IoT in Retail: Discover Top 9 Ways it is Reshaping the Industry

Internet of Things (IoT) in retail has moved from early-stage supply chain efficiencies to changing omnichannel strategies and customer experiences. Retailers are leveraging smart sensors, real-time analytics, and an ecosystem of connected devices to improve efficiencies and engagement. As these IoT technologies mature, the retail industry harnesses its full potential to dynamic, data-driven ecosystems that raise the stature of in-store and digital shopping experiences alike.

Why should you read this report?

• Gain in-depth insights into the top 9 IoT use cases in the retail sector
• Learn about three practical IoT in Retail use cases for each application
• Meet 9 innovative startups advancing these applications

Key Takeaways

1. Inventory Management
   • Use Cases:
     • Smart Shelves
     • Real-Time Inventory Tracking
     • Dynamic Pricing
   • Startup to Watch: VisionVal
2. Supply Chain Optimization
   • Use Cases:
     • Product Authenticity & Traceability
     • Cold Chain Monitoring
     • Automated Pallets for warehouse optimization
   • Startup to Watch: TransGenie
3. Customer Experience Management
   • Use Cases:
     • Smart Fitting Rooms
     • Personalized Product Recommendations
     • Smart Price Tags
   • Startup to Watch:  Bright.Blue
4. Security and Loss Prevention
   • Use Cases:
     • RFID-based Anti Theft Systems
     • Employee Access Control
     • Smart Surveillance Systems
   • Startup to Watch: Instaware
5. Energy Management
   • Use Cases:
     • HVAC Optimization
     • Smart Lighting
     • Energy Consumption Monitoring
   • Startup to Watch: Smart Energy Solutions
6. In-Store Navigation
   • Use Cases:
     • Beacon-based Navigation
     • Interactive Maps
     • Emergency Response Systems
   • Startup to Watch: Butlr
7. Automated Checkouts
   • Use Cases:
     • Self Checkout Kiosks
     • Smart Shopping Carts
     • RFID-enabled Checkouts
   • Startup to Watch: PayComplete
8. Mobile Payment Solutions
   • Use Cases:
     • Contactless Transactions
     • Biometric Payments
     • Location-based payments
   • Startup to Watch: Pi-xcels
9. Customer Monitoring
   • Use Cases:
     • Shopping Pattern Recognition
     • Product Interaction Tracking
     • Customer Feedback Systems
   • Startup to Watch:  Estro Tech Robotics

Overview: How is IoT Used in Retail?

IoT optimizes retail operations by gathering data from connected devices and automating inventory management, tracking products in real time, and monitoring supply chains. It enhances the customer experience with smart shelves and personalized promotions based on behavior. IoT also integrates with point-of-sale (POS) systems to streamline checkouts and reduce wait times.

The technology enables analysis of shopping patterns for better product placement and inventory management. Further, retailers leverage IoT to improve security with smart cameras and sensors. This prevents theft and ensures in-store safety to create a more efficient and customer-focused environment.

9 Top Applications of the Internet of Things in Retail [ 2025 & Beyond]

1. Inventory Management

Retail businesses utilize IoT to enhance demand forecasting accuracy and mitigate supply chain inefficiencies by providing real-time visibility into operations. By integrating IoT-enabled devices like RFID tags and connected sensors, retailers streamline warehouse operations and ensure timely inventory replenishment. These systems provide real-time data tracking of stock levels throughout the supply chain, from warehouses to sales floors. This data enables accurate demand prediction and prevents overstock and stockouts. This approach improves order fulfillment efficiency and minimizes the risk of lost sales due to inventory mismanagement.

3 Specific Use Cases of IoT in Inventory Management

• Smart Shelves: Use RFID tags and sensors to automatically monitor inventory levels in real time. They prevent stockouts by triggering automatic restocking alerts when products run low.
• Real-Time Inventory Tracking: Systems with IoT capabilities, such as GPS and RFID, offer constant inventory visibility throughout the supply chain. They tracks products from warehouse to shop to save time and improve inventory management.​
• Dynamic Pricing: Digital price tags instantly change prices according to supply, demand, and competition by analyzing real-time data such as inventory levels, customer demand, competitor pricing, and even market trends.

