How IoT Will Save Retail

Physical retail is struggling – as mobile apps make shoppers savvier and less dependent on going to the store to buy what they want. Joe Jensen, Intel’s GM of Retail Solutions says that The Internet of Things could be physical retail’s lifeline as technology and data deliver a smarter shopping experience to these savvy customers. Find out how.



“Retailers are losing a ton of business today and I don’t know that they really understand how much of their shopper base moves where they purchase because of that inability to really deliver what they want when they want it.”

That’s the way Joe Jensen, VP of the Internet of Things Group and GM of the Retail Solutions Division at Intel, sees it.

As Jensen explained to MPD CEO Karen Webster, the explosion of connected devices and data fueled by IoT will also bring on some dramatic changes to retail economics. Next year, that explosion is expected to connect as many as 6 billion devices to the Internet – devices that Jensen says Intel is working hard on to help physical retail remain relevant with an increasingly digital shopper.

Jensen says that enabling merchants to very “affordably and much more simply” have greater insight into what is actually happening in the retail environments helps them understand what shoppers are doing based on how they move through the store. Analytics can help to predict what consumers want, which in turn can empower retailers to offer more relevant and meaningful offers.

The idea is that the use of IoT technology can bring back the visibility into the retail experience that many large-scale retailers are missing and help solve for the inventory issues that may be costing retailers big time.


As Jensen pointed out, the Internet has enabled a shift in consumers where they can afford to be much more demanding today; if your store doesn’t have what they want in stock, going elsewhere is easier than ever before.

But, rather than addressing the issue head-on by improving inventory management and ensuring consumer expectations are met, Jensen said many retailers look to “band-aid technologies” for a quick fix.

While offering shoppers the opportunity to buy a product online and ship to their home when the item is out of stock in-store is an option, research shows that a very small fraction of consumers will actually go through the trouble of completing the sale.

Jensen spoke of a recent study that found that only 1 percent of shoppers who see something out of stock in-store will eventually make an endless aisle sale. This probably has to do with the journey it takes to get from point A to point B, which usually involves flagging down a clerk to go look for the product, waiting for the clerk to go in the back and dig around for it, waiting some more time for the clerk to come back and offer up an endless aisle opportunity and then actually closing the sale.

Today’s consumers just do not have the patience for that, and why should they when technology could help to make the “item out of stock” problem go away altogether?

Back in the day when many merchants only owned an individual store location, being aware of inventory and customer preferences was significantly more manageable than it is today, when some major retailers are overseeing hundreds and thousands of store locations.

According to Jensen, in a standard retail setting the accuracy of typical SKUs is only around 60 percent, leaving in-store locations with roughly 40 percent of SKUs incorrectly accounted for. A problem like this is something a single store owner would most likely not have to deal with.

Applying technology in the retail space to solve for lack of visibility will essentially bring back an experience that was achieved more easily during a time when the technology wasn’t even in place yet.


Nearly 60 percent of purchases in the U.S. are for things that people didn’t really need or didn’t intend to buy, Jensen noted, emphasizing the enormous opportunity costs for retailers that are not optimizing and managing their inventory stocks.

The key is for retailers to utilize connected or smart devices like sensors to better understand what is physically available in-store and how consumers are moving through the retail location.

Jensen pointed to an example that has been used in stores for years, where a digital screen is displayed in the storefront that not only detects when a shopper is nearby, but can also pick up on the gender of that shopper and present ads that are more relevant to the person walking by.

New technology looks to improve upon this even more by sensing a shopper’s size as well, allowing what’s only truly available in-store to be offered to consumers and eliminating the disappointment that comes with wanting an item you can’t have.

“It’s all about showing things to shoppers that are relevant to them and a big part of relevance is show them something you can sell them right now,” Jensen said.

For Intel, the driver for using IoT in the retail space is to improve upon the retail experience for shoppers, not to just build technologies that enable retailers to push products consumers don’t want.

While Jensen’s definition of the “perfect shopping experience” involves how things are presented to a customer in-store and the service they receive, it also means that if a shopper is interested in buying something, they have the ability to do so right then and there.

“Today’s shoppers are much less patient than in the past and the way we view it is that shoppers want frictionless experiences, so when you come in the store it’s easy to find things, when you need help the help is there, when you want to close a transaction you can close it quickly,” Jensen explained.

“It’s about bringing up that level of experience by taking out all the friction that slows transactions down.”