Many e-commerce sites are pushing the limits when it comes to technology and digital adoption. As the global online market continues to climb and consumers’ shopping preferences continue to shift, it is becoming even more important for e-commerce companies to leverage digitalization and technology to provide better experiences and keep themselves ahead of their competition.
According to a Retail Vision Study from Zebra, 67% of retailers have already integrated IoT technology, and 70% of retailers plan to increase their investment and implementation by 2021. Certainly, online retailers have just as much (if not more) to gain from IoT as brick-and-mortar operations. And it has more to do than just some cool tech features “ IoT is truly revolutionizing what e-commerce companies can do and how they operate.
Here are three of the most major improvements that online businesses can expect to see with IoT adoption.
1. Supporting Effective Dropshipping
Starting a dropshipping store is a great low-investment business idea that allows e-commerce companies to operate more remotely. Many online stores operate this way to keep inventory costs low. However, many also run into the issue of poor inventory management by their dropshipper or third-party logistics provider (3PL).
IoT has the power to solve this issue for good. By using IoT technology, dropshippers and 3PL providers can track inventory in real-time and know the moment that a product leaves the shelf. Items can also be automatically ordered once inventory rates fall to a certain level to decrease the chances of out of stock items that hurt sales numbers.
IoT and Big Data can also work together to create accurate predictions for inventory management. By combining the data from customer purchase behavior and inventory history, dropshippers and 3PL providers can prepare for fluctuations in inventory needs to make their operations more cost-efficient and strategic.
Furthermore, IoT technology can ensure that products are being handled and stored correctly by alerting businesses about issues like the temperature compromising the quality of the product or even detecting damage/mishandling.
When choosing a 3PL provider, online retailers should opt for providers that utilize IoT technology for more well-organized inventory management. Speed and efficiency are a top priority when it comes to ordering fulfillment, and organizations that use IoT correctly will be able to offer faster and better service with fewer mistakes.
Image: Source
2. Truly Personalized Experiences
Personalization has long been a top priority for online marketers, yet most find it difficult to implement correctly. One of the main reasons for this is that marketers have trouble collecting quality customer data and then applying it into meaningful but actionable strategies within their website. IOT makes this possible by connecting item popularity to customer experiences and recognizing important behavioral patterns. This information can then be applied to marketing strategies by targeting customers with specific products that match up to their preferences and previous behavior.
IoT can also help with more personalized webpage layouts that optimize item placement and product recommendations. Some brands are even using data collected from IoT wearable devices to predict what products a customer may be interested in. For instance, by collecting data from fitness trackers like FitBit and Apple watch, businesses can see the fitness levels and preferences of that customer. If they’ve been doing a lot of running lately, then it would be beneficial to target them with products related to that activity, such as running shoes or headphones.
Image: Source
This level of personalization can be applied to customer service as well. IoT devices create a concrete digital footprint of each customer, so support teams have better information regarding a specific customer’s past behavior. IoT can even alert customer service teams of a potential issue before the customer reaches out, opening up the opportunity for truly personalized and meaningful interactions that consumers will appreciate.
3. New Ways to Make Purchases
IoT is certainly changing how customers make purchases in physical locations. Stores can use RFID chips in items to keep shelves fully stocked. Stores like Rebecca Minkoff and Bloomingdales even use virtual dressing rooms that allow customers to try on their designer duds without damaging them or requiring sales associates to search for specific sizes.
Image: Source
Now, the benefits of IoT-assisted shopping are certainly not limited to traditional retail locations. Many online retailers are using it to introduce multiple ways for their customers to buy items at their convenience.
Amazon has been leading the way with this kind of technology, but many other e-commerce businesses are getting in on the trends, too. Amazon Dash buttons allow customers to re-order common health, beauty, and household items with the click of a physical button – rather than checking out on the website or app. And of course, Amazon Alexa has changed the game as customers can request to add items to their cart and complete purchases just by telling this voice-activated assistant what to do.
Image: Source
While smaller e-commerce brands may not be able to launch their own IoT devices yet, this type of shopping is certainly going to change the way consumers shop in the future. Many customers are also opting for subscription-type services that automatically refill their items once they start running out. Soon, the products themselves may even be able to issue these orders through sensors that detect the moment a certain amount has been used.
Conclusion
It is certainly an exciting time for online retailers. As IoT, Big Data, and AI all become more accessible and sophisticated, online brands and their customers stand to reap the benefits.
