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As the Internet of Things continues to develop, new uses are born every day. The best IOT ideas may still be to come, but even today companies are finding creative ways to drive revenue up and costs down. From merchandise management to on-shelf availability, technology is changing retail and this digital transformation impacts every segment of retail. IoT makes customer-centric merchandising a possibility in all channels. One use case in particular, Heat mapping, is  gaining traction. Retailers can use transparent and real-time customer behavior in the stores to optimize interactions and improve brand experience.

Heat Maps

Retailers can use Bluetooth, wifi or video analytics technology to track customers in the stores in real time. Knowing how a customer travels through a store and interacts with products is priceless. Retailers such as Ikea and Whole Foods have been trying to perfect this for years. In the past, this analysis has been done by experimentation and human observation. Now the Internet of Things is making those efforts easier. Information that was previously only available on the web channel is now available in physical stores.  Heat maps can help improve physical merchandising and store layouts and real time analysis of these maps can help managers in large format stores dynamically allocate associates to serve customers wherever they are in the store.

Wayfinding (GPS)

Navigating large department stores such as Macy’s or Walmart is getting much easier with in-store navigation via GPS. Through mobile apps, retailers can help the customer find what they need. Macy’s, for example, offers turn-by-turn navigation to products via its iPhone app. Indoor mapping removes headaches and helps large retailers better serve their customers and reduce lost sales. The opportunity exists to provide personalized shopping experiences as part of the wayfinding solution further increasing basket sizes.

Enhanced basket analysis

Shopping basket analysis helps retailers identify opportunities, identifying product affinities as well as cannibalizations. For example, if a retailer notices that a high percentage of customers who purchase a floor mat are also purchasing air freshener, they can better position the stock in the store or online to match these habits. By using shopping cart analytics to find the probability of two or more products purchased together, retailers can increase basket size.


Businesses, especially retail, need to work harder earn customer attention. Building and reinforcing brand is instrumental in this. Millenials in particular are looking for retail as an experience - as opposed to just a transaction. Gamification using the Internet of Things is fuelling long-term loyalty by revolutionizing the in-store experience. When more people participate because it’s fun and exciting, sales and profits rise.

Internet of Me

As the Internet of Things continues to permeate our homes and our lives, retailers can get much better insight to our needs and desires. Our scale knows when we’re on a diet; our refrigerator knows when we’re low on eggs and our car knows when it needs an oil change or the tire pressure is low. This hyperconnectivity gives retailers the ability to make our lives simpler by offering suggested replenishment orders and  target us with relevant promotions. With data sharing becoming more and more commonplace, Jiffy Lube can remind car owners who need an oil change within the next few weeks. Whole Foods can remind shoppers that they’re low on eggs through text or email while they shop.

They way retailers advertise on connected devices is evolving. More and more brands are fighting for our attention and our loyalty. Retailers realize they need to be more targeted in their efforts both online and offline; The days of pay-per-click advertising are coming to an end, replaced by more creative services. The Internet of Things continues to reinvent the retail industry by transforming the customer experience any where, any time.

To learn more about Digital Transformation for Retail, view Retail. Reimagined for the new economy.