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Top 12 Use Cases of IoT in Retail in 2024

Cem Dilmegani
Updated on Jan 12
6 min read

The global internet of things (IoT) in retail market size is expected to reach $35.5B by 2025. Benefits such as:

  • Lower operational costs
  • Higher efficiency
  • Personalized shopping experience
  • The customers’ evolving tastes

Are factors pushing more retailer towards IoT(internet of things) implementation.

In this article, we will look at 12 use cases of IoT in retail , such as facility management, supply chain, logistics, and asset tracking.

Facility management

Facility management refers to hygiene, security, and product placement. Facility management can mostly benefit from people-counting tech. People-counting technology are sensors that anonymously count number of people in a space and monitor their movements.

Use cases of people-counting technology includes:

1. Hygiene

Especially during the pandemic, with hygiene measures being of the utmost importance, shop owners have to know which sections of their store are having the most foot traffic and congestion.

The location data will show which areas need disinfection first. Or where social distancing should be enforced the most.

Recommendation:

People counting sensors, such as Density Entry, uses depth data, ML, and computer vision to count people and show their congestion in order for the mentioned practices to be executed.

Density Entry’s sensors use infrared, laser-based cameras to capture depth data. Source: Medium

2. Product placement 

Knowing which areas of your retail shop have the most foot traffic can shape your product placement strategy. If through periods of extensive data-gathering and analyzing you have come to know that there’s a 60% chance that upon entering your store, the customer will turn right, then you might want to place your over/underperforming items in their eyesight. 

Recommendation: 

Prism Skylabs offers internet of things camera sensors that can anonymously keep heat track of individuals’ movement patterns from the moment they enter a location until when they leave. Their solution comes in-built visible dashboards that retail shop owners can use for actionable insight. 

You can also use retail space planning software that would help you maximize your usage of the physical space that you have. 

3. Security 

Internet of things devices such as CCTV cameras and sensors can also be used to ensure the physical integrity and security of the stores. This, in and of itself, is not a novel idea and has been around for some time. But it’s worth reminding ourselves that not all internet of things devices are avant-garde products. Some are products that we’re familiar with, only under a new buzzword. 

Supply chain & logistics

The use of an internet of things ecosystem can increase the efficiency of running a retail store. For instance, internet of things devices can provide inventory visibility into shelves, transit routes, and warehouses. Sensors and devices would gather up-to-date data from these links in the supply chain, and transport it all to the IoT cloud or any on-premise database the company uses.

The employees, then, by using retail operation software,  have access to the relevant data, such as shipment location, distance traveled, ETA, temperature, humidity, and more. Having access to this data will make for more efficient management of business continuity.

4. Cold chain monitoring

In 2018, the estimated amount of loss that food wastage cost grocers was $70 million. There are internet of things (IoT) environmental sensors that track the ambient environment for temperature, humidity, air quality, and other variables that could help retail grocery supplier manage their shipment and storage of perishable goods better. 

Recommendation:

WirelessLinks offers temperature sensors that can be embedded into the shipping container to relay the real-time degree of the shipping environment to the retailers. If the temperature threshold is then crossed, the receiver of the goods can then contact the shipping agency to solve the matter before the issue gets widespread.

5. Cart tracking

Annually every year, $800M worth of shopping carts are stolen. Annually, their worldwide estimate of theft stands at $800 million. Moreover, go to any large retail store or strip mall and you’d find all the carts scattered around the area where customers had left them prior to leaving. Replacing stolen carts and spending labor time looking for, and retrieving, the carts can be avoided. 

Recommendations: 

Retailers can tag their existing carts with motion tracking sensors and connect them to an asset tracking software to pinpoint the position of the cart for quick retrieval. 

There exists the potential for smart carts that have tracking technology embedded into them. These won’t require add-ons.

Amazon, for instance, has dash carts in their stores that can not only track the cart but also do the job of a checkout stall. But we weren’t able to find who manufactures them and how much they cost. So it’s permissible to assume the technology is not scalable yet for smaller-sized retailers. 

Smart shelves

6. Inventory restock

Smart shelves are tagged with RFID that can track the inventory that’s placed on them. So whenever a soda bottle, for instance, is taken off a specific shelf, the employees are instantly notified of one less inventory that’s on the shelf. This is a helpful addition to inventory management because it could eliminate shortages as the notification of restocking will be done in real-time. 

Recommendation:

AWM is a vendor that specializes in smart shelves. 

