Three Ways IoT Technology Is Influencing eCommerce

IoT Influence

The perspectives of the Internet of things seem to be incredible due to not only the possibilities of every connected device but also the rising proliferation of IoT into every sphere of life. According to Statista, by 2030, the number of IoT devices will have exceeded 25.4 billion, while in 2020, there were 8.74 billion IoT devices worldwide. In other words, the quantity will triple!

About 60% of such devices belong to consumers and the rest are used in various industries. On average, an American household already has five connected devices: for instance, a smartphone, smart speaker, TV, car, and smart home system.

British technologist Kevin Ashton coined the term Internet of Things in 1999. At that time, the network of objects that exchanged data via the internet and even performed some actions autonomously was perceived as the concept from sci-fi movies rather than something viable.

Today, IoT can hugely contribute to the further development of many sectors: energetics, water supply, transportation, storage, wholesale, and retail. When it comes to online retail, there are a few ways how IoT can assist: data collecting, streamlining business processes, and providing predictive support. Let’s observe all these aspects in detail.

1. More Data = Better Personalization

Every modern eCommerce player caters to provide its customers with the best personal shopping experience. Connected devices have a huge potential for sharing wholesome insights about consumers’ behavior and preferences with online merchants.

Devices in active use generate enormous amounts of valuable data that can be collected and analyzed to deeply understand what a particular person needs and is looking for now. Moreover, with the help of IoT, companies can determine some trends and changes in demand more precisely.

This approach allows online retailers to act as targeted as never before. Showing relevant offerings based on browsing history and other specific data from devices, brands can ensure not only higher revenue for themselves but also the substantial increase of customer engagement, satisfaction, and eventually greater loyalty.

IoT technology is constantly evolving. More and more objects are being equipped with sensors and software that help to deeply explore customers’ tastes and needs. Home appliances are becoming smarter, different devices can be connected with smart home systems, people are getting used to communicating with virtual assistants every day. All these tendencies together ease the matter of personalization for companies.

Data Security

Certainly, IoT devices improve peoples’ lives which is a significant factor in favor of permitting them to collect data. However, security and privacy-related risks are still a serious obstacle to using all the capabilities of IoT.

IoT devices and services connected with them (e.g., databases) are often attacked by cybercriminals. Data breaches and phishing attacks are common threats for IoT. While companies have to elaborate technical protection for their systems, governments must think about the legal aspect of IoT functioning

2. Better Optimization = Less Expenditures

IoT can considerably optimize and automate numerous processes in every retail business, which always implies constant tracking of supply chains and moving cargo. Let’s review several ways of facilitating the workflow.

Inventory Management

Sensors and RFID tags (RFID is for radio-frequency identification) allow monitoring inventory in real-time, eliminating the human factor. For instance, smart shelves aid to track the stock. When the quantity of sold products reaches a particular level, the system can place a new order automatically. The same can work backward: the system won’t allow over-stock.

Warehouse Management

There are several areas where IoT can be extremely useful. For example, sensors for temperature monitoring can control the climate in storage and send notifications if something goes wrong. This efficiently prevents products from spoilage.

Another vivid instance of the successful implementation of IoT is Amazon’s warehouse robots. The giant has more than 100,000 drive units and other robots that transport heavy pallets, pick up, and sort items to prepare them for delivery or storage.

Orders’ Tracking

RFID and GPS help in tracking orders from the warehouse to the final destination in someone’s house. Employees and clients can see the whereabouts of the parcel and the approximate time of delivery as well. This solution reduces the frequency of customer inquiries regarding their orders

3. Helpful Predictions = More Sells

The proactive behavior of connected devices is one of the most fascinating concepts for eCommerce brands that focus on electronics. Besides collecting and exchanging information, IoT-powered products have the potential to initiate specific suggestions and even actions.

For instance, if your printer detects that a cartridge is almost out, it sends an alert to your smartphone. The message includes not only the warning but also the link to the website of the manufacturer where you can buy a new cartridge.

In the future, there will be an option to place such orders automatically. Therefore, all equipment at home or in the office will be thoroughly maintained and fixed in time. When devices predict that some components run out or prompt upcoming issues, consumers won’t be let down by a coffee machine or hair dryer that suddenly breaks down. It goes without saying that the customer experience will then hugely surpass the level that we have today

To Conclude

Some world-renowned brands like Amazon, Apple, and Google have already been leveraging IoT possibilities to ameliorate customer experience and maximize their own profits. Technology has tremendous perspectives and will inevitably become an integral part of our life. People will enjoy extremely convenient smart homes and smart cities.

Regardless of some security threats, smart devices that ease shopping and anticipate their own problems will be sought-after by consumers. In turn, businesses will gain largely automated processes, better logistics, reduced costs, and higher quality of customer service.
PC: Unplash

About Author:

Alex Husar, Chief Technology Officer at Onilab with 8+ years of experience in developing PWAs, Magento 2 migration, and Salesforce development. He graduated from the Czech Technical University and obtained a bachelor’s degree in Computer Software Engineering. Alex’s expertise includes both full-stack dev skills and a strong ability to provide project-critical guidance to the whole team.

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