The retail landscape is changing rapidly, with IoT (Internet of Things) playing a critical role in delivering smarter, more responsive shopping experiences. We've seen early IoT technologies like RFID tags and POS integrations mass adopted across retail spaces, and newer, more sophisticated ones like augmented reality shopping experiences in a handful of stores.

IoT-powered digital signage sits somewhere in the middle, being incredibly powerful and easy to set up. This makes it a low hanging fruit for retail businesses looking for an IoT edge. Let's look at some of these use cases and how they can optimize operations.

But first...

What is IoT in retail?

In retail, IoT is to the network of linked sensors, devices, and software that interact to collect and exchange customer data. IoT offers retailers valuable insights and helps them make data-driven decisions that influence growth and profitability.

Here’s a brief look at how IoT benefits the retail industry:

• Improved inventory management: Real-time stock tracking can help reduce stockouts and optimize supply chains.
• Enhanced customer engagement: Personalized promotions and interactive displays create a more engaging shopping experience.
• Better operational efficiency: Automated systems can help with tasks like price updates, checkout, and staff deployment, reducing labor costs.
• Increased retail foot traffic: Integrating IoT devices like digital screens into storefronts and window displays can captivate passersby with tailored promotions and data-driven product highlights.

The global IoT in retail market is projected to grow from $14.5 billion in 2020 to $35.5 billion by 2025, with an impressive CAGR of 19.6% (Allied Market Research) and this isn't just limited to backend operations. The use of IoT in the retail industry extends to customer-facing elements like personalized promotions and wait-time management, and that’s where digital signage really shines. 

A retail digital signage solution is a cost-effective and easy to use avenue for many retail businesses to incorporate IoT into their operations and reap the fruits. 

Let’s look at some ways retail stores are using digital signage and IoT.

Digital signage applications for IoT in retail

1. Smart Price Tags

Digital price tags and smart shelves can be game-changers for large grocery stores and high-volume retailers. We’ve seen these adopted in the form of e-ink displays in Woolworth and Walmart recently announced plans to replace its printed price labels with screens.

These digital price tags allow stores to update product prices in real time, adjusting based on demand, inventory, or special promotions. The biggest benefit of this would be your store’s ability to reflect pricing changes instantly, improving accuracy and reducing manual labor.

2. Adaptive promotions

With digital signage, retailers can tailor promotions based on seasonal events, stock levels, or fluctuations in customer demand. For example, your store can push a flash sale or promotion on your signage depending on local weather or events. 

Connectivity allows these you to update these screens instantly and remotely, ensuring that promotions are always relevant and timely.

IoT solutions here can allow for:

• Seasonal adjustments: Displaying tailored offers based on holidays or weather changes.
• Stock level adaptations: As stock levels decline, in-store screens can notify shoppers to grab what’s left before the store runs out quickly.
• Demand responsiveness: Slow-selling items can be discounted and put on sale to increase demand.

Read More: How to Make More Retail Store Sales

3. Self-checkout kiosks

Self-checkout kiosks have been around for a while, and have quickly won the hearts of shoppers - 66% of people would choose a self service kiosk over a staffed checkout, according to Pymnts.

None of this is hard to understand as self checkouts can help reduce wait times and improve the in-store experience.

Retailers can also use POS displays at self checkouts to serve relevant promos on products customers just bought. For example, promo on something something.

4. Wayfinding directions

A 2024 Consumer Pulse Survey found that 74% of consumers walk away from purchases because they feel overwhelmed in the retail environment. This experience can be heightened during peak shopping hours. 

Retail IoT can lessen this effect by providing some direction and guidance for customers. Digital screens can display wayfinding directions that adjust based on real-time data. These could be strategically placed screens or self service kiosks that customers can walk up to and pull directions on-demand.

For example, during peak shopping times, screens can direct customers to available self-checkouts, reducing wait times and general frustration. Another helpful use is adjusting pathways based on store layout changes.

Read more: All about Retail Wayfinding

5. Augmented reality shopping experiences

Retailers like Sephora are using Augmented Reality (AR) with IoT to revolutionize the try-on experience. 

In their Times Square location, Makeup by Mario launched an AR mirror that incorporates some of the best parts of IoT. The station can scan a customer’s face and let them virtually experiment with various makeup products before purchasing. 

This IoT-driven solution not only enhances the customer experience by letting them experience products before buying, it also reduces the need for physical testers, which is particularly great for hygiene and inventory management.

Smaller retail stores can launch AR shopping experiences on a simpler scale using QR codes. Strategically placed screens can display QR codes that lead customers to additional product information, user testimonials, and more. This can allow customers to experience more of the product and nudge them closer to a sale.

6. Inventory management and tracking

Retail companies can use IoT devices to support real-time inventory tracking. For example, you can display inventory levels on screens visible to customers and let them know what's available and what’s about to be out.

Smarttek reports that 59% of companies find IoT valuable for inventory management, and these use cases aren’t limited to digital signage alone. Some other integrations could include:

• Smart shelves with IoT sensors that can send alerts when items are low
• RFID tags for tracking inventory along the supply chain as it moves from warehouse to store shelf
• IoT integrated temperature and humidity sensors to monitor perishable items like dairy or produce and keep them fresh

7. Wait time management and reduction

IoT-powered digital signage is instrumental in managing wait times within retail environments. We’ve already covered how self-service kiosks can speed up checkout. Strategically placed screens can also help reduce perceived wait times by directing customers to open checkout counters, highlighting alternative service points, or even displaying engaging content like UGC social media content or information on loyalty programs.

Not only does this create a smoother flow of customers, it also enhances the overall shopping experience.

Looking to the future of IoT in retail

From improving the customer experience to streamlining stock management, IoT technology is changing many factors of business operations. As the technology improves, we may see more versions of Amazon's controversial "Just Walk Out" stores, or bigger AI integrations.

Digital signage currently (and will likely continue to) play a massive role in the IoT wave, empowering businesses to engage and communicate with customers in new, exciting ways. From reactive marketing strategies and personalization to better internal communication with warehouse staff and logistics workers, digital signage is already changing the world of retail.

As the leading provider of digital signage, ScreenCloud’s solutions offer efficient, cost effective and easy-to-use solutions for businesses looking to leverage the power of digital signage.

Start a 14-day free trial to find out how digital signage can help your retail business embrace this emerging and growing technology.