How Internet of Things (IoT) will Redefine eCommerce
The one thing that all technology geeks are bracing for is the Internet of Things (IoT). The transformative potential of this new technology is bruited to be so immense that it would drive the human element completely away from every established business models. The disruptive impact can well be gauged by industry estimates which says that by 2020, there would be 50 billion connected things on earth with 5 million apps ruling the roost. This translates to 6 connected things per person. Come 2035, the figure will climb up to 1 trillion connected things with 100 million apps. With such staggering all round connections, one can’t stop but wondering about the impact of this disrupting technology on e-commerce.
The concept of the Internet of Things took shape when a Coke machine was being tested at Carnegie Melon University in the 1980s. Connected to a network, programmers discovered that they could check in with the machine, anytime and from anywhere, to learn if it needed restocking or not. Changes introduced by IoT in eCommerce would be a takeoff from the experiment in 80s. Retailers would have a series of devices to know exactly when consumers need a product. Most of these devices won’t have a screen, will communicate with each other and report back to the retailer.
IoT will help e-commerce merchants manage inventory like never before. Each product would be connected with sensors making it possible to track them individually as well as in pallets from a warehouse stacked with millions of such products. When the product gets used up fast or nears its warranty period it would raise an automatic alert to place orders. Thus inventory management accuracy will get clinical to the point of zero margin errors. Likewise, fleet management, managed effectively with GPS devices, will scale to a new level of precision.
IoT will help identify the best delivery route, recommend the ideal driving speed, automatically adjust storage temperature while transporting perishable items, raise alert for any unplanned stoppages, and predict maintenance issues before the truck breaks down. All these translates into reduced fuel costs, guaranteed product preservation, accurate lead times and control over the life of the fleet. Besides these, IoT would enable real time and prioritized promotions i.e. send only one preference-based promotion to the customer’s smartphone to reduce confusion.
The future of eCommerce lies in connected devices. If devices take on the ordering process on behalf of the consumer, e-commerce companies need to figure out how to connect to people’s everyday lives in order to stay in contention for the long-term race.