The impact of IoT technology on your business model in 2020

With the pandemic having disrupted the age-old ways of trade, making most of the common practices obsolete, more and more growth-focused marketing departments are awakening to the idea that AI will revolutionize their traditional practices. Hence, it is important to understand the impact of IoT technology on your business model in 2020.

There’s no denying that the COVID-19 pandemic has drastically changed the world’s shopping habits.

Last few months have quite proved that technology-forward practices like content commerce and shoppable video will act as the sandpaper that reduces friction in the online shopping experience. With this new normal comes the merging of Artificial Intelligence and Machine Learning into eCommerce platforms, offering a significantly more personalized experience for consumers.

How is AI changing the eCommerce business model

The primary change is through Chatbots that have become the most common way to scale the ‘personalized shopping assistant’ experience for online shoppers. Many online businesses are creating systems that can automatically identify the underlying message of most chats/texts with the help of NLP and analysis. So when potential customers ask a question about e-commerce products, AI can be used to identify the keywords then send an automatic script that addresses the question, providing them with appropriate responses quickly. 

Another way businesses use AI is through image recognition classifiers which are used to identify products within images and video, in real-time. Today’s customer has a short attention span. As such, customers expect much more from brands and experiences than they have in the past.

With due credits to AI, the process is direct–identify the product in a particular image or video frame, search the catalog, and serve up relevant products based on the computer vision results. AI as it pertains to computer vision can have massive returns for companies who spend a portion of their marketing budget on content and have an especially large number of offered products.

Machine learning algorithms have now reached a point where they can even predict a specific individual’s behavior with greater accuracy than that person’s own spouse. It’s become quite normal for brands to now tailor different messages to different factions of their target market. The use of deep learning in eCommerce marketing has led to optimized ad creation and significantly higher ROI.

But if you are into this, you need to realize that technology in today’s world is not the use or modification of one gadget to do all the things you want it to do. Smartphones aren’t the primary technology. They are in reality the bridge that connects all the modern techs. This is why IoT has become significantly as important as AI and ML post-covid. 

But then again, let me begin with the basics of IoT before letting you know how it is highly impacting the eCommerce world.

What does IoT mean

The Internet of Things i.e. IoT is a referential term for a system wherein multiple physical devices are connected with each other via the internet. It’s an important concept in today’s business world because IoT enables ubiquitous computing (available everywhere), which is crucial to creating a chain within any organization and consumers as well. 

IoT devices collect and share data, making it easier to automate processes and tasks with little to no human intervention. 

Let’s dive into some of the ways in which IoT can impact your online business model.

Why is IoT important for your eCommerce business model

Personalized Targeting and Support

Thanks to IoT, the possibilities for making individual product and service recommendations are limitless. The personalized advertising that is capable of addressing a specific audience with meaningful, relevant, and context-aware ads and recommendations is an excellent example of how IoT can help knowing customer context and accordingly retargeting them.

This is also opening up new possibilities to draw relevant user data and insights. For example, the driver information collected through connected dashboard systems in modern vehicles can help an insurance company to assess the risk proportion better and making insurance product suggestions accordingly.

Streamlined Supply Chain Management

For any e-commerce business, the most important thing is to manage the entire chain that keeps the supply of goods and commodities alive and working in a smooth and streamlined manner. Well, the IoT devices can help to manage the e-commerce supply chain more professionally.

Thanks to the connected devices, many tasks in the supply chain can be automated and performed without the least scope of human errors. The connected technologies such as RFID tagging and GPS are helping the e-commerce stores to help the transfer of goods in a smooth manner. Moreover, with precise and real-time information sharing about the cargos and the status of the items in the pipeline, more accurate delivery timing can be predicted. These awesome IoT benefits for the e-commerce supply chain ultimately result in enhanced customer satisfaction.

IoT sensors to Track Product Movement

GPS and RFID (Radio Frequency Identification) tags have now become household names for monitoring products, assets, and inventory at factories, warehouses, and retail environments. Today, advanced IoT sensors are improving the connectivity of products at retail and eCommerce warehouses by transmitting detailed product information.

IoT sensors streamline inventory management by automatically analyzing the type, quantity, expiry, and replenishment of products in real-time without human intervention.

