A Research on The Internet of Things in Retail

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3 pages /

2394 words

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3 pages /

2394 words

Downloads: 21

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Table of contents

  1. Introduction
  2. Model of IoT in Retail
  3. Digital transformation of retail
  4. Customer Experience
    Digital Solutions
    Operational Excellence
  5. Quadrants of the Digital Business Model
  6. Suppliers
    Multichannel Businesses
    Modular Producers
    Ecosystem Drivers
  7. IoT Security Threats in Retail
  8. Conclusion
  9. References


The Internet of Things (IoT) are any kind of physical devices connected via internet to collect and transfer data without human involvement. Smartphones, laptops, smartwatches and surveillance cameras are all part of Internet of Things as long as they are connected to the internet and sharing information. IoT also includes devices such as heart monitor, smart bulbs, coffee makers, washing machines which has ability to transfer data over a network. IoT adds another level of intelligence to a piece of technology that is considered to be dumb (Ranger 2020).

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IoT is bringing a new era of opportunities for the companies by adding smart features to the physical devices. Even the basic devices like coffee maker and lamps will generate vast amount of information, which will eventually help the organization to analyze the data and provide better services (Caro and Sadr 2019). These advancements in the technology are modernizing the way of doing business. Businesses are implementing IoT services within the company to make it more efficient, cost-effective and secure. For retail industries, IoT is considered to be disruptive as we can see the implementation of IoT devices in the retail stores to give better services.

Model of IoT in Retail

Retails were already using Radio Frequency Identification (RFID) since quite some time but with improved technology, better sensors and new devices, the opportunities of improving operation and providing the extreme customer experience is increased. Radio Frequency Identification (RFID) is one of the most in-demand technologies in market at the moment (Lee 2017). RFID gives the capability to identify any microsystem and record all the information stored and produced by IoT devices. RFID Tags are microsystems attached to any item that needs to be tracked. Therefore, RFID systems are implemented by big supply chains to identify and track the tools, devices and the objects. RFID embedded devices can be tracked real time which helps in boosting the efficiency and performance (Lee 2017).

IoT can help achieve all these listed below:

  • better customer experience
  • improvement in the flow management
  • effective inventory management.

IoT system embedded in the machines while checkout can capture all the customer feedback which benefits the organisation to analyze the data and track in real time to improve overall instore experience. IoT has also helped in transforming the complete checkout experience to self-checkout that helps in increasing the productivity and is cost saving. Through the implementation of IoT, retails are able to achieve better customer satisfaction by solving customers repetitive issues (Sharma, 2020).

IoT devices simplifies the data and generate a more accurate report, rather then a person changing shifts to monitor the information. Big organizations have already implemented IoT systems to operate in a 24/7 environment by monitor the information and the data generated by consumers. These organization has also implemented IoT mobile application to study the pattern of consumers (Sharma, 2020).

Retail stores require better inventory management to solve all the tracking issue and to achieve better productivity. For achieving this kind of productivity retailer needs to keep a track of item from the time it left the warehouse till the time it is received by the consumers or another distributor. IoT devices filter all the data that is in-stock or out of stock more efficiently than other applications (Sharma, 2020).

Digital transformation of retail

Ecommerce giant such as Amazon and eBay have completely changed the game, holding the maximum market share, retail stores are decreasing day by day. In past retail store have been closed when they were not able to survive in the market but now the competition is with a company offering multiple services to consumers like entertainment, business solutions, and online shopping. However, there are still opportunities for retailers if they implement IoT technology which can transform their business (Eaton, 2020).

Customer Experience

Customer experience is counted to be the most important factor for a successful business model among all. Few stores have implemented instore robots for greeting and taking order. These robots can be programmed to do endless things (Gregory 2015). A similar robot is implemented by a bank name SoftBank. Digital implementation such as smart mirrors, robots, and self-checkouts, increases in better customer experience. Few restaurants have implemented a robot for taking the order. Those robots are programmed to take orders and bring the ordered food to the specific table. These features are very innovative and gives the business a thing to be remembered (Gregory 2015).

Digital Solutions

An advantage to retailer is the online platform through which they can target the mass audience at once. Through the implementation of IoT in the store and the mobile application, the retailer can keep a track of the pattern of their clients and provide them solutions accordingly like discounts or offers at a particular place consumer visited. By using machine learning and IoT, retailer can provide special discount offers on what the consumer wants to buy. Retailer can also provide different offers depending on instore and online shopping to boost the sales on required platform.

Operational Excellence

The retail and supply chain and to undergo many changes in order to improve operational excellence and increase customer satisfaction. It has also become harder for the business owner to a survive in the market and get a sustainable growth (Dlamini and Johnston 2016). Retailers consider many factors to achieve the growth in a business by reducing the resources and providing discounts and promotional advertisements. The study found the 40% business succeeding at the moment is by implementing technology and their mantra of succeeding is adaption the IoT technology.

