Ten reasons retail businesses need a strategy for the Internet of Things now

By Tracy Issel , General Manager, Worldwide Retail, Consumer Goods, Hospitality and Travel at Microsoft

Tapping into the Internet of Things (IoT) mega-trend is becoming table stakes for businesses wanting to compete in virtually any industry. Retailers who want to maximize sales and optimize customer service need to equip sales staff to become brand and customer champions, optimize operations to meet customer expectations, offer interactive, differentiated in-store experiences—and much more.

Recently, Susan Hauser, Microsoft’s Corporate Vice President of the Enterprise and Partner Group, blogged about the universal need for businesses to implement an IoT strategy. Here’s my take on what’s in it for retailers and brands—a slice of the top ten benefits of IoT in retail:


#1. Deliver better customer experiences. With IoT, you can embrace device choice and anywhere access without having to compromise security. Transform customer service by offering real-time inventory information and product comparisons on the sales floor, and a streamlined checkout process. Provide innovative shopping experiences with new devices and technologies that delight your customers—such as Coca-Cola Amatil’s new interactive beverage-vending coolers. And deliver the best of online experiences to in-store shoppers by gathering, analyzing, and acting on data across channels—including social platforms, mobile apps, online transactions, and in-store interactions—for offers tailored to individual customer’s preferences and buying patterns.

#2. Drive smarter store operations. You can increase efficiency and flexibility in your operations—and decrease costs—by making devices and systems more intelligent. Smart shelves, refrigerators and vending machines capture usage patterns, automatically request inventory replenishment, and update price labels in real time. Mobility-enabled store associates are more productive and can provide better assisted selling. Connected refrigerators and other food-storage units on board a luxury cruise liner vastly streamline inventory processes and employee workflows. And flexible platforms allow you to seamlessly integrate new devices with existing systems and securely collect and transfer data that can be turned into rich operational intelligence.

#3. Optimize supply chain and inventory in real time. The Internet of Things can take your supply chain and inventory management to the next level by connecting systems and combining data insights across the demand and fulfillment networks. The Internet of Things makes it easier to collaborate with suppliers and use deeper data insights to improve demand forecast accuracy, production scheduling and inventory efficiency. With a more accurate and detailed view of customer demand and supplier capability, you can make better decisions and always have the right product mix with the right inventory level—whether in one retail outlet, or, in the case of Tommy Hilfiger Japan, across 170 locations.

Increasingly, retailers and brands who want to better understand their customers and improve operations need to adopt the technologies that drive IoT, introducing connected devices, assets and systems into the enterprise—or just connecting the ones already in place—and then harnessing and analyzing the data they create.


The Internet of Things is thriving right now in the retail industry, in the point-of-sale (POS) terminals in stores, the networks warehouses, the RFID tags in supply chains and the smartphones customers bring into stores. The devices, line-of-business assets, data, and tools that run businesses can be brought together to help retailers reap real value from IoT.


Read the full “top ten” list for retailers here, and check out Microsoft’s vision for IoT in retail.