Startup to Watch: VisionVal

German startup VisionVal offers smart shelves and smart bays — AI and machine learning-based shelving solutions that utilize real-time automated product recognition. They use IoT-based load sensors, on-shelf electronics, and embedded software to accurately identify products and their locations without special labels or RFID tags. This simplifies operations and reduces costs. The shelves also track product movement in real time to detect when items are taken or returned to improve inventory management. VisionVal’s cloud-based AI/ML analytics thus continuously analyze shelf data to enhance accuracy, efficiency, and flexibility for businesses to optimize operations across vending machines and autonomous retail environments.

2. Supply Chain Optimization

The retail industry leverages IoT to track and monitor goods by collecting real-time data on location, temperature, and condition during transit. This enables real-time shipment tracking and ensures that goods reach their destinations at the right time and in proper condition. Companies like Amazon use IoT sensors on trucks and containers to measure road conditions to optimize routes and improve logistics performance. These IoT applications improve supply chain visibility and reduce operational costs for retail logistics.

3 Specific Use Cases of IoT in Supply Chain Optimization

• Product Authenticity & Traceability: IoT solutions trace goods through the supply chain to ensure authenticity and tackle counterfeiting. This is focused mainly on luxury goods or pharmaceuticals.
• Cold Chain Monitoring: Continuous monitoring of temperature, humidity, and ethylene levels around shipment allows companies to maintain the integrity of perishable goods like food and medicine. ​
• Automated Pallets for Warehouse Optimization: IoT-powered automated guided vehicles (AGVs) and smart pallets improve warehouse utilization and inventory management. ​

Startup to Watch: TransGenie

US-based startup TransGenie develops digital product passports to increase product traceability, sustainability, and regulatory compliance. It combines blockchain, IoT, and smart labels for creators and manufacturers to produce NFTs and digitized product data of physical assets. This offers full visibility into the lifecycle of products. By automating data collection, TransGenie also provides real-time sustainability reporting and supports the circular economy while reducing fraud and streamlining retail operations.

3. Customer Experience Management

The use of IoT in self-service kiosks represents an application for enhancing customer experience management, particularly for enabling contactless shopping. For example, Amazon Go utilizes RFID technology and AI-driven Q&A systems to assist customers with product selections. This reduces customer waiting time and improves satisfaction. Further, IoT-powered sensors and cameras monitor in-store traffic to provide customer footfall analysis.

This insight enables retailers to optimize store layouts and merchandising strategies. By understanding peak shopping hours, retailers effectively manage staffing while IoT-based energy management systems monitor lighting, temperature, and energy consumption. These features reduce operational costs for retail businesses while providing a better shopping environment for customers.

3 Specific Use Cases of IoT in Customer Experience Management

• Smart Fitting Rooms: Utilize RFID and smart mirrors to suggest alternative sizes, styles, or complementary products This enhances the shopping experience.
• Personalized Product Recommendations: IoT sensors gather data on customer preferences to offer personalized recommendations via digital signage or mobile apps. This boosts engagement and sales.
• Smart Price Tags: Electronic shelf labels (ESLs) provide real-time price updates and promotions based on customer data. Retailers use this data to streamline pricing, minimize errors, and implement dynamic pricing.

Startup to Watch: Bright.Blue

UK-based company Bright. Blue provides smart retail automation solutions by combining AI, IoT, and sensors to enhance vending and retail operations. The company’s technology offers user-centric machines that provide personalized experiences through features like digital promotions, gamification, and dynamic pricing. This enables real-time inventory monitoring, remote management, and advertising capabilities, thus turning vending machines into profitable ad networks. By optimizing customer interaction and operational efficiency, Bright. Blue enables retail businesses to drive new revenue streams and create engaging data-driven retail environments.

4. Security and Loss Prevention

IoT strengthens security and prevents loss through facial recognition technology, which matches facial biometrics with a pre-compiled list of offenders. Retailers use this technology to alert staff when a known threat enters the store and reduce theft incidents. Bluetooth-enabled loss prevention tags, enhanced by Bluetooth Direction Finding technology, further provide sub-meter accuracy in tracking merchandise. IoT devices also identify suspicious activity on a larger scale by leveraging AI-powered license plate recognition systems that monitor store perimeters and parking lots.

3 Specific Use Cases of IoT in Security and Loss Prevention

• RFID-based Anti-Theft Systems: Track product movements, monitor inventory in real-time, and alert employees when items leave the premises without authorization. This reduces theft and improves stock management
• Employee Access Control: IoT-driven biometric or RFID-based access systems manage employee movements in sensitive areas to reduce internal theft risks and enhance transparency.
• Smart Surveillance Systems:: Analyze in-store activities to provide real-time alerts for suspicious behavior to prevent organized retail crime and shoplifting.