Quadrants of the Digital Business Model

According to the research, digitalisation is convincing organisations to work on a two-dimensional framework. Considering the fact that opportunities for organisation generates from a two-dimension: expertise in the understanding of end users and the business model. These enterprises are built on a tool working on digital business model framework. This process is known as the creation the next-generation enterprise. These dimensions form four business models listed below.


The organisations in this quadrant have minimal knowledge on the preferences of the customers and are usually not in direct contact with them. These companies work by selling their product to large number of distributers for further selling to end users. Manufactures like Volkswagen Group, Toyota Group, Apple and Samsung are the largest suppliers by revenue in 2020. A supplier needs to make sure things like ensuring the company operations are effective and valuable.

Then, providing the best customer experience for the after sales service, to keep the customer base growing. Knowledge about customers requirement is always beneficial to keep manufacturing the goods according to customer needs and providing them solutions accordingly.

Multichannel Businesses

The organisation in this quadrant have a clearer picture on the requirements of the end users and are mostly in direct contact with them. These organisations are accessible through both the method: digital and physical. Many loan and insurance providers fall under this category. For a Multichannel business, maintaining customer experience is the key to business. Providing what the requirements of your end users is crucial to maintain the old customer base and invite new ones.

Disney is an example of multichannel business and is considered to be the most powerful brand of 2016. Disney offer multiple kind of services, such as Music on digital platform, owns an amusement park, feature movies, etc. An example of customer experience from Disney would be their amusement park’s full-fledged website. The website allows you plan the entire holiday in one go, including the stay, restaurants, rides and events. The innovative design and easy user interface give the end customers a good experience (Multi-Channel Marketing Tips From The World’S Most Powerful Brand | Right On Interactive 2020).

Modular Producers

The organisations in this category constantly innovating the products and services for the businesses. These organisations provide plug-and-play services and are capable of moulding themselves in any environment. There are completely dependent on others for distribution and for advice on requirements of end users. A payment solution provider is an example of such modular producers, they provide payment services to end users on behalf of the preferred organisation. An organisation like PayPal is a perfect example of modular producers.

PayPal provides plug-and-play services and fits in any environment. PayPal is cloud-platform based payment solution provider, which fits in any ecosystem. A research shows over 50% of the company revenue is generated from outside USA. Few organisations in this quadrant makes profit but the others battle to survive.

Ecosystem Drivers

In this type of quadrats, the organisations are the top players. These organisations have all the required qualities of being on the top of the game like having deep knowledge of the preferences of the customers and being capable of handling a big supply chain. These companies also use these qualities to provide end-users with a better customer experience.

Broadband companies of USA are a great example of such quadrants (Sviokla, 2020). To keep being successful for a player in this quadrant the organisation needs to keep pushing the company limits in both the proportions. The organisations need to take care of their consumer-base and give them complimentary product when competition in the market.

IoT Security Threats in Retail

The growth of internet connected devices such as cameras, sensors, smart machines is increasing day by day. According to the study, International Data Corporation, almost 41 billion internet connected devices will be available by 2025. It is important to keep cybersecurity in mind while making the product, especially when the product is connected to the internet and used by mass audience. manufactures should consider cybersecurity as a very important in order to achieve safety of users. Manufactures should also conduct multiple security test in the designing phase to see the vulnerabilities of the product before hand and correcting those before giving it to consumers (The IoT Security, 2020).

IoT technology is widely used in almost all the product we use today to give us better experience. These devices are cheap and easily available, which makes them more vulnerable. Such devices are connected to the home Wi-Fi and can lead to a bigger security attack on all devices connected to that Wi-Fi. These devices are not created keeping security in mind and are vulnerable and are mainly used for privilege escalation. In privilege escalation a small target is used to reach somewhere inside of the system to beach information and data (The IoT Security, 2020).

IoT technology is used in different products, from small pin cameras to huge industry machines. These devices have multiple internet connectivity options like USB, Wi-Fi and cellular, etc. These devices are created to work on a application software, called as operating system. Manufactures and consumers both should understand the importance of updates of the application software to fix the patches and vulnerabilities. These updates are important to keep the device up-to-date and secure from attacks. To overcome the breaches and attacks, manufactures need to consider cybersecurity an important factor while planning and designing any product.

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Technology like IoT is so powerful that the retailers and the manufactures are happily implementing the technology into their businesses model. The number of companies adapting Internet of Things (IoT) are increasing on daily basis. Considering the fact that these technologies will result in the making it more convenient for the consumers and as well as for the employees. We can’t deny the fact that these technologies will always have some bugs and improvement and maybe vulnerable but if we think that way then the first thing, we should avoid is our phone. The benefit and ease of doing the business these technologies provide are incomparable.


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Smart cities and IoT: Development of present and Future Dreams. (2022, December 10). GradesFixer. Retrieved October 1, 2023, from
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