The pressing problem facing retail enterprises today is finding ways to bridge the physical with the digital. How can retailers create a synchronized omnichannel platform, reduce fraud and tighten security, and facilitate bidirectional, realtime interaction with customers? The IoT (Internet of Things) can help retail enterprises accomplish all of this and more, but many retailers still view the IoT as hype.
Late last year, RSR (Retail Systems Research), www.rsrresearch.com, released findings from its 2016 benchmark report, which found that while retailers are optimistic about what IoT technologies can do for their businesses, they haven’t started seriously investing in these technologies yet. Brian Kilcourse, coauthor of the RSR report, points to the fact that retailers have struggled—and continue to struggle—to integrate physical products and physical stores to today’s 24/7, anytime/anywhere selling environment. A brand new study suggests evolving customer expectations are going to continue to heighten this urgency.
According to the latest from Radial, www.radial.com, and CFI Group, http://cfigroup.com, customer expectations from retailers are becoming more demanding in an increasingly connected world. In one key point, the survey suggests retail customers want cross-channel flexibility when it comes to buying and returning; an overwhelming 90% of respondents said they want to be able to return products purchased online to a physical store. To make this a seamless reality, retailers need to invest in a synchronized omnichannel platform, perhaps consisting of multiple IoT-enabled solutions working together.
The Radial study also provides some insight into how retail customers feel about purchases that are incorrectly identified by retailers as fraud. Consumer data security has long been a talking point for the retail industry, but the systems retailers adopt must be able to not only detect fraud but also distinguish between real and fraudulent purchases every time. While some retailers may write off the latter point as a non-priority (because it’s better to be safe than sorry), Radial’s research suggests that of the customers who have had legitimate online orders mistakenly identified as fraud, 40% would be hesitant to shop with the same retailer again and an additional 27% would never shop with that retailer again.
At the same time, catching real fraud has to be retailers’ top security priority; after all, no retailer wants to be the next industry horror story. Radial suggests merchants lose $77 million to fraud every single day, and, shockingly, every $1 of fraud actually costs retailers $2.40. With this in mind, it is no wonder many retailers are turning to IoT security solutions that leverage machine learning and big data to improve ecommerce security and protect customer data.
When it comes to engaging with connected customers, the IoT can once again help retailers meet customers’ evolving expectations. If a retailer provides incentives such as personalized promotions and access to detailed product information and customer reviews online, it seems consumers will be more willing to share their information. In fact, 84% of respondents said they will sign up for loyalty programs if retailers “make it worth their while.”
The IoT can unlock many cost-saving, timesaving, and customer-engaging solutions for retailers. It’s up to the retail industry to discover what use cases make the most sense for each company’s unique business. Otherwise, retailers risk being left behind.