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The future of physical retail: Connected devices and connected shoppers

U.S. consumers are expected to spend more than $1 trillion this holiday season, according to eMarketer. Ahead of the Q4 surge, brick-and-mortar retailers are experimenting with IoT technology, from smart mirrors and tablets in fitting rooms to VR headsets and beacons on the retail floor, to transform the shopping experience and drive more offline sales.

These cutting-edge IoT technologies are defining the stores of the future. But what’s often overlooked is that these novel, customer-facing innovations all depend on foundational backend systems.

Putting the smart in smart fitting rooms

Smart and connected fitting rooms are on the rise in major retailers across the country. For example, Ralph Lauren outfitted its flagship store in New York with smart-mirror fitting rooms so shoppers can request different sizes and colors, view product information and even adjust the room lighting all through the connected mirror.

AR and VR technologies also introduce new possibilities for consumers to interact with products and companies in personalized and exciting ways. Timberland deployed AR mirrors in their storefronts to attract and engage foot traffic. Their smart mirror enables those passing by to virtually “try on” various outfits and even share their experience on social media.

These examples illustrate the rise of experiential retail, and both smart fitting rooms and AR devices depend on a fast, reliable internet connection in order to function properly. The storefront magic mirror loses much of its appeal if it requires shoppers to wait several minutes for the images to load.

Highly available, flexible and scalable Wi-Fi connectivity is imperative for supporting these bandwidth intensive IoT, VR and AR applications. Retailers can use automated Wi-Fi radio frequency management to proactively identify and mitigate issues before they occur, which ensures a high quality of service for shoppers. As a result, consumers will experience minimal latency and reliable connectivity when using the experiential technology.

Making payments mobile and secure

Consumers expect the in-store checkout experience to be as seamless and efficient as shopping online. Recognizing this, many retailers are deploying IoT payment devices such as tablets, smartphones and smart carts to expedite the checkout process for consumers. In turn, this can also help retailers streamline their in-store operations and resources.

Automated checkout can reduce cashier staff requirements by up to 75%, resulting in savings of $150 billion to $380 billion per year in 2025, according to McKinsey. One critical concern that could jeopardize the successful execution of a mobile payment strategy is security. Ninety percent of consumers lack confidence in IoT device security, including point-of-sale (POS) devices, according to Gemalto. Verizon’s 2019 Data Breach Investigations Report found that while breaches involving POS have declined in recent years, attacks against ecommerce payment applications are on the rise, accounting for 81% of breaches.

As the use of mobile-based payments and connected devices grows, so too does the attack surface. IT managers must ensure their in-store network includes a mix of threat detection, protection, and surveillance to prevent the exposure of confidential consumer and business data.

Furthermore, most retail IT teams are small with limited resources, and they are responsible for managing multiple retail locations across different regions. A network equipped with machine learning and proactive AI functionality to identify anomalies and potential threats can help augment human intelligence and reduce the time spent manually monitoring for security vulnerabilities.

Connecting to the connected customer

There’s a lot of hype around net new IoT devices that retailers are deploying in their stores. But it’s not just businesses that are more connected; it’s customers, too. Buyers today increasingly shop with mobile phones, tablets, smart watches and other wearables, putting real-time data on discounts and competitive pricing at their fingertips.

According to Salesforce research, 71% of shoppers say they use their mobile devices in stores and eMarketer reports that 69% percent of consumers look for reviews in-store on their phone before approaching a retail associate. That leaves retailers a narrow window of opportunity to meaningfully engage shoppers who otherwise may opt to purchase from a competitor.

The good news is this proliferation of devices on the network also creates a proliferation of valuable consumer data, which retailers can leverage to deliver more personalized offerings and customer experiences. For example, Macy’s uses beacon technology so that when a customer opens the Macy’s application while shopping, the application sends targeted promotions and contextual information based on where the customer is in retail locations. In many ways, this allows retailers to meet customers where they’re at, and curate more touchpoints throughout the physical and digital shopping experience to achieve unified retail commerce.

It’s important to remember that the network edge is now a cornerstone of brick and mortar retail stores. It’s the point where an organization and its customers meet; it’s where users engage, mobile transactions occur, and IoT devices connect and are managed. Retailers can apply analytics to the data coming over in-store wireless networks to understand customers’ preferences and make offers to them that are highly contextual and catered to their specific needs. Analytics can also be used to inform location-based services, RFID, and electronic shelf labeling to reduce friction in a shopping journey and create impactful experiences.

Modernizing brick and mortar by connecting the dots

As we head into the busiest shopping season of the year, it is an opportune time for retailers to evaluate how their in-store technology elevates or hinders the end-to-end customer journey. Whether it’s high-tech experiential IoT devices, mobile POS systems, or your customer’s smartphone, remember that the network is critical to a seamless in-store experience.

All IoT Agenda network contributors are responsible for the content and accuracy of their posts. Opinions are of the writers and do not necessarily convey the thoughts of IoT Agenda.

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