Startup to Watch: Instaware

Tunisia-based startup Instaware makes smart surveillance and monitoring solutions that leverage artificial intelligence to analyze environments, detect objects, and filter alerts, ensuring responses only to significant events. Its system integrates algorithms and hardware to deliver rapid and highly accurate responses. The solution is designed to enhance security by automating preventive measures and offering scalable integration. This provides control and efficient protection for diverse monitoring needs.

5. Energy Management

Connected sensors provide real-time monitoring of temperature, humidity, and energy usage to optimize refrigeration performance and prevent energy waste. Further, automated fault detection and diagnostics apply predictive analytics on IoT-sourced data to identify energy inefficiencies. This enables retailers to minimize downtime and reduce maintenance costs. Energy benchmarking also allows retailers to compare their energy performance against industry standards using IoT-powered data analytics.

3 Specific Use Cases of IoT in Energy Management

• HVAC Optimization: Sensors measure temperature, humidity, and occupancy to automatically adjust HVAC systems. Walmart uses these systems to reduce energy costs based on real-time conditions..
• Smart Lighting:: Uses motion sensors and ambient light detectors to adjust brightness. This reduces energy consumption during non-peak hours.
• Energy Consumption Monitoring: IoT-based energy meters track real-time consumption across devices to provide insights and reduce unnecessary energy use.

Startup to Watch: Smart Energy Solutions

Oman-based startup Smart Energy Solutions provides intelligent IoT control systems for HVAC through its Eniscope Air IoT platform. The system integrates cloud control, real-time monitoring, and automated scheduling to optimize air conditioning performance, reducing energy consumption. Using load sensors, air quality monitoring, and asset-level control, the platform minimizes waste by adjusting operations based on occupancy and environmental conditions. By leveraging real-time data and automated controls, retailers can fine-tune their energy consumption to align with store occupancy and environmental conditions.

6. In-Store Navigation

Companies utilize IoT devices to streamline in-store navigation. This enhances the customer experience by overcoming the disorientation often experienced in large stores. For instance, AR-based navigation uses visual markers, such as posters or decals on floors or walls. Shoppers scan these markers to generate a precise route, with virtual signs and arrows guiding them to products or departments.

This approach blends physical shopping with digital convenience, allowing customers to find items faster. Further, Wi-Fi positioning systems leverage existing in-store networks to triangulate customer locations with high accuracy. This offers real-time directions and product location assistance without significant additional infrastructure. Together, these innovations reduce wasted shopping time and customer frustration.

3 Specific Use Cases of IoT in In-Store Navigation

• Beacon-based Navigation: IoT beacons communicate with customer smartphones for real-time guidance and personalized offers. This enhances navigation and delivers contextual promotions.
• Interactive Maps: Allows customers to find products quickly using real-time store data. They guide customers, reduce shopping time, and enhance the user experience.​
• Emergency Response Systems:: IoT-enabled systems integrate with emergency alerts to trigger automated emergency navigation to direct customers to safe exits during emergencies.

Startup to Watch: Butlr

US-based startup Butlr offers intelligent occupancy sensor technology that uses body heat and AI to anonymously detect people’s presence and movement in space. The company’s sensors provide real-time data on foot traffic and dwell times for businesses to adjust product placement and store designs. Moreover, Butlr integrates with building management systems (BMS) for retail companies to improve resource allocation, enhance marketing strategies, and reduce energy waste while boosting sales and cost efficiency. Butler also enables optimized layout planning for retail environments.

7. Automated Checkouts

Connected cameras and sensors automatically detect and recognize items to enable automated checkouts. For instance, Amazon Go’s “Just Walk Out” technology allows customers to pick items and leave the store while the system automatically charges their account – eliminating scanning or checkout lines. Another innovation involves IoT-powered item recognition scales, integrated into checkout systems to automatically detect, weigh, and identify products in real time. These smart scales streamline the checkout process therefore reducing human error and increasing transaction speed, which is essential in high-volume retail environments.

3 Specific Use Cases of IoT in Automated Checkouts

• Self Checkout Kiosks: Allow customers to scan and pay for items without cashier assistance and reduce wait times. This streamlines the checkout process.
• Smart Shopping Carts: Scan products as they are added for customers to check out directly through the cart. This reduces checkout lines and elevates convenience for shoppers​
• RFID-enabled Checkouts: Enable faster, contactless checkout by automatically scanning all items in a shopping cart. This reduces manual scanning and speeds up the payment process.

