Why IoT could be the biggest game-changer for retailers since the internet

As retailers are turning to the Internet of Things (IoT) for ways to improve the customer experience and supply chain management, AVG Technologies’ senior security evangelist, Tony Anscombe, gives a glimpse of what’s to come…

According to recent research by Juniper Research, retailers are set to invest an estimated £1.6 billion on the Internet of Things (IoT) within the next five years – four times the investment being made in 2015. With IoT technologies taking up such a considerable share of budget moving forward, the industry is on the brink of wide-spread transformation.

The world of retail is about to get hyper-connected, which presents big benefits for both customer experience and business bottom-line. But, before IoT takes the shop floor by storm it’s important for retailers to understand what tech is out there and, in turn, what connecting their stores will mean for security.

So, what does IoT have in store for the future of retail?

What’s what in IoT tech?
Firstly, some of the biggest retail IoT investments already being made are in location-based beacon technology, like Estimote. The tech transmits location information from beacons to smartphones, allowing retailers – once consumers have opted-In – to track their whereabouts and communicate in real-time via their own app, sharing personalised, relevant ads, updates and other useful information to improve the shopping experience.

According to the 2015 Store Operations Survey by Retail Touchpoints, nearly 46% of retailers either now have or plan to use beacons in their stores. But for now, most of the beacon programmes are being deployed in pilots on a small scale as retailers try to understand how the technology can foster customer engagement.

In new developments at the other end of the IoT retail spectrum away from the store and more conveniently located in consumers own homes, the Amazon Dash Button has appeared. Amazon began offering the Wi-Fi enabled Dash buttons for its Prime customers to install in their homes to make it possible to re-order online without even needing to login to the site – essentially turning the home into a real-time shop floor, encouraging increased business sales.

Securing tomorrow’s store
Aside from deciding which of these emerging technologies are right for your business, there remains a number of things to be worked out before the future of IoT and retail in our lives becomes the norm. Chief among them are privacy and security safeguards.

All the new retail and other IoT technologies and services hinge on one thing: data. They are all feeding customer data and behaviour information back to retailers and their vendors to be tracked, analysed and recorded.

The availability of this kind of data will be crucial to the future of retail, but increasingly with IoT, consumers will face the question: are you more concerned with privacy or convenience? And the same question is of supreme importance to businesses in their adoption of IoT.

Business owners, small or large, must gauge these new IoT opportunities for the potential risks involved as the same tech that will be critical to the success of businesses in future will also create multiple points of vulnerability. Whether laptops or smart devices, beacons or buttons, as IoT technologies continue to proliferate within the retail sector, the ability to control and manage access to data and applications may be overwhelming for many businesses.

The answer to this lies in comprehensive security reviews that evaluate and address the risk of attack through the range of devices connected to a company’s systems. For example, mobile device authorisation (or de-authorisation) for specific apps and data sources will keep confidential business or consumer data restricted to certain individuals, limiting the risk of information falling into the wrong hands.

The need for implementing security measures like this within the retail sector is especially high, given the large number of people connecting to retail networks – from employees in the back office to consumer footfall in store.

The retail game is changing
As it stands, IoT may prove to be the biggest game-changer for the retail sector since the Internet itself, with wide-ranging implications for businesses and society. And like the Internet before it, all of the implications and protocols that will be needed aren’t yet known. It’s certainly a brave new world and businesses and consumers alike need to get ready for it.

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