Ashraful Islam, Research Assistant, Textile Focus
There is so much hue and cry in the recent year about the topic Industry 4.0 that means fourth industrial revolution which is the label given to the gradual combination of traditional manufacturing and industrial practices with the increasingly technological world around us. There is so much reason behind this vide because Bangladesh is now RMG import-based country. 85% of its total import amount has come from this RMG industry. Because of industry 4.0 there will be so much reformation happen in this sector as Bangladesh is 2nd largest Apparel import country after china. As industry 4.0 will force to reform manufacturing country, it will also affect retail industry as well. In earlier, previous month newsletter of “Textile Focus” presented how industry 4.0 will affect manufacturing and which tools will be used. How industry 4.0 will affect retailing, is presented in this article.
Retailing is a distribution process, in which all the activities involved in selling the merchandise directly to the final consumer are included. So it can be said that retailing depends consumers behavior. With the rapid growth of technology consumer behavior also changes rapidly. Let’s have a quick look at consumer behavior because of rapid technology upgration. Considering all these consumer behavior factor lets presented article how industry 4.0 will affect retailing industry.
Big Data Approach in Retail
Big data describes a large volume of data that is used to reveal patterns, trends, and associations, especially relating to human behavior and interactions. Big data approaches in retailing are-
Customer spending prediction: One of the most common ways that big data is collected in the retail industry is through loyalty programs. These days, it’s also collected through credit card transactions, IP addresses, user log-ins and more. As more information is collected, retail businesses can analyze the ebb and flow of shopping and spending by consumers historically to predict future spending. Using this technology, by analyzing 150 million customer account Amazon generate 29% sales.
Demand Forecasting in Retail: The world depends on programming/algorithm now. Big data uses such kind of algorithms which analyze social media and web browsing trends to predict the next big thing in the retail industry.
Analytics of Customer Journey: Big data can help retailers answer questions such as:
Where are customers actually looking for product information? Where are we losing them?
What are the most effective ways to reach them and compel them to purchase?
IoT Application in Retailing
The Internet of Things is simply “A network of Internet-connected objects able to collect and exchange data. IoT applications in retailing are-
Automated Checkout: With IoT, any retailer can set up a system to read tags on each item when a customer leaves the store. A checkout system would then tally the items up and automatically deduce that cost from the customers’ mobile payment app. McKinsey estimates automated checkout can reduce cashier staff requirements by up to 75%, resulting in savings of $150 billion to $380 billion a year in 2025.
Personalized Discounts: Setting up sensors around the store that send loyalty discounts to certain customers when they stand near products with their smartphones, if those customers sign up for a loyalty program in advance.
Beacons: By using beacons (first introduced by Apple 2013) customers can receive discounts, special events, or other reminders when they’re near a shop and have previously downloaded the store’s app. Swirl Networks Inc. found over 70% of shoppers say beacon-triggered content and offers increased their likelihood to purchase in-store.
Store Layout Optimization: It can be found that most of the time retail space isn’t optimized because of customer behavior. By employing aisle-analytics software with infrared sensors, retailers can use IoT technology to improve their retail layout.
Supply Chain Management Optimization: With RFID and GPS sensors, retailers can use IoT to obtain more precise data, like the temperature at which an item is being stored, or how long it spent in transit. Retailers can use that data to improve the quality of transportation moving forward — and, better yet, you can also act in real-time if a product is being kept at temperatures too low or too high, avoiding a substantial loss. According to a TATA Consultancy Survey and Business Insider, manufacturers utilizing IoT solutions in 2014 saw an average 28.5% increase in revenues between 2013 and 2014.
Robot: Retailers can use robots to roam the store and take note of misplaced items, or products running out of stock. By taking over simple inventory tasks, Target’s robot frees up Target’s human employees to focus on providing top-notch customer assistance.
The Cloud Effects in Retailing
Smart Mirror: Imagine looking at a mirror and it will be a customer virtual reality tool to know what looks good on him/her and how he/she can mix and match. Smart Mirrors, such as the ones at Oak Labs fitting rooms have smart displays that can be customer virtual changing room. It helps shoppers easily decide on what items to buy, and also help retailers know more about customer expectations.
Aids Supply Chain Process: Collaborate Cloud captures real-time status information, streamlines inventories, tracks deliverables and to-do’s and collects marketing data. If retailers see the supply chain as a crucial area of focus, investing in a cloud collaboration platform that’s specifically geared towards retailers could be of great benefit.
Reduce Cost: With low-cost development tools required in implementing cloud technology (as well as maintenance), retailers can use it to reduce spending. Pete Marsden, Chief Information Officer of Asos, said the company does not have to keep buying new equipment because of the use of cloud technologies.
Reduce Communication Gap: Success goals in retail become less complicated and achievable with the help of cloud-based technology. Cloud-based technology gives retailers access to industry-leading inventory processes and makes things less sophisticated for both the enterprise managers and staff.
Augmented reality can improve navigation around warehouse territory when big spaces and many inventory items are involved. The creation of virtual retail stores of any size makes it possible to stay closer to the customers with no inventory costs and long lines. Gamification added to the physical products helps to engage customers with a product and works as an incentive to a quicker purchase. Brands can incorporate AR experience into an advertisement which directs the user to the additional Web content, product video, and coupons. Augmented reality functionality helps merchants’ offers get found and used by consumers. AR-enabled store windows entertain potential customers and make them wonder what is inside. The “projected” catalog items give a customer a real-time, scale view of what the product would look like in her place. By performing all these functions, augmented reality technology and AR apps have created limitless marketing and advertisitng potential for retailers. It provides retailers to converge physical store and online experience.
This affects can be explained through an experience of Danit Peleg, a fashion student. She said that- “In have been travelling for a weeks at a time with only one suitcase of clothes. One day, I was invited to an important event, wanted to wear something new and special for it. So, I looked through my suitcase and couldn’t find anything to wear. I was lucky to be at the technology conference on that day and I had access to 3-D printer. So, I quickly design a skirt on my computer, and I loaded the file on the printer. It just printed the pieces overnight. The next morning, I just took all the pieces and assembled them and I provide this interview wearing this clothing.” From the interview, it can be said that soon people will download their clothes.
The analysis of this article depicts that because of the fourth industrial revolution that means industry 4.0, technologies are emerging at the speed of light. Marketers that are open to new opportunities and adopt trending technologies for retailing industries are the most likely to grow their revenue and market share. The tools concerning with smart retailing will play a vital role in apparel retailing industry pertaining to the issues like simulating garment designs, digital marketing, supply chain integrations and consumer data analytics. At last, because of the Fourth industrial revolution lets have a quick check of graph of robotic effects in numerous sector.
- The power of BIG DATA IN RETAIL- Ron Barasch