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Five Considerations When Choosing an AI Solution for Your Retail Enterprise
According to a Digital Commerce 360 review of US Department of Commerce data, offline sales accounted for more than three-quarters of overall retail expenditure growth in 2021, or 80.7%, while eCommerce accounted for the remaining 19.3%. This is in contrast to 2020 when many businesses were closed and health-related concerns kept buyers away from physical stores, internet shopping accounted for the majority of increased retail dollars spent. Back then, digital revenue accounted for more than two-thirds of retail gains (69.1%), with offline expenditure accounting for the remaining 30.9%.
So, while there is an increase in eCommerce over 2019, there still is ‘demand’ to walk into physical stores, and retailers need to pull out all stops to ensure such stores not only provide a great indoor experience but are also cost-effective. Consumers’ buying behavior has shifted for good and retailers need fresh strategies that ensure their survivability in a fast-changing world of technology. That’s where the Internet of Things (IoT) technologies play a major role.
As the IoT solutions become more integrated with mission-critical services like HVAC systems, smart grids, and emergency alert systems, traditional commercial buildings are becoming increasingly smarter.
This sentiment is also reflected by the exponential increase in adoption of IoT implementation by retailers post-pandemic. According to another study by Markets & Markets:
IoT is gradually making its way deep into the retail territory. IoT deployment has been used by a variety of brands and enterprises in their retail outlets, and they are increasingly redesigned to be more interactive with their customers. Since 2017, we have seen traditional brick-and-mortar stores working with wearable, smartphone, and Bluetooth devices for marketing and promotion.
According to a survey published by ResearchAndMarkets.com, the global market for IoT is expected to reach nearly $95 billion by 2025. The potential for retail brands to delve into IoT is imminent, given the estimates of the increase in devices and industry size.1
Ways in which IoT may enhance your retail business are multifold but below-mentioned are a few of the scenarios that could aid the future-proofing at its core:
One such use case for the insights is Predictive Maintenance of store equipment, especially for HVAC and refrigeration, where uptime of equipment is critical for the retailer to ensure customer comfort and avoid food loss.
The fact that online retailers are better equipped to analyze consumer behavior with the use of easily retrievable data, gives them an advantage over their retail counterparts. Traditional brick-and-mortar retailers need to counter that with not only robust omnichannel support but an improved in-store experience.
With improving the bottom line being a top priority, retailers need to have consistent business with healthy margins. IoT offers retailers the ability to create aesthetically and experientially rich customer experience while being instrumental in reducing their operational costs and hence impacting their sustenance and profitability, positively.
The timing is thus perfect to launch IoT for multisite operations. There is a confluence of technology readiness, availability of skilled resources and vendors, and a growing need to offer an inviting yet healthy in-store environment to customers.
June
Yudhajit Tornekar Manager, Pre-Sales, EcoEnergy Insights
Yudhajit Tornekar manages pre-sales at EcoEnergy Insights. He is responsible for designing outcome-based services and packaging AI-enabled, IoT solutions for clients. He works on strategies for business expansion and supports sales and client engagement processes. Yudhajit has a passion for sustainable practices and driving efficient energy utilization in buildings.