From Beacons to Dash – a glimpse at the future of retail and IoT

According to a new research by Juniper Research, retailers will invest $2.5 billion on IoT within the next five years — four times the investment being made in 2015.

Some of the biggest retail IoT investments are being made in location-based beacon technology. Bluetooth-based beacon technology, like Estimote, transmits location information from beacons to smartphones and allows retailers, once you’ve opted in, to track your whereabouts and communicate real-time via their own app. The retailers can provide customers with personalizedm relevant ads and other useful information.

Forgot your shopping list? No worries, you’ll be reminded of products when you enter the store based on your previous purchases, or access shared shopping lists, and receive relevant special in-store coupons and deals.

Target is among the growing list of retailers testing the technology. It launched a test of beacons in 50 stores. One of the features integrated in Target’s app allows it to push timely recommendations and deals in proximity to a shopper’s location.

For a glimpse of how beacons are taking root at retail, Mobile Commerce Daily recently profiled a pilot program at Illinois-based Niemann Foods’ County Markets. The 44-store chain’s launch of in-store beacons provide shoppers with personalized digital offers, location-specific coupons and in-store maps to streamline the purchasing experience.

The results have been positive, including coupon redemption rates as high as 50 percent, compared to a printed ad coupon industry average of below 2 percent, reports Nathaniel Jones, the electronic marketing manager at Niemann’s.

According to the 2015 Store Operations Survey by Retail Touchpoints, nearly 46% of retailers either now have or plan to use beacons in their stores. For now, most of the beacon programs are being deployed in pilots on a small scale as retailers try to understand how the technology can foster customer engagement. So far, analysts report that the biggest barrier to adoption is getting consumers to turn on the Bluetooth capability on their phones.

Now, in new developments at the other end of the IoT retail spectrum away from the store and more conveniently located in your own home comes the new Amazon Dash Button. The eCommerce giant has begun offering the Wi-Fi-enabled Dash buttons for its Prime customers to install in their homes to make it possible to re-order online without even needing to login to Amazon. The inexpensive (US$4.99) small plastic Dash buttons are designed to be placed throughout the home to make it easy to re-order anything from coffee to soap — from where you use it most — with just a press of the button. No need to hassle with a shopping list, Dash is on the case!

On the downside, the Dash service is still in early stages and currently has limited product availability. However, it is earning the support of major brands from Maxwell House to Clorox. And, for the near-term, Dash does not provide immediate gratification; you still have to await a typical Amazon Prime shipment and delivery timeframe of overnight or later, depending on the product availability. (But that may change with Amazon’s planned deliveries by Drones sometime in the future!)

Also on the downside, think of the results if a button-pushing happy child or a teenager plays with Dash? What to do with twenty bags of dog food delivered at your door?

Looking even further ahead to where retail IoT is headed, Time Magazine asks in its review of Dash: “What happens when consumption becomes even less of a conscious process — when, say, our smart cupboards and refrigerators, empowered to monitor what we’re using, start making buying decisions autonomously?”

Indeed. There are definitely a few things to be worked out about the future of IoT and retail in our lives. Chief among them, we believe, are privacy and security safeguards. All the new retail and other IoT technologies and services hinge on data — your data. They are feeding customer data and behavior back to retailers and their vendors to be tracked, analyzed and recorded.

Both the beacon apps and Dash are opt-in services, and consumers must give their permission and have a choice to use them or not. But increasingly with IoT, consumers will face the question: Are you more concerned with privacy or convenience?

And the same question is of supreme importance to businesses in their adoption of IoT. Business owners, small or large, have to gauge these new IoT opportunities for the potential and risks involved…not to mention the potential for annoying customers.

The IoT may prove to be the biggest game-changer since the Internet itself, with wide-ranging implications to society. And like the Internet before it, all of those implications and protocols that will be needed, aren’t yet known. It’s a brave new world and we all need to get ready for it.

At AVG, our prime concern is with privacy and data security, and that’s why we are involved at the industry level to protect them.  For example, we support the OTA IoT Trust Guidelines Framework, which was issued this past month. To read the full Framework Goals you can visit the OTA site.

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