Internet of Things (IoT) in Retail

IoT Retail - ScienceSoft

Internet of Things is on the rise today. According to Gartner, by 2020, more than 20 billion connected devices will be in use both by businesses and consumers. The proliferating number of connected gadgets will inevitably lead to the emergence of the so-called connected ecosystem as a new paradigm of the manufacturer-seller-consumer existence, offering totally new opportunities and challenges to all parties involved.


Retail is among the first industries that appeared on the IoT frontier, feeling both its pressure and reward. Since long ago, retailers have partially relied on connected technologies and related software solutions in their daily operation. In the coming years, according to the Accenture estimation, retailers seeking to capitalize on IoT will spend around $2.5 billion on hardware and its installation.

The increasing reliance on connectivity will inevitably make retailers change habitual behavior patterns and adapt business models. One thing is for sure: the newly created ecosystem will become totally consumer-centered and driven by the following trends.


Nowadays automation is yet far from what Internet of Things may enable. In the long run, most functions now performed manually will be carried out by smart tech. Here are some highly possible scenarios:

  • Robots replacing sales assistants to some extent (customers will use them to browse the available stock, learn more about a particular item, etc.).
  • Smart price tags adjusting prices in real time, based on the item’s popularity, expiry date, etc.
  • Smart package tracking the perishable goods’ freshness, etc.
  • Customers using their gadgets to navigate in the store, make digital shopping lists, etc.

Agile workforce

Due to workplace digitalization, retail employees will become more mobile and customer-focused. Connectivity will also impact on the way the work is done, encouraging the development of new cooperation forms, such as crowdsourcing, short-term partnerships, etc.Workforce education will achieve a new development milestone. Online learning has become an everyday reality, but in the long run, especially with the advancement of BYOD technology, university courses, boot camps and webinars will become accessible for anyone, anytime, from any device.

Connectivity platforms

In terms of the retail industry, connectivity platforms may take multiple forms: from giant e-tailers (such as Amazon and Alibaba) to online payment systems to hubs for device communication. As the e-commerce segment occupies a significant market share, connectivity platforms will emerge as one of the main drivers of digital economy. Apparently, Internet of Things comes as one of the major disruptors of a number of industries, including fleet management, automotive, healthcare, etc. As for the retail industry, changes will mostly occur in the following three facets: customer experience, supply chain and revenue streams.



The ever-increasing mass of connected devices, both at a store and at home, will form the so-called “Internet of Me” environment giving businesses valuable insights into an individual customer’s preferences, habits and behavior patterns. Below are some ideas of how the store of the future may look like:

Personalized approach

Beacons installed at the store entry inform sales assistants when a customer with loyalty card enters a store. As the customer moves through the store, they receive individual promo codes or discount notifications based on their previous purchases.

Smart navigation

Digital shopping lists are made automatically based on the customer’s diet preferences, fitness device data and fridge stock. Smart shopping carts analyze the lists and help customers navigate through the store to find the necessary products.

Unrestricted access to product information

Customers use smartphones to scan the products’ bar codes for additional information, user reviews, etc.

Smart stock replenishment

A smart fridge installed at the customer’s home analyzes the available stock and automatically schedules delivery to the predetermined time.


We may safely state the traditional supply chain mostly based on the manufacturer-retailer-ultimate user connection will soon cease its existence. Retailers will have to fully reconsider the ways the work is organized within brick-and-mortar stores.

Reduced human participation

Most jobs implying repeated activities, from arranging items within a store to handling hazardous materials, will be taken over by robots. However, this does not mean human participation will no more be required in the retail business. Conflict management, PR, marketing and other jobs that welcome creativity and advanced communicative skills will remain the people’s prerogative.

Enhanced inventory process

Again, the usage of connected devices to manage inventory activities will eliminate the reliance on humans in terms of stock replenishment and tracking of products’ state:

  • Smart shelves will keep track of the available stock and schedule replenishments occurring just in time.
  • Smart and flexible price system will allow adjusting prices in real time, maximizing sales and significantly reducing wastage.
  • RFID chips will help keep track of the merchandise movements, decreasing the possibility of loss or theft.



Connectivity may not only enhance the operation of a traditional retail store; it may as well create new ways of making profit from the retail business in the age of digital economy.

Upon some experts’ estimation, the proliferating tech startups will mostly embark on developing hubs and platforms for devices to communicate with each other.

Operating a number of connected devices both at home and outside, consumers would hardly find it reasonable to install a separate app to manage each device. Apparently, the successful implementation of connectivity platforms is determined by the willingness of all stakeholders to cooperate, and share knowledge and experience.


ScienceSoft is a team of recognized experts in designing corporate retail solutions that help meet the needs of the most demanding consumers and turn window-shoppers into loyal customers. Below are some self-speaking examples.

Parking guidance and marketing solution for shopping malls

The solution represents an intuitive and easy-to-use mobile application meant to enhance purchasing experience at each stage, from the moment a customer leaves the car at a parking lot till the purchase is made. It consists of two components:

  • A parking guidance solution uses a network of beacons to help customers find a free parking lot and navigate through the shopping mall.
  • A sales-boosting solution collects information about the customers and uses it to target marketing campaigns, push notifications and promo codes. Customers themselves may adjust notification settings by making a list of stores they would like to receive messages from.

The solution is based on the deep analysis of an individual consumer’s preferences and behavior patterns. The generated statistics allow sales offers and marketing campaigns reach target audience without bothering others with unnecessary information. A special feature is an AI-enhanced 3D compass that displays advertisement hints and special offers when a customer points a smartphone camera at a particular store.

Computer vision retail solution

The solution is based on the interconnected operation of cameras and tracking modules providing a big set of data that help analyze consumer behavior and effectively plan merchandizing activities:

  • Cameras track the employees’ activities and the way they communicate with customers. Recordings are also used to analyze the customers’ movements and queues throughout the day, and adjust the cashiers’ work schedule.
  • Hand movement tracking modules help identify the most popular shelf sections, fridge shelves and products, and arrange merchandizing activities so that to make the most of them.



As it always happens with new technologies, they offer not only benefits, but challenges as well. Below are some pitfalls retailers may stumble upon while introducing IoT into their business models.

API sharing
As we mentioned before, cooperation is a clue to unlocking the full potential of the connected ecosystem. The problem here is that connectivity platforms may require manufacturers of connected devices to share their product’s APIs to enable seamless connection. Apparently, not so many companies would be willing to do so as it may require changing their business models.

Supply chain disruption

It may sound slightly unrealistic, but IoT poses a real threat for retailers to be pushed out of the supply chain. In the foreseeable future, connected devices at home will be able to communicate directly with the ones at manufacturing plants; for instance, smart refrigerators will be able to order milk right from the dairy factory. In this regard, retailers will have to come up with new ways of bringing value to customers.

Cybersecurity and digital ethics

Any data collected from users, including their interests and preferences, should be treated with respect. Knowing they are constantly under the silent surveillance of cameras and beacons, customers may feel slightly uncomfortable. So, while enjoying almost unlimited access to the consumer data, remember to:

  • Always explain customers what data you collect and what it will be used for; ideally, compile a code of conduct and make it available online.
  • Instruct customers on how to opt out of being “scanned” at a store, or at least ask for some kind of consumer consent (for example, by sending a notification to a customer’s smartphone right at the store entry).