The power balance has shifted in the retail sector globally. The power lies in the hands of the buyer rather than the seller now. Consumers dictate when, what, how and where they wish to shop. This is undeniably a threat to the traditional brick-and-mortar retail model. But, this shift offers tremendous opportunities to the forward-thinking sellers who understand these consequences and seek for technologies like IoT solutions. Internet of Things or IoT can not only help in reducing costs and protecting profit margins but can also help in business growth, adding services to the product profile, and enhancing their customer’s buying experiences.
“We are now about to embark upon the next step between the Internet and the web, all of the forecasts are that it will make the current Internet and its impact on our society seem trivial.”Dr. John Barret, Cork Institute of Technology
What is IoT?
Imagine an interaction between you and everyday objects through the internet. It will give us a mechanized world, where a person’s every need and desire is inherently known through Big Data. Objects from pacemakers to roadways to furniture to apparel, embedded with sensors and actuators will get the ability to communicate to people through the internet. IoT is a change in the predictable pathways the information used to travel from in the physical world. When objects get the ability to sense the environment and communicate, they will become a means for information transfer and sharing globally.
Broadband internet is now widely available and the connectivity cost is decreasing continually. More and more devices are being connected and maneuvered through Wi-Fi via inbuilt sensors built into those devices. So, in essence, IoT will enable us to connect any device, person or object, to the Internet or/and to each other. This connection will be managed through on and off switch that can enable us to control the communication through them. It will have implications, on privacy and data security. But, it also presents the biggest opportunity for the retail industry.
IoT in Apparel Retail
A recent Retail Systems Research (RSR) report stated that a majority of retail industry stakeholders agree that IoT is going to drastically change the way apparel companies do business in the coming years.
Billions of apparel products around the world will have a digital capability with IoT. This will allow sellers to make their products more interactive, informative and personalized for their customers. IoT will also enable real-time data analytics to tackle issues like product authentication, brand protection and improving supply chain transparency and efficiency.
With IoT connecting individual items via a digital thread, products and sellers will be able to communicate directly with the customers, with customized communication that is based on the customer’s needs and concerns.
There are multiple benefits that IoT can offer to retailers, which can act as a competitive differentiator for them:
- Till date, wearable technology in the fashion realm has been more or less focused on the gimmicky features. With IoT, more relevant applications to wearable technology or digital wardrobes could be made. Customers simply want to understand how their product was made, how should they look after it, i.e. how to take care of the product, and the product’s performance properties. IoT will enable retailers to communicate with their customers, about a particular product, and their customized need for that product. Imagine, you get detailed care and usage instructions for a particular pair of sneakers you own, based on the number of steps you have walked in it and the geographical conditions you have used it in.
- Apart from improving the post-sales experience for the customers, IoT also presents the retailers with opportunities to improve the customer’s buying process. In-store, IoT could enable features like personalized pricing based on the customer’s purchase history, brand loyalty, etc. online, IoT can enable retailers to collect their orders more efficiently. Individual items could be tracked along the supply chain facilitated by the Omni-channel behavior of IoT.
- Another benefit that IoT offers retailers is loss prevention and fraud identification. Around 5 to 7% of goods in world trade are counterfeit products. Brands invest a lot of time and money into counteracting this fraud. IoT will enable brands to efficiently track and identify such goods and prevent fraudulent sales under their brand name.
- Lastly, data gathered from individual products that can be situated anywhere in the world, the IoT technology will provide a crystal clear image of the stocks that can help brands to optimize their inventory and automate replenishment in a very simple and accurate way based on the actual customer needs and not just on the retailer’s orders.
With “fast fashion”, “risk reduction” and “volatility” on the minds of top industry leaders, it’s time to digitize the apparel supply chain.
Coats Digital offers solutions for fashion brands, retailers, and sourcing companies that can help them stay ahead in their game of faster speed-to-market, low costs, and vendor negotiations.
Check out our Brand Suite of solutions here:
- Brown, Eric. 13 September 2016. “Who Needs the Internet of Things?” Linux.com
- “Internet of Things: Science Fiction or Business Fact?” . 23 October 2016. Harvard Business Review.
- Andrew Meola. 19 December 2016. “What is the Internet of Things (IoT)?” Business Insider
- Jacob Morgan. 13 May 2014. A Simple Explanation Of ‘The Internet Of Things’. Forbes.com
- Michael Chui, Markus Löffler, and Roger Roberts. March 2010. The Internet of Things. McKinsey Quarterly
- Melanie Nuce. 1 April 2016. What Will IoT Look Like in the Apparel Industry?. apparelmag.com
- Deborah Weinswig. 25 April 2016. The Internet of Things (IoT) and the Apparel Industry: The intersection of retail and Tech. Fung Global Retail & Technology. fbicgroup.com
- Kevin O’Marah. 20 July 2016. How the Internet of Things (IoT) will shape the fashion industry. blogs.infor.com
- Rachel Arthur. 21 April 2016. 10 Billion Items Of Connected Clothing: The Internet Of Things Just Became A Lot More Fashionable. Forbes.com