Startup to Watch: PayComplete

Netherland-based startup, PayComplete builds an IoT platform that streamlines cash management. The company’s platform centralizes cash handling with other transaction systems for real-time cash movement monitoring, orchestration, and reconciliation. PayComplete’s RetailConnect module enables PCI-compliant cash management with features like remote device monitoring, cash orchestration, and automated reconciliation. This way, PayComplete enhances efficiency and lowers operational risks by offering retail businesses visibility into cash transactions and improving cash-related decision-making.

8. Mobile Payment Solutions

IoT empowers retail mobile payment solutions to improve customer convenience and transaction security. IoT-powered mobile wallets (e.g., Apple Pay, Google Pay) use NFC (Near Field Communication) and QR codes to allow customers to make payments by simply tapping or scanning their smartphones at payment terminals. These payment systems also enhance security through encryption and biometric authentication. Additionally, IoT-driven smart checkout systems integrate real-time data from connected devices to streamline the payment process and cut down on transaction times in high-volume retail environments. Further, IoT-enabled voice-activated systems also offer a hands-free experience for customers.

3 Specific Use Cases of IoT in Mobile Payment Solutions

• Contactless Transactions: Near Field Communication (NFC) enables tap-and-go payments. This makes transactions faster and more secure.
• Biometric Payments: Fingerprints or facial recognition is utilized to authorize payments securely. Mastercard and Amazon Go utilize biometric IoT systems to authenticate payments.
• Location-based Payments: Geofencing and GPS trigger payments when customers are in specific locations. Location-based payments allow customers to pre-order and pay via mobile apps when near a store.

Startup to Watch: Pi-xcels

Singapore-based startup Pi-xcels offers patented NFC-powered digital receipt technology that provides an eco-friendly alternative to traditional paper receipts. It enables retailers to issue interactive digital receipts to shoppers’ smartphones without app downloads or contact details. Additionally, it integrates with popular POS terminals like Pax A920 and Ingenico Axium. In this way, Pi-xcels allows retail businesses to reduce waste, enhance loyalty programs, and improve the customer experience while promoting sustainability.

9. Customer Monitoring

Retail businesses use IoT-based occupancy data to gain insights into foot traffic patterns, identifying peak times and customer flow thereby optimizing in-store navigation. For instance, smart sensors detect the number of customers in certain areas for real-time occupancy monitoring. This allows retailers to efficiently adjust staffing levels and manage crowd flow efficiently.

Further, occupancy data analysis helps improve store layouts, optimize resources based on customer volume, and maximize energy efficiency by integrating with environmental systems. These systems monitor temperature, air quality, and lighting to enhance the shopping experience while reducing energy consumption. Additionally, AI and IoT-based security monitoring systems provide instant alerts against suspicious behaviors to reduce theft and improve overall store security.

3 Specific Use Cases of IoT in Customer Monitoring

• Shopping Pattern Recognition: In-store sensors track customer movements to identify popular areas and shopping behaviors. This data allows companies to optimize store layouts and product placement.
• Product Interaction Tracking: Smart shelves use RFID tags to monitor customer interactions with products – like how often items are picked up.
• Customer Feedback Systems: Connected devices collect real-time feedback through kiosks or mobile apps to enable immediate response to customer concerns. It also offers personalized promotions to improve customer engagement.

Startup to Watch: Estro Tech Robotics

Indian startup, Estro Tech Robotics develops RobAd, a dynamic in-store marketing device that combines AI, robotics, and IoT to enhance brand promotion in retail stores. It engages customers through light, sound, and motion to create interactive and emotional connections between brands and shoppers. This enables targeted advertisements and personalized product displays, which draw attention and increase engagement. By elevating the in-store experience, RobAd drives brand visibility and boosts sales.

Act Now to Take Advantage of Top IoT Technologies in Retail

Top investors like Techstars, Alchemist Accelerator, and Bosch Ventures support startups focusing on IoT applications in the retail industry. They provide crucial funding that drives innovation. This funding majorly spans seed, series A, and accelerator rounds. Whereas, the average funding per round stands at USD 10.3 million per round, supporting early-stage startups developing IoT-powered solutions advancing retail.

Take immediate action on the top emerging IoT-driven retail technologies to stay ahead in the industry. StartUs Insights empowers you to uncover hidden opportunities among 4.7 million startups and tech companies, alongside insights into 20,000 technologies and trends. Our AI-powered, real-time database provides unparalleled access to solutions that are not available elsewhere, ensuring you always lead in innovation.

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