IoT Is Reshaping Retail And The Shopping Experience

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The sixth in a series taking a closer look at Arrayent’s Top 10 Predictions for 2017. No. 6: IoT in 2017…will negatively impact brick & mortar retailers through direct OEM-to-consumer marketing and re-ordering. This will pressure stores to effectively demonstrate new connected product shopping experiences…or die.

More than half of retailers worldwide with above-average sales growth that were surveyed in 2015 believed the Internet of Things was poised to dramatically change the way companies do business within the next three years. We are now in 2017 and their predictions are being borne out with significant movement in, and impact of, IoT on retail. But is this impact what the retailers had in mind?


IoT technologies—mobile apps, beacons, sensors, digital signage, smart shelves, and real-time data—have all advanced as aids to merchants. That’s the good news. But the emergence of various Amazon technologies and services are having the largest competitive impact, from Amazon Dash to Amazon Echo/Alexa, not to mention Amazon Fresh, Amazon Prime and Amazon IoT consultant services. Today, we also see brand manufacturers poised to play a major role in shaping the ‘customer journey’ when it comes to connected products and services. These range from reaching out directly to consumers through mobile apps, to creating compelling online and in-store product demonstrations, and working together with retailers to heighten the customer experience before and after the sale.

At one end of the spectrum, this could all positively impact the consumer’s discovery and purchase experience through personalized in-store marketing and support. At the other end, it could also potentially cut retailers out of the loop—especially brick and mortar stores—because of in-app or automatic re-ordering of consumables. However, the ascension of brand manufacturers to a position of primacy with consumers assumes that they step up to the challenge of ‘owning’ the consumer relationship and ongoing experience. This is something they have not demonstrated through decades of ‘sell it and forget it’ attitudes.

Consumers are becoming ever more comfortable with digital shopping experiences.
E-commerce is now the dominant trend in retail, and IoT provides an ongoing extension of consumer touch throughout the user experience. A 2016 retail research study conducted in the UK found consumers are primed for adopting IoT shopping solutions and technologies. In that study, 57 percent of 2,000 consumers surveyed reported they would be ready within two years to use a system that ordered items automatically. 58% said they’d also be more likely to buy smart technology if it enabled this kind of shopping. Only 35% said, however, they already had such a device in their home, or planned to buy one in the coming year.

At the top of smart shopping list items were household supplies (54%), food and drink (54%), and beauty, healthcare or personal hygiene products (35%). Half of study respondents prioritized cost as a key consideration in their choices, while only 25% prioritized brands as a priority.


From our perspective as a leading consumer IoT industry participant, the most critical element we see missing from brick and mortar shopping experiences is knowledgeable sales staff. That is followed closely by the lack of compelling connected product demonstrations that showcase consumer solutions. The lack of these two elements is poignant in light of UK survey cited above that indicated 58% of consumers would be more inclined to purchase connected devices if they would facilitate automatic reordering.

It appears to us that there is a lot of room for progressive brands and retailers to make use of IoT technologies to transform their businesses, bridging the gap between online and in-store offerings and providing an overall better user experience. Besides opening up new revenue streams and business models, embracing the corporate change mandated by IoT and its connected products may just be what saves many resellers and manufacturers from extinction. That’s why we expect to see huge transformation in retail shopping and overall user experiences in 2017.
You can read all of our predictions for 2017 here. Be sure you are subscribed to our blog, newsletter and social media feeds as we expect to chronicle many future developments for consumer IoT technologies throughout 2017.

Examples of how the retail shopping experience is changing: