IoT in Ecommerce: 3 Ways Connected Things Reshape Online Trade


How is technological progress adapting to the clients’ lifestyles? In this article, Alex Husar, chief technology officer, Onilab, shares his thoughts on how the Internet of Things (IoT) impacts the ecommerce business. The article covers headless ecommerce, predictive maintenance, and remote monitoring, among others.

According to Mordor IntelligenceOpens a new window estimations, the worldwide IoT market reached $761.4 billion in 2020 and will rise to $1,386.06 billion by 2026. The CAGR (compound annual growth rate) is predicted to be 10.53% during this period.

Growth of the global IoT market in billions of dollars

The Internet of Things is essential for the future of various sectors. And online trade business is not an exception. IoT in retail examples include:

    • smart shelves with automatic heating and lighting;
    • smart factories, monitoring industrial processes to discover faults; among other things.

This article will go over the top three ways IoT technology is affecting the ecommerce business.

3 IoT Applications in Business and Ecommerce

1. Discovering new shopping platforms

Today’s vendors provide customers with a unique online experience and extend store accessibility beyond phones and computers. The only thing users need to do is press a button and get what they need in no time.

How can online store owners improve the shopping experience? For example, they may incorporate a smarter Magento on-site searchOpens a new window or other search solutions so that customers can find the needed product faster. Enhanced search solutions like voice or image search help more prospects convert.

How is IoT involved in this? IoT in ecommerce is bridging the gap between web developers and retailers, delivering a new level of customer service.

Connected devices serve as a tool for finding items. At the same time, they’re also a medium for purchasing products. For example, you can browse the store from intelligent fridges and TVs or order voice assistants like Alexa to deliver goods to your doorstep by a particular time.

How do you link up solutions for multiple customer touchpoints? For instance, with the help of cutting-edge technology, known as headless commerce architecture. Traditional monolithic ecommerce websites usually don’t have a separate back-end and front-end. The alternative option involves divorcing the front-end from the back-end and using APIs to connect them. This allows developers to integrate more than one “head” (or front-end) specifically created to cater to a particular device type.

It means traditional shopping will have to share its place with headless commerce. Consequently, the ecommerce industry can make use of IoT devices and additional sales channels thanks to this omnichannel solution.

See More: 7 Top IoT Security Trends and Predictions for 2022

2. IoT in ecommerce predictive equipment maintenance and smart inventory management

Product storage is the next step in using IoT in ecommerce. RFID (Radio Frequency Identification) tags and IoT sensors offer an innovative way to manage inventory.

What can these sensors and tags do? They collect vital product information, including:

    • the sort of items;
    • whether they’re available at the moment;
    • their expiration date.

It’s worth noting that it requires no human intervention. It helps business owners track the amount and quality of their products. Does smart inventory management benefit customers as well? Yes, this technology allows them to monitor the product’s status and availability.

Predictive equipment maintenance is also one of the IoT applications in business. It can help save energy, prevent equipment failures, and reveal other problems.

Let’s take refrigerators as an example. If a retailer stores goods in freezers, he can connect them to sensors. They’ll send information about food safety, i.e., how to store and handle food to prevent the growth of pathogenic bacteria.

For example, the refrigerator is damaged, and the food is deteriorating. Signals for sensors may be increased energy use or the temperature on the shelves and in the compartments.

Smart shelves have also boosted the evolution of inventory management. They keep track of how many goods are on hand and replenish them if necessary, preventing items from going out of stock. Shelves don’t make mistakes typical of humans and complete tasks several times faster.

Look at an IoT system at the Levi’s Plaza stores in San Francisco. RFID tags are connected to each product, sending data to the cloud for further analysis:

    • how many goods are left;
    • what and when people buy;
    • which things a store needs to restock;
    • which are still available.

 An RFID tag attached to a pair of jeans

Source: Levi Strauss & Co.Opens a new window

See More: Are IoT Connectivity Providers Ready for the ‘$1 IoT’?

3. Supply chain management as one of the IoT in retail examples

The third IoT application in the ecommerce business concerns the transportation process. IoT devices assist online merchants by tracing an item’s journey and improving delivery metrics. They can forecast the exact arrival time and avoid deliveries from being lost or carried to the wrong customer.

IoT sensors and RFID tags provide businesses with information on their items, for example;

    • where they are at this time;
    • their path;
    • weather conditions;
    • delivery speed;
    • driver status.

If the driver can’t go due to the bad weather or there is a traffic jam, the delivery speed will be slow. The system analyzes these conditions based on the preset settings and sends signals to the business owner to change the route or alert clients of the delay.

As far as customer benefits are concerned, the devices send clients automated messages regarding their orders and when they’ll show up at their door.

For example, Amazon uses IoT-enabled robots to handle order assembly and packing, among other tasks. The Amazon Prime Air service is another solution from this ecommerce giant. It employs drones to pick up and transport packages.

BMW, Tesla Motors, Mercedes-Benz, Google, and others combine IoT with autos to build self-driving vehicles. Driverless gadgets are most widespread as slow-moving robots at warehouses. However, companies enhance them to transport purchased things at longer distances.

For example, Domino’s collaborated with Nuro to launch autonomous pizza delivery in April 2021.

An employee loads pizza into a driverless delivery vehicle

Source: Domino’s Self-Driving DeliveryOpens a new window  

See More: Industry 4.0: Building the Foundations of a Sustainable Organization

Final Word on IoT in Ecommerce

Why are leading ecommerce companies implementing IoT technology? The reasons include:

    • improving customer experience;
    • saving expenses;
    • increasing security.

Trade is approaching a new stage of transformation, just as digital solutions and smartphones are replacing landline phones and paper. IoT allows businesses to stay current in the marketplace and streamline processes.

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