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6 Applications of IoT in Ecommerce

  • Mallika Rangaiah
  • Jun 24, 2020
  • Updated on: Jun 23, 2021
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Suppose you wish to buy a new pair of Bluetooth earphones, which would be a more favorable approach? Take out time to visit the nearest electronic store or just resting on your couch, using the browser or sifting through your mobile app and having your order arrive on your doorstep in a few days?  The second option is gaining increasing popularity these days owing to the lesser amount of effort and exertion that it requires. 


We can't deny that the world of shopping is constantly revolutionizing and has shifted to more convenient platforms. Brick and mortar stores no longer hold the same indispensable power they did before, not with online shopping gaining rapid popularity. Ecommerce stores are now looking out for innovative and high-tech solutions to enhance customer loyalty, which is exactly where the Internet of Things (IoT) steps in. Retailers are deploying IoT-based solutions for sparking an everlasting interest among their customers. 



What is the Internet of Things (IoT)?


Briefly, the Internet of Things (IoT) is an ecosystem of smart devices that are capable of accessing the internet and interacting with each other.  IoT has revolutionized the eCommerce industry both externally i.e from the side of the consumers, as well as internally in case of processes such as logistics and management of inventory. 


The Internet of Things remains one of the trending topics, establishing its impact across all sectors be it from education to e-commerce. Interestingly, the commercial sector was one of the initial sectors that employed the approach of using intelligent devices for monitoring items. Let’s take the Coca-Cola vending machines as an example, which was one of the initial IoT devices. In 1982 some researchers at the Carnegie-Mellon University installed Coke vending machines with microswitches for reporting the stock of drinks left as well as for gauging their temperature. 



The Ecommerce Sector and IoT


The E-commerce sector has recently been encountering massive disruption in the context of technologies employed. As the erratic lifestyle of consumers revolutionizes and they rapidly develop a growing fondness for online shopping, the need for the companies involved to leverage the right technologies to please their customers becomes imperative, especially when it comes to IoT. The IoT-enabled devices interchange data among each other within an internet network that aids both the retail and the e-commerce firms in smoothly and efficiently executing their operations. 


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The advent of IoT devices like smart mirrors that enable users to be able to smoothly try out clothing virtually along with being equipped with the technology for aiding the users in re-purchasing products of their choice, has completely revolutionized the shopping approach of customers. The development of IoT applications has garnered massive popularity over the years. In this blog, we'll discuss how IoT plays an imperative role in the e-commerce industry.



6 Applications of IoT in Ecommerce


As E-commerce garners increasing recognition, the possibilities for IoT application in the sector become endless. Below are some of the applications of IoT in Ecommerce:


The image shows the applications of IoT in Ecommerce, namely, Inventory management, supply chain management, maintenance and warranty, smart homes, personalization and customer experience

Applications of IoT in Ecommerce


1. Inventory Management


The IoT sensors as well as RFID aka the Radio Frequency Identification tags have entirely shifted the approach with which inventory is arranged. These sensors and tags enable the learning of all crucial item information such as the type of product, its availability, its expiration date, without the necessity of any human involvement.


In the case of the customers, this allows them to check the availability of the product. While in the case of the business owners, it aids in the monitoring of the quantity as well as the quality of the item. For instance, sensors inspect to ensure if the warehouse temperature is less enough for perishable items and alerts the system in case this is not so.


The launch of smart shelves has propelled inventory management much further. These smart shelves inspect the number of items and can order them again when required to refrain from getting unavailable. They reduce the danger of human error as well as the necessary sum of working hours.



2. Supply Chain Management


IoT devices allow precise and detailed tracking of the item journey during Supply Chain Management. The IoT sensors and RFID tags aid business in staying updated over what is happening with the product, from its location, its speed, conditions, etc. It provides accurate arrival time and averts losses or wrong deliveries.


The devices also benefit customers, as they can keep track of where the product is and when it will arrive at their doorstep. 


It can also help in automating the shipping and delivery processes so there are no issues relating to missing shipments. Alongside these features, it also helps in overseeing features such as the vehicle speed and temperature. 


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One example is the e-commerce giant Amazon, which uses IoT installed robots for managing the picking, packing, and other required tasks that ensure product effectiveness. Amazon also incorporates the drone facility for picking up and delivering products. 



3. Maintenance and Warranty


The IoT technologies are effective tools for remote assessment of products and items as well as to predict their maintenance and analyze their performance. They facilitate businesses with additional data regarding how a product is adopted and also allow for anticipation and prevention of breakdowns.


In case the company is notified by the sensors of the substandard operating of a product, they can call the customer and alert the customer and offer to repair or replace it in advance to avoid any difficulties in the future. In case of a lost or stolen object, IoT helps to provide a notification to alert the user.


4. Smart Homes

The image shows some of the smart devices inside a smart home

Smart Homes


Remember Amazon’s dash buttons? Although now discontinued, these small buttons help in simplifying routine tasks and can be put anywhere in the home and programmed via mobile apps for performing actions. Their push-button device lets shoppers smoothly reorder routinely used products such as say, pet food, or coffee.


Yet another obvious component of IoT in smart homes are the voice assistants. The users can seek the support of these devices to order the items they need by commanding them with their voice, though they pose the issue of generalization.



5. Personalization


For all businesses, particularly when you consider Ecommerce, having maximum relevant knowledge about the customer enhances the personalized experience they can facilitate, which in turn enhances loyalty as well as growth in revenue. In such cases, the data derived from smart home devices become exceptionally effective.


For instance, if someone’s refrigerator is taking up too much energy, businesses can forward them ads of their environment-friendly models to lure them with the advantage of saving cost and energy. Smartphones are another excellent device that supports businesses in gaining detailed useful information about their customers.  


Insurance companies are employing IoT-powered smart devices such as GPS, as well as speed sensors for tracking discounts for vigilant drivers and greater rates for the ones who tend to exceed their speed. 



6. Customer Experience


IoT enables e-commerce businesses to smoothly set themselves apart from their rivals. Various companies are employing IoT for garnering insights regarding the various items that are gaining popularity on social media. This technology enables the retailers to facilitate a more inclusive shopping experience for their consumers with a greater degree of personalization results in the client satisfaction of clients and enhances their engagement.


IoT can smoothly aid in customized advertising as well as marketing for e-commerce companies to be able to easily focus on a specific group of customers. It can flawlessly detect the varying shopping patterns through search trends and online browsing which allows business businesses to sell targeted items to their various customers without much difficulty. 


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IoT also allows customizing of the services, products, and offers as per the preferences of the customers. As a large amount of information is made accessible for marketers regarding consumer behavior, it becomes easier to intrigue customers and even impacts their own buying decisions. 


Magento e-commerce development has introduced this approach for improving its way of serving customers. IoT also enhances the overall customer service that aids in notifying any issues prior to them being detected. This assists the businesses in expecting many conceivable complaints that result in prompt and simple resolution and a much more flawless and smooth customer experience.





As the usage of devices like sensors, actuators, and microchips increases, there’s no doubt about the impact of IoT escalating to a great degree in the coming years, as it seeps across the entire e-commerce business. With an increasing number of devices getting connected and garnering smart components, the possibilities of more data getting generated escalate, as do the chances of enhanced customer experiences.


As the devices penetrate across the industry there is scope for massive revenue growth coupled with improved inventory management and smooth tracking of thefts as well as losses, increasing the overall shopper intelligence.

Latest Comments

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