location monitoring, correct routes automatically. This will help avoid possible disruptions due to weather conditions and fuel costs.
One of the brightest examples of how drones enhance shipping in eCommerce is Wing, a division of Alphabet. The pandemic caused a sharp increase in demand for such solutions as the majority of the consumers were left at home.
A small drone equipped with a navigation system is designed to deliver small packages without interaction with people. The aircraft, at a height of 6 meters, slowly lowers a package tied to a cable to the ground.
The project was launched in 2012 and from that time it satisfied customers with fast and zero-emission delivery of products from barista-made coffee to library books. The company can now boast more than 100 000 flights across three continents. The priorities of the team are to reduce road congestion and create new economic opportunities.
3. Personalization Opportunities
The Internet of Things provides tweaked opportunities for marketing and promotion. With IoT, you can track customer preferences for certain products, their shopping behavior, and order history.
With this information, online retailers can build a service strategy, deliver personalized offers, and provide options according to preferences and timelines. This helps to build a strong long-term relationship between the end-consumer and the brand, and of course, increase revenues.
What is more, online merchants use big data to personalize and make informed decisions. This data can be obtained from various forums and social media platforms to understand customer requirements. Further marketers can incorporate this information into personalized ads.
As a result, the customer receives a smarter, more responsive, and attentive service. By catering to the customer’s specific needs, the Internet of Things allows the shopper to see the human side of the product.
However, consumers strive to remain part of the community as well. For example, activity tracking apps built into your phone or GPS smartwatches. The collected data goes to the feed, where you can also see the statistics of friends and subscribers. People from all over the world unite in a live mode to become healthy and get positive emotions. This information can become a source for suggestions based on the user's physical activity, health indicators, and eating habits.
4. Shopping Process Automation
IoT allows you to automate the shopping process with computerized checkouts like Amazon Go. Customers come to the store, make a purchase, and leave. They receive the bill on their smartphones with no more queuing and waiting.
Based on the shopping list, the system can predict when a customer will come to the store again and send a request to pack items so that the customer can pick them up faster.
An example is Samsung's Family Hub refrigerator. It provides the ability to remotely view content, play videos, and order products from online stores. To improve customer service and build long-term, mutually beneficial relationships, you should consider connecting your customers' homes to your online store.
5. Relationship Improvement
Things break down, expire, and impair performance. The Internet of Things helps make problems a thing of the past. This technology helps identify service needs, ensures remote monitoring and performance analytics for specific products.
Understanding the functionality of a product and using it to solve specific problems provides the customer with a great brand experience. And companies, in turn, can leverage information about how and why customers use their products and improve interactions.
Moreover, the Internet of Things can help re-engage those who have already bought a product by encouraging them to make other purchases. Thus, the brand remains in the minds of consumers throughout the entire life of the product.
For example, a customer purchases a printer. However, it requires the replacement of cartridges. With built-in smart sensors, the system receives and processes information about how often and for how long the printer is being used. Then it notifies the end-user when it is time to replace the cartridge. Besides, the printer can be configured to automatically order supplies according to a schedule.
Tesla cars are another example of how IoT offers an unprecedented level of predictability. The sensors that scan the vehicle's data have prevented costly repairs at the dealership. The company has encountered a charger bug in over 30 000 vehicles. The sensors sent information to the dealer to intervene, schedule service, and change the necessary parts.
Leading eCommerce companies are rolling out IoT technology for a plethora of reasons. Be it better customer experience, cutting costs, or improving security as the primary concern for businesses.
Just as digital solutions and smartphones replace landline phones and paper, trade is entering a new stage of evolution. To stay relevant in the marketplace and appear reliable, efficient, and cutting-edge to today's customers, businesses are discovering the chapter of the Internet of Things.