Paradigm Shift in E-Commerce via IoT

By Arunima S Kumar on June 29, 2017

E-commerce keeps on growing at a sky rocketing pace every year and there is no sign of it slowing down. The E-Commerce growth has consistently outpaced the total retail market for over 6 years. In fact, the U.S. E-commerce sales had hit $97 billion during the second quarter of 2016 making it one of the greatest year-over-year increase and became a dominant force in retail.

Despite these boom in the e-commerce arena, there is still ample space for aggressive development and Internet of Things (IoT) is the most promising catalyst for one such technology shift. IoT has created its niche as “the next Industrial Revolution” because of its influence to change the way people live, work, entertain, and travel, and even how governments and businesses interact with the world.

IoT has reached unprecedented heights since the past two years and is influencing the e-commerce industry by radically changing the way shoppers shop. It has transformed the traditional shopping approach into a more streamlined and user-friendly experience. IoT and e-commerce are now embarking on a common journey where every connected object becomes a potential e-commerce real estate. With IoT, washing machines can not only get the detergent delivered just in time when the supply runs out but also can recommend the right detergent, based on the usage or type of clothes. Wearable manufacturers can keep your doctor updated with your heart rate, temperature and fitness habits thereby letting him determine what risk zone you are in.

IoT Hallmarks in e-commerce landscape

  • Amazon’s Dash Button that could be attached to home appliances and allowed customers to place orders automatically by pushing the button.
  • IoT took marketing to the next level with Beacons, devices that retailers use to automatically send notifications and discounts directly to shoppers’ smartphones when they enter a store.
  • Smart Shelves automatically monitor inventory in stores and notifies the manager when an item is running low. This is crucial for inventory management, which can be an expensive and tedious process for managers. But connected devices handle all of this automatically to relieve managers’ stress and improve operating efficiency, which in turn saves the retailer money.
  • IoT takes shopping to the next level with Amazon Echo that lets customers place order and access information by a casual conversation with Alexa, Echo’s built-in intelligent virtual assistant.
  • Amazon has demystified the concept of shopping in late 2016 with its ‘No lines. No Checkout. Just Grab and Go’ store, Amazon Go. This requires the shoppers to scan their smartphones on entering the store, and Amazon’s “just walk out” technology will detect when products are taken off shelves (or returned to shelves) and keeps track of what is in the virtual cart through these smartphones. When a shopper is done shopping, he or she leaves the store, and the company will charge the account.

These are just few ways IoT has created a paradigm shift in e-commerce.

Major Shifts in e-commerce with IoT

The advancement of IoT in e-commerce will decode the retail market infrastructure from its very base. In fact IoT has the power to make the mundane retail tasks interesting. Few of the major and obvious technology shifts can be grouped as follows:

  • Customer Experience
  • Inventory Management
  • Logistics Management
  • Product Service

Customer Experience

IoT paves way for a more holistic shopping experience using the real-time data from the connected devices and sensors. This data can help the retailers gain key insights into their product performance, customer trends and market behaviour. Moreover they can also adopt a higher degree of customer-centric operations and refine their marketing process. So instead of flooding all customers with the same offer, marketing teams can create personalized offers that keep the customers engaged and satisfied with the product.

The humongous amount of data harvested from the connected ‘things’ also provide new business opportunities whereby the businesses can shape their product experience in real-time. For example, a retailer can use a customer’s location to deliver timely, relevant and personalized offers such as digital coupons and loyalty rewards.

In short this data-driven customer-centric approach empowers the retailers to build an entirely new paradigm of shopping for the customers.

Inventory Management

Seamless and uninterrupted inventory management is a crucial factor for the success of any retail business. In the current scenario, inventories are tracked via ERP systems which are capable of reconciling the stock in the warehouse and sending notifications to the vendors to replenish the stock. IoT lets businesses manage their inventories real-time without human intervention using RFID tags and sensors. The information can be automatically fed into the ERP system real-time. This can also be converted into a call for action for the customers by notifying them whenever new stock arrives. Smart systems provide valuable information to ecommerce retailers such as what’s under-performing and overstocked, what products are running out of stock, environmental conditions, online trending and countless other potential variables that impact sales output.

Logistics Management

IoT can give a reinforced makeover for the erstwhile Logistics Management in business. Real-time in-transit visibility is one of the most prominent impacts of IoT in e-commerce industry. The combination of cloud-based GPS and RFID fuelled by IoT and Data Analytics can bring new paradigms in transportation and logistics. The data gathered by these technologies will provide a detailed visibility to the manufacturer, retailer and to the customer. This information helps to automate shipping and delivery by exactly predicting the time of arrival and monitor important details like weather conditions, traffic conditions, road blocks and average speed of transporter. This can be transfigured into a high end experience with upcoming technologies like unnamed delivery drones by Amazon. These technology advances ensure better shopping experience and increases customer loyalty.

Product Services

Real-time analysis of device data and its integration with enterprise systems is enabling businesses to automate processes, launch novel services, enhance customer experience and improve decision-making process. Annual Maintenance Contracts powered with IoT will enable the tracking of validity and duration of contract with the customers. Customer specific automation will help the retailers setup system notifications and sending of warranty extension offers. This simple activity will lead to increased customer satisfaction, improve customer loyalty and also increase revenues through after sales services.

The Powerful Trio: ML, AR & IoT

Machine Learning (ML), Augmented Reality (AR) and Internet of Things is a terrific combination of technologies that could create a new breeze of innovation in the e-commerce industry. This powerful trio can join a customer’s offline and online dots to create a 360 degree view of the customer. A customer walks into a store and receives a notification on their phone alerting them that they have entered a smart store and has four items recommendations of their favorite brand and color based on their purchase history. The customers can virtually try on clothes, glasses, or even makeup. All they need to do is simply upload a photograph to a mobile phone or computer, and use overlay software that allows them to picture items on them before they buy.
Augmented Reality, Machine Learning and IoT are still in its infancy and is on its way of reshaping the ecommerce industry.


Internet of Things is a worldwide information infrastructure in which physical and virtual objects were uniquely identified and connected over the internet. IoT has set its sail to expand the scope and depth of e-commerce by linking people, smart devices and objects that were offline in the current e-commerce business model. This fuels product performance, shopping experience, customer satisfaction and ultimately reshape the future of e-commerce. Moreover the ubiquitous nature of the internet and decreasing cost of components such as sensors, microchips, actuators etc. helps to extend IoT powered e-commerce beyond websites, mobiles and apps. IoT has enhanced browsing, shopping, paying and getting stuff delivered so frictionless that it has almost become invisible.

Tomorrow awaits a world where every connected object could be a window into an ecommerce store and every unconnected ‘thing’ is a missed business opportunity.

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