The Impact of Internet of Things to Retail Business
Introduction…………………………………………………………………………4 1. Study Background…………………………………………………………………. Problem Statemen. Research objectives. Research Questions. 4 Installation and Maintenance …………………………………………. 5 Connectivity ………………………………………………………………16 3. 0 RESEARCH METHODOLOGY 3. 1 Period of Study ……………………………………………………………………. 2 Area of Study ………………………………………………………………………. The findings of this study will guide retailers on the deployment of IoT in the retail business. CHAPTER 1: INTRODUCTION 1. 1 Introduction The world as we know it today has been revolutionized by the advent of the internet and its wide use, in the day to day activities of humanity. The Internet has shifted from a tool which was used by mega-corporations to one which encompasses the interactions of humanity at whatever level in the society they are. this is after the serious attempt by the providers to bridge the technological gap between ages and regions. Technological development has taken individuals and societies into the area of information age where it can be accessed easily and conveniently.
For the three decades, IoT has then shaped the retail industry, where there were the earliest dot. com vendors up to the development of mega giants in E-Commerce such as Alibaba, Amazon, or eBay who have extended their business to Malaysia (Jeon et al. Both the new and the old vendors in the retail business are grappling with issues of how their customers will find and buy their goods. However, many companies are coming to terms with IoT and using omnichannel retail models which provide efficient and effective shopping with lowered prices, having many choices, in both mobile platforms and in-store (Jeon et al. Online shopping in Malaysia has transformed the conventional means of operating business due to the aspect of traffic jams, small parking space in retail shops, anxious crowds in the shops and limited time.
However, online shopping in Malaysia is considered as an average toll in the usage of internet, however, this has been on a steady increase on recent times. The Internet has offered many benefits to Malaysians, especially in cities such as Kuala Lumpur, by helping many of the clients to be more effective and efficient in online shopping. Efficient customer satisfaction has been enhanced by online purchace because it saves money, time, it is efficient, effective, convenient and increases the consumer and retailer interactions (Jeon et al. The quality of the products, efforts and consumer satisfaction in consumer experience in online shopping is critical the success of IoT in Malaysia. The other objective this paper focused was on the impact of the IoT in the retail industry with a specific interest in Malaysia.
One of the fundamental issues to understand is that since the 2000s the internet has spawned many innovations, especially in the business sector. In Malaysia, especially in cities such as Kuala Lumpur, Petaling Jaya, and Serebang Perai, among other major cities have an increased traffic in the use of digital technologies in the widening of their experience in the retail. This ranges from their experience in choosing products to purchase and post-purchase effect of a new product. Therefore, tech-savvy businesses are utilizing this tool to have reach customers in moments which matter. Also, technology assist retailers to stock new products to the store and use store layout optimally. Retailers are using sensors on goods so that they can trace the goods on move within the store, which limits cases of theft.
Also, others are utilizing mobile phone payment while the customer is in the store and not necessarily at the checkout. According to Dixit and Sinha, (2016) Walmart is one of the stores which have incorporated robotics in the customer and retail experience to better customer experience and efficiency. A 2016 global shopper survey noted that 96% of retailers have incorporated components of IoT in their businesses to increase consumer experience and strengthen the relationship with their clients (Dixit and Sinha, 2016). Online shopping is a security a concern, especially where clients have to pay online. It can create avenues for scammers and fraud if it is not regulated and well the controlled. Also, many of the customers can develop skepticism on new stores which result in low sales or slow growth in the retail sector.
The other challenge is on maintaining stock control and a consistent supply chain. Having an updated inventory can assist the retailers in having a better experience in this, but it can be worsened on the things that would likely go on out of stock unnoticed (Dixit and Sinha, 2016). To explore the challenges facing IoT in the retail industry in Malaysia. 2: Research Questions In relation to the research objectives of this study, the following research questions are expected to be answered 1. `what are some of the factors which have precipitated the incorporation of IoT in the retail business. Does IoT guarantee customer satisfaction or better shopping experience in retail business? 3. What challenges are posed by IoT in its adaptation and implementation in the retail business in Malaysia? 4.
Ahasanul, H. & Ali, K. (2007) believe, many companies are embracing tradeoffs which have been facilitated by the onset of IoT in the retail industry. A company can resolve to offer premium prices on full-featured products, with the intention of securing hire margins but with low sales per unit because only a few of the customers can afford that product. Alternatively, they can offer bare bone prices of a product with the intention of selling many items since a lot of people can afford the product suggests Ahasanul, H. While the internet has increased the experience of both retailers and consumers, it has failed to spawn a situation where retailers can know which products are desired by clients and when. Marimuthu et al.
