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Implementing the Internet of Things in Retail: Challenges and Opportunities

It seems that wherever you look retailers are talking about implementing new technology to stay a few steps ahead of their competition.

Though there are a number of ways to implement technology into a retail setting, many retailers are beginning to place more attention on the Internet of Things (IoT). Why? Because it’s beginning to change the way businesses connect with their customers.

What is IoT?

Put simply, IoT is one device connecting to another device (or human) to gather data or perform a specific act. In retail, that might be using smart cameras to analyze shopper traffic and flow patterns, or beacons to push just-in-time promotions onto shoppers’ mobile devices.

IoT applications can be very advantageous for retailers. Technologies that allow a retailer to track customer behavior and collect data can and should shape future business decisions. Retailers have access to a significant amount of data on a daily basis and it’s important to be able to track the most important data as simply and efficiently as possible.

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Here are just a few examples of how IoT can help retailers:

  • Tracking of important metrics (e.g., for apparel retailers, these include door traffic and fitting room metrics)
  • Maintaining a high level of customer service and satisfaction throughout the store
  • RFID tagging
  • Keeping staff focused on your priorities

What are the Challenges and Opportunities of IoT in Retail?

What role will technology play in your retail stores? Is it worth it to make an investment in technology if it will help you better understand your customers, make your processes more efficient, capitalize on your strengths, and identify areas of weakness? If you haven’t decided, take a close look at the following challenges and opportunities retailers face with real-world IoT implementation.

What’s the Price Tag?IoT-Price-Tag


The significant investment required for a retailer to implement IoT on a wide scale may be the single biggest reason why there aren’t yet more real world examples.


You don’t have to do everything at once when it comes to implementing new technology. We suggest starting small in an area where you’ll be able to see a near term ROI. This can’t be understated: in order to get backing from the C-Suite you MUST demonstrate ROI. Be sure the application you start with will provide a return.

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You’ll Be an Early Adopter


For all the talk about how big IoT will be… soon… there aren’t yet many real-world examples of IoT in the retail space (with the exception of a number of implementations in flagship stores). That means that nearly every IoT solution provider is offering a relatively untried and unproven use case.



Even though IoT has not been used frequently in the retail space, it is definitely the direction the industry is headed. Plus, there are practical and actionable solutions available. Choose a proven solution and you’ll have the opportunity to be an early adopter without the risk of an untried application.

“Retailers that want to be innovative and stay current with the latest technologies need to embrace the IoT and embed it into their operations.” ~Bill Chamberlin @horizonwatching

There Can Be a Heavy Burden on IT


Though IoT is a convenient way to collect big data, your existing IT staff may be strained by the additional data and infrastructure, especially in the early stages when they aren’t familiar with it.


The good news is your IT staff won’t be left alone to handle the system. Proven partners can provide IT support during the transition. (For instance, Alert Tech will provide as much (or as little) support as you need during the transition phase.) Be sure to ask your solution provider what support they’ve provided internal IT teams on past projects.

Be Sure to Consider Privacy Concerns


Customers everywhere are concerned with privacy issues, as they should be. Anytime you are dealing with internet technology there will be risks associated with privacy.


Be sure to have a solid system in place to manage the data and deal with any privacy concerns. Again, work with a proven partner, and be sure to have your internal data security experts ask tough questions about what type of network security and encryption that partner relies on.


If you liked this post, you may also enjoy this infographic:
The Internet of Things As It Applies To Retailers


Even though retailers have been slow to demonstrate IoT applications, it’s just a matter of time. If you want to avoid being left behind – as well as avoid making costly mistakes – then it’s time to find a proven implementation with a proven ROI for the retail industry. If you’re an apparel retailer, contact Alert Tech to see if our solutions make sense for you.

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