IoT (Internet of Things) technology has been touted as transformative for many industries, perhaps most notably the retail sector, with huge numbers suggested for growth or savings. For example, in 2015, US consulting firm McKinsey predicted that the potential global economic impact of the Internet of Things in retail environments would would range from 410 billion to 1.2 trillion dollars a year by 2025.

How could the IoT have such an impact? How should retailers use it?

One definition of the Internet of Things is to integrate "inert" objects into a digitally connected world. This is done by adding chips or tags to "things", which can be read by sensors, meaning that previously invisible objects can be seen, monitored and analyzed. Bringing the physical and digital worlds together is an exciting prospect for an industry like retail, where the Internet has often severely wounded "bricks-and-mortar" businesses.

There are many opportunities for innovation with IoT in retail, merging aspects of online and physical shopping for businesses and consumers. We'll look at some of the best implementations: real-time personalized promotions, Lift and Learn digital signage and automated checkout.  

Personalized in-store promotions

We've said that the IoT unites the digital and physical worlds; responsive digital signage in retail is a prime example. It's now possible to use customer data captured from people's online behavior to personalize offers that can be displayed in-store via digital signage.

For example, you really like a clothing boutique, so you download their app to make quick purchases and receive offers and news. You enter their store; they have sensor technology that recognizes you and triggers a welcome message that appears on a digital signage screen. The app's data includes what you were last browsing, so the in-store signage directs you to the item, while at the same time sending a discount code to your phone.   

This type of IoT interaction requires a marketing proximity solution. Beaconstac's blog provides a good summary of the differences between the main marketing proximity technologies: RFID, QR codes, tags and NFC. Using retail signage software, you can set the tag or code reader or beacon to trigger content on certain displays. Your choice of display will depend on when you want to reach your customer, perhaps as they enter, or perhaps as they wait in line for payment, or just before they pay on an electronic point-of-sale (EPOS) screen.

Lift and Learn signage solutions

Another way to use the IoT to make your retail digital signage solutions more personal and engaging is a Lift and Learn solution. This is where a product is tagged, so that when it's picked up, the tag recognizes the customer's interest. This then triggers content to be displayed on a screen.

For example, you could use it to show images of different product options, a video on how the product was made or how it could be used.

Or similarly, you could have a reader and display station in the store, and customers can pick up any labeled product and bring it to the reader to see more information on the screen. This would be useful in stores with technical products or products that might require tracking, for example, in hardware stores or pharmacies.

You can analyze which products are most often taken by customers for information, and consider what additional signs or promotions you could introduce to boost sales. 

Automated checkout

So far, we've looked at IoT implementations that trigger digital signage. Another key action for IoT tags is to trigger payment. By including a tag in every product in a store, checkout can become automated. When a customer passes a sensor, the sensor can determine which products the customer has and, if they are registered to participate, it can automatically debit the phone, card or account they have registered.

Perhaps the most famous test of automated checkouts is Amazon Go, and other retailers are expected to test the technology soon as we become increasingly accustomed to paying by smartphone.

According to WorldPay, 16% of global point-of-sale payments were made via an e-wallet, and this is set to rise to 28% by 2022.

The benefits are obvious: a quick and easy transaction (and for now, at least, a novelty) for the customer, reduced staff costs for the store, less space needed for checkouts and POS, and a huge amount of intelligence on customer buying behavior.