, (2011) argues that retailers have access to customer preferences, but this falls short of hanging a complete picture of the customer. In this aspect, there is a degree of limitation in connectedness between online services of a retail store and offline one. The internet through IoT strategies gives the retailer the ability to exchange information with the retailer, however, to achieve it, it through many efforts, time and cost. Psychologists have indicated that giving customers many alternatives to choose from can make them have anxiety, and become unable to choose because of confusion argues Story, J. & Hess, J. For those high ends retailors, IoT has created opportunities for powerful clientele services and gratification. In most instances, one can find that most of the clients have done a lot of browsing and research on a product before even they make a trip to the store (Shen and Huang, 2011).
Therefore, equipping the store with necessary data acquisition mechanisms of the information of the client, such as frequency and items purchased can increase client service. One of the most critical issue which can cause failure if the adaptation of IoT in business is the complexity of the systems. This can cause challenges in protection against malware or having its issues in the management of the systems. They require expertise and constant maintenance or supervision, without which the business can lose a lot of money due to systems failure (Brooks, 2017). For example, a company which has a printer which is IoT enabled can be disadvantaged if the printer has a malware and orders multiple times for ink when it is only needed for a single cartridge.
2 Compatibility and Longevity Compatibility and the longevity of the devices used is a paramount concern to the use of IoT in the retail business. In areas where clients need to use their credit cards or other payment methods to purchase items, protection of that financial information from fraud from both inside the retail house and outside access is always paramount. This can pose serious challenges to upcoming retailers who would have serious financial issues to have advanced data protection systems and software (Mahmood, 2018). IoT has since then turned out to be a serious concern in security and has drawn many players in the industry to evaluate the position of IoT in the retail business. Every day, there are numerous codes which are being included in the networks and they provide loopholes for malicious actors to use malware for their own means (Mahmood, 2018).
There have been rising occurrences of Cyber breaches all over the world, which has increased cybersecurity fears. One of the critical issues in IoT which increases customer trust and loyalty is the reliability of its systems. Therefore, inconvenience and high maintenance cost prohibit many retailers to continue incorporating IoT into businesses. Connectivity The current communication methods structures which are used in IoT are usually centralized and use client/server model to authorize, authenticate and connect multiple devices or nodes into the network. One of the primary concerns is that in the future, the problem of connectivity in IoT will management of connectivity of multiple devices into the servers or the systems of the retail business (Sinha & Park, 2017). Centralized operation systems will suffer from bottlenecks because when the network grows, billions and billions of devices will be connected to the servers.
In the stipulated time of the study, the paper took account of the data collection design which was employed to gain an insight into the impact of IoT in retail. The rationale for choosing this time frame is because it coincided with massive buying in the February, because of Chinese New Year and Valentine’s Day. It is in this period where studies have shown many people tend to use the internet to browse for items for a specific purpose, and retail stores offer discounted prices for such. 2 Area of Study The paper focused on the impact of IoT in retail in Malaysia, especially in cities such as Kuala Lumpur and Kuching. The rationale for the choice of these cities is because they are home to some of the largest retail stores in Malaysia, and they have huge populations who are target markets for the research.
It will be a single case of a case study which will be explored by the research paper. 5 Data collection This study will incorporate the actual visitation of the subject of the study, the participants and the research audience. Data will be collected by closely interacting with the participant about several structures and ideas relevant to the study. In this case, the paper will select into the report; themes, common patterns, embedding and connecting ideas of the impact of IoT to both retailers and consumers. Data collected from the interviews and others context of interaction will be recorded both in hard copy and soft copy. The store had set up kiosks in within the place and equipped them with computers and tablets so that the customers can still purchase the items online.
In this aspect, the customer could purchase the product they have perused online while they can see it and try it in real life. also, the store allowed its customers to connect to their free Wi-fi with their tablets or smartphones, to purchase what they have seen upfront. The store was keen in using the digital pop up kiosks as a way of measuring or leveraging the number of new customers, the dwell time in the store, window shoppers, repeat or frequency behaviors and the distribution of footfall in the store. Comparing the sales and the aggregating of data collected from the digital kiosks, Zalora was able to gain insight into the customer behaviors, product appeal measurement and how to timely react to promotions.
The information gained here was the compared to other data collected elsewhere, such as purchases which shed more light on the behaviors of the customer. Karthick goes on to laud the SPoT as a vital tool to their business because he asserts that their marketing department used this analytics to prepare and launch marketing activities and promotion which would impact the client more. In this case, the customer experience was at the fore of the concern of the marketing team, which used the data gained to tailor specific marketing initiatives to cater for the client. He concurs with the idea that at the end of every day, their objective is to see the customer satisfied with the experience in the store.
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