Smarter Inventory Management

Every customer, while buying from an online store, hates to see that the requested item is not available. Well, the unavailability of products also makes a store lose valuable customer visits that are about to get converted. This is why ordering products before they go empty is crucial for any mobile commerce store. This is exactly where IoT technologies like RFID tagging, connected billing systems, and automated inventory systems can help.

These technologies not only reduce human errors to a minimum, but they can also track product movement in real-time. Moreover, based upon previous purchases and sales history, they IoT led mobile commerce inventory system can also predict product movement more accurately. These smarter capabilities of connected inventory systems help to make timely orders for products before they are exhausted from the stock.

eCommerce Customer IoT Data Analytics with AI

IoT solutions for eCommerce are moving beyond warehouses and shipment facilities to augment end-consumer experience like never before. A large volume of data generated from IoT devices like fitness bands, smart security systems, and smart home appliances go underutilized.

For enhancing eCommerce experience, AI and IoT together generate in-depth consumer insights to alert decision-makers about customer needs, choices, and preferences.

For instance, low metabolism alerts from fitness trackers can trigger AI’s algorithms to suggest food items to boost the user’s metabolism. Also, the winter season’s onset can be mapped through smart home appliances to send customers personalized recommendations around winter jackets.

Up-Sell and Cross-Sell Strategies

The connected ecosystem has provided us a larger scope to do product searches. Since the product searches are now carried out across multiple device interfaces, including smart TVs, mobile devices, wearables, desktops, laptops, and smart home assistants like Amazon Alexa and Google Home, for mobile commerce companies discovering search patterns and user behavior became easier than ever before.

Based on precise data-driven insights on user behavior and searches, more accurate cross-sell and up-sell strategies can be initiated. This is Amazon on the basis of your previous searches, and the gadgets you use can make recommendations of products that you are more likely to buy.

Follow these points before implementing IoT in your eCommerce business

Research IoT use cases within your business model

Unlike technology trends such as network and telecom connectivity, the IoT use cases and strategies can vary dramatically by industry. 

The type of IoT sensors, device protocols and analytics are different in industries such as healthcare, manufacturing and oil and gas. While there are several types of IoT solutions that have horizontal applicability, such as network security and energy management, vertical technology leaders should also be looking for solutions that support their specific industry.

While all successful technology selection and implementation strategies can benefit from understanding the use case, it’s critical to understand what you are trying to accomplish before selecting IoT solutions. That’s why you need to

Select IoT use cases based on KPIs

Within any organization, there are numerous ways that the IoT can be used. To get started, you should define a set of tightly scoped use cases that support your key business goal, such as improving shipping efficiency by 5 percent and minimizing inventory shortages to boost retail sales. The technology team also needs to define a process for capturing and prioritizing future requests based on KPIs.

Update your security strategies with IoT in mind

Minimizing threats from unsecured devices is a priority for every company but IoT can increase those threats. Over three quarters of the companies Lopez Research interviewed listed security as a key inhibitor to IoT deployments. 

Businesses must evaluate security at the device and application level. Security should be present at all layers of the IT stack from the device, through the network, to the cloud. In many cases, a connected device doesn’t have embedded encryption or the computing power to run security software. 

In this case, you should look at securing data at the LAN, the WAN gateway and application level. Unified endpoint management and identity strategies must also be updated with IoT in mind.

If you have difficulty in understanding this, you can always consult DevOps experts and probably work with them in securing your system if needed.


It is quite important to note that technology has played a bigger role than ever in how the world has coped with the pandemic, and IoT systems are an essential part of that. But their biggest role is just about to begin as the world tries new ways to go back to work safely.

Over the next six to 12 months the world will enter a “new normal” phase, in which aspects of how we live and work will be reengineered with the help of devices and technology to minimize the threat from the disease. This change will not only change our attitude towards the technology but also bring radical changes to our behavior. 

As businesses are ready to invest in various protective measures, they need to observe and think carefully about what conditions and restrictions this new normal is about to bring. You should be able to manage your budget and business plan between immediate and longer-term investment.

At this point in time, the only constant is the belief that digitalization will be a strong force in returning to normal, and that IoT in many forms will play an important role. The ones who are to lead this phase successfully are going to conquer the market for years to come.

Be the one by consulting Archisys, your best technology partner!

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