6 Ways IoT Can Improve Customer Loyalty

E-commerce and brick-and-mortar retailers are no strangers to the Internet of Things. It is beneficial for tracking fleets and monitoring inventory. 

However, many don’t realize the extent of the business opportunities it can create. If they leverage it strategically, they can enhance their offerings’ value and drive customer loyalty, ultimately increasing sales revenue. 

How IoT Improves Customer Loyalty

1: Enables Location-Based Deals

IoT devices can provide real-time location updates through a constant internet connection. Beacons send Bluetooth signals to mobile devices, using triangulation to pinpoint a customer’s position indoors. Shoppers enabling location services and companion app notifications will receive marketing messages. 

Businesses can use this technology to send location-based marketing messages, encouraging engagement and customer loyalty. For example, if someone lingers in the electronics aisle looking at gaming consoles, the app can guide them to discounts on video games. 

IoT makes offering complementary promotions and recommendations simple. Cross-selling can improve customer satisfaction and provide more value, driving loyalty. It also creates more engagement opportunities, strengthening the consumer-brand relationship.

2: Personalizes Marketing Messages

IoT makes market research simple. Business owners can secure the most significant return on investment if they consider how, when, and where they advertise. 

Since internet-enabled devices provide a wealth of data on buying behaviors, location, and touch point preferences, they don’t have to rely on surveys or feedback forms. 

Companies do not need to become original equipment manufacturers to unlock these insights. Instead, they can integrate with wearable devices, smart home systems, or vehicle sensors. 

Imagine someone is driving when their IoT device registers that they are only a few blocks away from a specific store. The companion app then sends a push notification recommending deals based on their shopping history, incentivizing them to stop by. 

This level of personalization is well-timed and relevant, increasing the chance they choose that store over competitors. 

3: Makes Shopping More Convenient

Things like unexpectedly high shipping fees and lengthy checkout processes can cause potential buyers to reconsider their purchases. Many companies use psychological tricks to get around this bottleneck. The less time people have to think, the more likely they will make impulse purchases.

However, customers may see this tactic as deceitful, which will not inspire loyalty. IoT technology offers a better solution. Enabling voice commands allows consumers to purchase items on demand, removing friction from checkout.

4: Improves Inventory Management

Embedding internet-enabled sensors within store or warehouse shelves enables accurate weight tracking, helping companies monitor stock levels. This business strategy is sound, considering ineffective inventory management causes $1.1 trillion in losses globally. 

Updating stock in real-time improves ordering accuracy, minimizing stockouts. If a product runs out, stores can display when back-ordered items will become available. People armed with this information are more likely to return, causing brands to lose fewer shoppers to their competitors.

Retailers that provide a companion app can unlock even more data-driven insights. Having customers scan barcodes or add items to their in-app cart increases tracking accuracy. 

More importantly, it creates opportunities for cross-selling. For example, if someone adds lipstick to their cart, the app can recommend a matching lip liner. Small discounts can incentivize purchases, driving loyalty. 

Sam’s Club’s scan-and-go program is an excellent example of this technology. Its adoption rate increased by 50 percent from 2021 to 2024 as its features improved. People can select items, see personalized recommendations, and pay through the app, skipping the checkout line. 

5: Gamifies Loyalty Programs

Brands can gamify their loyalty programs with connected devices. Instead of offering progress toward a badge or prize only after a transaction, they can reward engagement. Using IoT-generated location, purchase, and behavioral data to craft unique experiences is a fun way to encourage loyalty.

6: Gives Customers More Information

Retailers are not the only ones that can benefit from IoT-generated insights. Providing granular data related to delivery estimates and shopping habits enhances convenience and value, encouraging people to become repeat customers. 

For instance, embedding internet-enabled sensors into fleets enables precise order monitoring. Around 43 percent of online shoppers agree real-time tracking would improve the delivery experience, proving it is an easy way to appeal to a broad range of demographics. 

Inspiring customer loyalty with precise order tracking is especially practical for those operating fully online. 

IoT functionality creates many opportunities to set brands apart from their competitors. Grocery stores can share where produce comes from, e-commerce apps can offer exclusive product insights and retailers can tell people how busy each aisle is.

Using IoT Technology to Improve Customer Loyalty 

IoT provides a wealth of consumer data that organizations can use to personalize experiences, improve convenience, and encourage engagement, ultimately driving retention. 

Unlike other similar solutions, it offers real-time insights and unparalleled connectivity. Strategic decision-makers can use it to maximize customer satisfaction and revenue.