I’m sure you’ve heard the example of the fridge telling you that you’re out of milk and ordering it for you. Thanks to IoT.
Internet of Things (IoT) – the buzzword has been around for quite some and is set to change the face of almost all business sectors including inventory management. IoT has become the catch-all phrase for machine-to machine interaction where sensors and devices communicate with each other via the internet, receive and transmit data.
On the outset it might sound very simple. But if you take the example of AI combined with machines to gather data and learn meaningful insights, it’s quite amazing.
Customer is King
“The dynamic customer preferences demand that retailers and sellers become perceptive.”
This means they have to make decisions regarding inventory, stock levels, production, and distribution swiftly. IoT and its applications in inventory management promise a multitude of benefits for retailers. Capturing real-time data will become even more easier and swifter;and hence enabling accurate demand forecasting, well-informed inventory planning and drift away from old methods that relied majorly on past data analysis.
The 2015 Global Shopping Survey states that 96% of retailer are ready to bring IoT devices into their operations in the hope that it will help them track stock levels and better analyse the heap of customer data – an area which often proves to be the Achilles heels of most businesses.
Era of Omni-channel
“Omni-channel is undoubtedly the future of retail.”
To achieve success in omni-channel, transparency and accuracy in inventory management systems are essential. In this age of omni-channel shopping, customers check out an item online and go to the nearest store to have a look. They go back online in search of the best discounts and deals. In such a situation, the actual sale of the product might occur both online or in-store. Keeping this in mind, retailers must be prepared for both, with adequate inventory to facilitate ‘smooth selling’(pun intended).
“ Walmart has developed robots for better efficiency and customer service, whereas US retailer Kroger utilises sensors in containers to keep track of goods on the move.”
Increased Visibility into Real-time Inventory
Lack of visibility into real-time inventory is problematic for both the business and the customer. If shoppers like and add an item to the cart, but find it is out of stock at checkout, they are likely to abandon their cart in annoyance. To avoid this disconnect, sellers need to show the shoppers the real-time stock count for every product. That way if a product is going out of stock, shoppers might quickly snatch it up. Also, with real-time tracking, you can also keep customers updated as to when an item is expected to be available again.
That’s where IoT comes into the picture. While barcodes were used before, IoT enabled RFID tagging and sensors will make traditional asset tracking more sophisticated. They can provide real-time monitoring of item location,eliminating time gaps between scanning stations in the warehouse. RFID tags can also also track exact location of shipments, while taking into account external factors such as weather conditions and traffic. It can combine this data to anticipate an accurate ETA.
“American Apparel uses RFID and data analytics to improve inventory management.”
Consumption Pattern and Management
Iot sensors can update companies on the consumption and need of resources such as gas, lubricants, electricity, office supplies, paper. This type of tracking reduces need for personnel, saving labour costs for the company. Data analysts can use information from sensors and use it to suggest resources and energy-saving options.
IoT also brings with it a host of other real-time functionalities. Data gathered from beacons, tags, sensors can be used to understand consumer behaviour, consumption patterns- all in real-time. With the help of real-time inventory analytics, businesses have greater inventory control, they can make better informed decisions, while taking stock of deficiencies in their inventory management model.
Predicting Customer Needs
“Amazon’s Dash Button is a device looking to revolutionize how, when and where we buy products.”
By adopting IoT, retailers are able to become experience based retailers. They combine the online and offline store experience and turn the store into a place of entertainment. Customers are able to have exceptional shopping experience thanks to the use of virtual reality in trials, augmented reality and robots as shopping assistance.
Iot provides the opportunity to connect both things and people. This gives retailers a chance to anticipate consumer behavior, which products and stores are performing and how to engage with existing and new customers.
Inside the warehouse, IoT sensors can provide vital information to retailers about customer desires and needs. For example, IoT sensors can be used to alert in-store personnel when the stock is running low on a particular product. Using consumer consumption patterns and local demographics, data analytics can help you predict the amount of stock needed at a specific store. Sales managers and warehouse experts can also see what is the peak time in a day or which weekday generates the most sales, enabling them to anticipate future inventory demands. All in all, IoT innovations afford managers a more holistic, efficient and streamlined approach to tracking inventory.
Packaging and labelling giant Avery Dennison is using IoT sensors to track upto 10 billion items.”
Iot is the Future
The capacity to view, track, monitor, and update inventory will receive a huge leap with the implementation of IoT technology in inventory management. Inefficiencies in the supply chain will be exposed faster, giving supply chain managers an opportunity to fix errors swiftly and improve on the system. Although still at a nascent stage, IoT applications in inventory management packs huge potential for both the consumer and the business.