The enhancement of existing warehouse management systems (WMS), with the implementation of components of IoT, has the potential to strengthen a retailer’s overall operational efficiency. Warehouse executives are on board, with 52% planning to increase their technology investments in the near future, specifically leading with IoT, blockchain, artificial intelligence (AI) and automation. The economic impact of IoT in retail environments as estimated by McKinsey will range from $410 billion to $1.2 trillion per year by 2025.
IoT advancements use real-time management tools and AI automation to track and transmit data throughout the product manufacturing and delivery cycle. When these technologies connect wirelessly across multiple locations and devices, IoT provides greater transparency into the retail supply chain. By 2020, there will be more than 30 billion physical devices — from wearables to drones to the next wave of smartphones and appliances capable of internet connectivity. With more than 70% of retailers actively digitizing their supply chain, the benefits of achieving real-time visibility into distribution channels will be invaluable as direct to the consumer becomes more prevalent.
IoT Connectivity and Retail Inventory Management
The added value of leveraging IoT connectivity is almost compulsory for retail inventory management. With IoT, cloud-based servers store and process data from all locations — flagship retail, e-commerce, store within a store and the occasional pop-up, in a retailer’s portfolio. The transmission of data between all these physical devices allows retailers to monitor the entirety of their inventory for each product line and consumer demographic segment without waiting for the manual collection of data.
Consumers accustomed to free shipping buy products online to pick up in-store (to avoid the shipping cost). Retailers with a clear understanding of their inventory can expedite shipping fulfillment to their own stores: a win-win. It’s also a smart play given Amazon’s recent news to reduce delivery for Prime members from two days to one day. The e-commerce giant plans to test out the feasibility of the program during this week’s Prime Day deals, and its’ success will surely reinvigorate how retailers’ manage final-mile delivery to consumers.
Retailers who own the end-to-end journey of their product are also creating stronger customer loyalty versus a third-party delivery group ‘dropping off a package’.
Blockchain and Food Transparency
Blockchain offers full transparency into the sourcing, production and fulfillment of goods. The technology works in concert with IoT as a digital ledger recording data with a timestamp to track the life cycle of a product. The supply chain for organic foods and beverages uses blockchain technologies to track the origins of its meat and produce.
Connecting Food, a food-tech startup based in Paris, partnered with IBM to provide its clients with a food transparency blockchain solution. Creating a map of the supply chain, farm co-ops (brands and retailers, too) can enter data into the ledger at every stage to ensure the products match compliance guidelines. Farmers and growers are incentivized to enter the data to showcase the quality of their products, and consumers access the full traceability of the product from the farms to the warehouses to the grocer via the Live Scan app.
Starbucks has partnered with Microsoft to vet the ethical sourcing of their coffee beans using their Azure product, and both Target and Walmart are implementing blockchains to monitor food products and pharmaceutical goods.
There is also speculation of how CRE can leverage blockchain tech to diversify client portfolios. The need for transparency and a simple process is much more critical today. Manually inputting and consistently ‘cleansing’ data is time consuming plus creates an additional risk factor. Eliminating these issues through blockchain could be the solution.
Anjee continues to be an insatiable enthusiast of all things retail. She’s a student of culture with a pulse on future shoppers and the fleeting trends constantly changing the retail landscape … driving retailers, landlords and developers crazy!