IoT and what it means to retail

While many retailers in the consumer electronics or technology categories are focused on increasingly high-definition TVs, sound bars, headphones and wearables, the burgeoning Internet of Things (IoT) promises to connect these devices in a way that very well could change how we live. And it stands to give retailers a boost, too.

The IoT is being heralded as the coming revolution, the next big thing in digital technology.

It's basically the sum total of all devices that can communicate with each other via the internet. Cloud computing has made many things possible, including the ability to connect our front door lock and lights to our smartphone or car, or a TV to a server that streams movies.

The number of potentially connected devices is roughly 14.4 billion and could balloon to more than 50 billion by 2020, according to trade group CompTIA.

"The 'Internet of Things' is the hottest topic in tech right now," said Karen Chupka, senior VP, International CES and corporate business strategy, CEA. "It's all about the opportunity to connect everyday items like cars, home security systems and kitchen appliances to networked devices like PCs and smartphones for greater control and management of our everyday lives."

CES 2015 features a host of sensors, mobile devices and smart home products and technologies, in addition to conference sessions and panel discussions about the burgeoning category's future and potential privacy and security issues.

While many of the true benefits of IoT will be found in the health and medical fields, heavy industry and manufacturing as embedded technology aids in diagnosing and correcting both humans and machines, there are many consumer applications, as well.

Smart appliances that can be operated remotely to manage energy, lighting systems and door locks will provide both convenience and added safety, and wearables will elevate the average consumer's access to personal health and fitness information.

Consumer interest in connected devices is growing. According to a report by Experian Marketing Services, nearly a third of all U.S. consumers use at least one type of connected device and 14 percent of U.S. households contain some smart home elements such as connected lights, locks, thermostats or electrical outlets.

For retailers, the IoT presents some powerful opportunities. As products become more interconnected and confusing, consumers will be looking for answers. Retailers that are well positioned in the technology or consumer electronics space should be ready with answers.

While RadioShack has been waiting for this moment for nearly two decades, Apple, Best Buy and Amazon are already establishing themselves as solid resources for shoppers with strong service businesses such as the Geek Squad and Genius Bar.

Amazon Prime could well add home services as part of its program and the online retailer's rapidly expanding delivery program could be leveraged to not just deliver, but connect, new devices to shoppers' homes, in some cases within the hour.

Retailers in the health and wellness categories are viewing IoT through rose-colored glasses. Already, Walgreens is utilizing mobile devices to offer virtual doctor's visits. Future prescription bottles could contain embedded sensors that signal and order a refill while stronger connections to in-store clinics will help cement shopper loyalty and grow front of store sales for pharmacy chains.

More critically, the consumer market for IoT is the most coveted demographic by retailers today: millennials.

According to Experian Marketing Services, the consumers that are helping to push connected devices into the mainstream are a key segment to engage. Smart or connected device users, as opposed to non-users, are generally younger, college educated and affluent.

This young demographic is already the most connected and the most mobile friendly. Retailers can expect this group to not only purchase connected devices but to understand the entire ecosystem in ways that facilitate non-assisted sales.

The IoT is still a work in progress, but it's one retailers are watching and already profiting from.

Suggested Articles

Costco changes up its menu items, and Alibaba and Guess partner for a physical store.

Janey Whiteside, Walmart's new chief customer officer, is well acquainted with the importance of customer service in modern retail.

Whole Foods will offer deals on Amazon's Prime Day, and tariffs against China are causing pricing hikes.