7. Inventory lookup

Another use case of smart shelves is the items’ positioning. Let’s say the customer wishes to know the specific location of a soy sauce from a certain brand. The employee can search the keyword on an application to know where on which aisle and shelf the sauce is positioned. 

The image of a shelf in Asian fitted with smart sensors and digital price tags displaying the contents' information.
Example of a shelf fitted with smart sensors. Source: Forbes

8. Price tags 

In economics, there’s the concept of menu cost, which says that in inflationary times, it’d cost more to print out new menus and price tags to reflect the rising prices. A digital price tag, or digital signage, at least in theory, makes dynamic pricing easier.

Recommendation:

Pricer is a vendor of digital signage that gives retailers the infrastructure for creating electronic price tags. 

A black & white image of digital price tags for fruits.
Examples of digital price tags. Source: Pricer 

9. Robots

By undertaking menial tasks such as identifying misplaced items and shelves’ capacity, robots can free up the human employees and allow them to focus on more intricate customer service responsibilities. The American chain store Target, for instance, used a robot named Tally to roam the aisles, tending to inventory management tasks.

10. Predictive equipment maintenance

Malfunctioning electric appliances, like heating and refrigerator units, could result in food spoilage and monetary loss for a store. These malfunctions can often happen unexpectedly and suddenly disrupt the business continuity of a retail store. 

If the machinery and equipment of the store are tagged with sensors tracking their temperature, pressure, vibration, and other factors, they would be able to identify when there is sub-optimum performance, which could be a signal for the need for maintenance. 

The advantage of predictive maintenance is that equipment is serviced before it reaches a critical state, resulting in less downtime. In addition, damage can be contained thanks to early detection and remediation when it occurs.

Recommendation:

Invest in sensors and connect them to a predictive maintenance software that consolidates all their input in one accessible location for data-driven decision-making. 

11. Personalized offers

Shops can use an internet of things system to provide their customers with personalized offers. Starbucks, for instance, uses iBeacon technology that sends promotion and sales notifications to the nearest passerby’s phone via Bluetooth.

12. Automated checkouts

Automated checkout, or self-check out systems, can improve the customer experience. Shoppers would log into their online accounts, and enter the store. From there, through sensors that are embedded on the smart shelves and are able to transmit signals to user applications, each item that gets picked off the shelf would be added to the shoppers’ virtual cart — and vice versa. The shoppers can then just walk out of the store and pay their balance through their applications. 

Amazon, for instance, has been trying out this new phase of checkouts since 2018 in their Amazon Go shops. The benefit it has for the shops themselves is no longer would potential customers be deterred from going into the score by seeing long lines at the cashier, in addition to not having to employ an extra workforce. So it improves the customer experience and reduces headcount.

Check our article on hyperautomation in retail for more examples.

Picture taken from customers seamlessly walking through an Amazon Go store.
Customers in a self-checking out, Source: The Guardian

For more on the internet of things

To learn more about how internet of things (IoT) is being implemented in other sectors of the economy, read:

Finally, If you believe your business will benefit from an internet of things solution or device, feel free to check our data-driven hub of internet of things solutions and tools.

And we can guide you through the process:

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Access Cem's 2 decades of B2B tech experience as a tech consultant, enterprise leader, startup entrepreneur & industry analyst. Leverage insights informing top Fortune 500 every month.
Cem Dilmegani
Principal Analyst
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Cem Dilmegani
Principal Analyst

Cem has been the principal analyst at AIMultiple since 2017. AIMultiple informs hundreds of thousands of businesses (as per similarWeb) including 60% of Fortune 500 every month.

Cem's work has been cited by leading global publications including Business Insider, Forbes, Washington Post, global firms like Deloitte, HPE, NGOs like World Economic Forum and supranational organizations like European Commission. You can see more reputable companies and media that referenced AIMultiple.

Throughout his career, Cem served as a tech consultant, tech buyer and tech entrepreneur. He advised businesses on their enterprise software, automation, cloud, AI / ML and other technology related decisions at McKinsey & Company and Altman Solon for more than a decade. He also published a McKinsey report on digitalization.

He led technology strategy and procurement of a telco while reporting to the CEO. He has also led commercial growth of deep tech company Hypatos that reached a 7 digit annual recurring revenue and a 9 digit valuation from 0 within 2 years. Cem's work in Hypatos was covered by leading technology publications like TechCrunch and Business Insider.

Cem regularly speaks at international technology conferences. He graduated from Bogazici University as a computer engineer and holds an MBA from Columbia Business School.

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