How IoT is Transforming Your Retail Business

If you run a retail business, you have a digital opportunity to meet elevated customer expectations and gain operational efficiencies using Internet of Things (IoT) technologies.

As per Vodafone‘s IoT Barometer 2019 report, 74% of retailers are either exploring or currently implementing IoT projects. So why should you evaluate an IoT retail strategy right now?

Personalized Shopping Driving IoT Adoption

A key motivation for retailers investing in IoT is to collect better customer data primarily through location services and on-site behaviour analytics.

When you give shoppers more customized recommendations and tailored promotions based on their in-store browsing, size or brand preferences – you can lift sales conversion rates over generic offers.

  • According to Salesforce Research, 61% of consumers want offers tailored to their past purchases rather than generic promotions from retailers.

  • IoT allows retailers to segment customers into over a million clusters to define micro-targeting strategies – says a McKinsey report on personalization.

Enabled by Advances in In-Store Tracking

Advanced shopper tracking analytics is possible thanks to growing deployment of the following technologies:

  • IoT sensors like overhead Bluetooth Smart (beacon) networks covering the entire store area
  • WiFi access points with software to sense devices
  • Stereoscopic video cameras with image processing
  • RFID tagged merchandise and smart fitting rooms

As you capture millions of events via these systems and apply AI models, precise shopper journeys can be recreated digitally to analyze behaviour plus identify lead indicators like:

  • Dwell time by a category indicating interest
  • Frequently picked but unbought items
  • Movement heatmaps to optimize store layout

Emerging 5G networks, WiFi6 and edge computing will make such location-aware use cases even more precise and responsive.

Have you considered IoT to personalize promotions during a shopper‘s journey? Over 50 retailers saw 2X+ ROI within a year of beacon programs says a study by Forrester.

Case Study: Customized Offers

UK retailer John Lewis leverages Google‘s Eddystone beacon format and dedicated apps to push context aware offers. Based on their physical location in-store, shoppers receive relevant digital vouchers like discounted delivery for large appliances when passing by that department.

During their 2019 trial across 5 stores, they witnessed an impressive 30 to 40% increase in click and collect orders for departments sending beacon triggered offers.


IoT allows for sophisticated shopper engagement opportunities through devices like smart mirrors, digital displays and augmented reality experiences in changing rooms.

Consulting analyst firm Gartner forecasts that by 2025, over 50% of retailer technology investments will focus on customer experience innovations like IoT analytics rather than traditional supply chain capabilities.

The question you need to answer as a retail leader is when and how to formulate an IoT retail strategy to stay ahead in a more competitive omni-channel environment.