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Why & How IoT in Ecommerce is Revolutionizing the Industry

These days almost everything is connected to the internet. All of our smart devices make up the Internet of Things (IoT)-a network of physical objects communicating data online.

Ecommerce is one of the many industries that the Internet of Things has revolutionized. Read on to learn why and how IoT in ecommerce is completely changing the industry for the better!

What is the Internet of Things?

The Internet of Things (IoT) includes any device or object that can connect to a public or private internet network to share data. Typically it refers to everyday objects or appliances that used to be ‘dumb' but are now internet-enabled.

The newest devices blend IoT with AI to apply this data to improve the customer experience.

For example, tech-savvy consumers would rather have a wireless smart speaker (Alexa, Google Home, etc.) than plug one into their computer or TV. Because they are part of IoT, smart speakers can play any music online and connect to other apps like your notes and calendar. 

IoT devices are constantly generating data. Having multiple datasets from a range of devices means that analytics are more precise, so businesses can meet consumers' needs even better.

If you integrate these analytics with AI, then it gets even better. You could have smart speakers that can recommend music based on a user's listening habits and create customized playlists like Spotify's iconic yearly "Wrapped" feature.

smart device 

Keeping data safe

Just a quick note on data security before we get into specific applications of IoT in the ecommerce industry. Keeping your customer and company data secure is the foundation of making IoT work for you.

The main criticism of using customer data in ecommerce is an issue of privacy. This AuditBoard privacy vs security comparison explains that privacy concerns how much of their data a customer wants to give to a company. Security means that any data they do give the company can't be stolen or leaked. 

Before applying IoT to any aspect of your ecommerce business, it is essential to have a strong data security protocol. Customers must also agree to a data privacy policy before they use your service.

Types of IoT Devices

There are two main categories of IoT devices: consumer and commercial. Every internet-connected device has a unique identifier to make it recognizable to the rest of the IoT network.

Consumer devices include voice assistants and smart home appliances-everything from refrigerators to lights and heating controls.

But the Internet of Things has an even bigger impact outside the home. Many businesses, particularly ecommerce, rely on IoT devices to manage international business.

The commercial sector of IoT covers warehouse, in-store and back-office operations. Cloud technology like the Dialpad small business phone system or shared file management software makes the everyday admin of ecommerce run much more smoothly.

How is IoT Revolutionizing the Ecommerce Industry?

It's hard to underestimate the impact of IoT on ecommerce. (If you are new to ecommerce you may want to read this guide on how to sell online). We've broken these changes down into four main sectors: personalization, warehousing and inventory, and deliveries.

Personalization and analytics

The applications of IoT in ecommerce go hand-in-hand with customer data. This data, shared through the Internet of Things, can be used to personalize the customer's ecommerce experience.

Today's consumers expect a personalized ecommerce experience-it's the standard rather than a unique feature.

In fact, 62% of consumers say a brand will "lose their loyalty" if they don't offer personalization, up from 45% in 2021.


Warehousing and inventory

IoT has enabled companies to sell perishable goods online, which used to be impossible without a physical store. Smart shelves in warehouses keep heat, light, and humidity conditions at just the right level for products like groceries, flowers, or medical supplies.

Once a product is removed from a smart shelf, the shelf can communicate to the inventory management system that it needs to order more stock.

This combination of internet-enabled warehouse and inventory infrastructure reduces waste and generates data that can help you improve in the future.

Warehousing and inventory management are some of the most surprising uses of IoT, but they make a massive difference to your ecommerce business.


Delivery is the final step of the ecommerce journey. IoT made it possible to track deliveries in real-time using sensors on the delivery trucks and update the customer on their order's location.

Data generated from deliveries can tell you the average time your company takes to deliver an order. So you can give more accurate delivery times to your customers, and they end up happier!

AI-blended navigation systems with IoT can even optimize delivery routes based on live traffic data.

What Are the Benefits of IoT for Customers?

The Internet of Things offers customers a more immersive, personalized ecommerce experience. You may also wish to look into other current top technologies in e-commerce.

Every search and purchase gives the company a better understanding of who they are as consumers. All the contact points in the ecommerce sales funnel, from advert to landing page to fulfillment, are tailored to that customer's needs.



In this article, we've talked about ways the IoT in ecommerce is revolutionizing the industry.

Here are the most significant ways that the Internet of Things is improving ecommerce:

  • Personalizing customer experiences based on data analytics.
  • Optimizing warehouse conditions (especially for perishable goods).
  • Automating inventory management.
  • Tracking deliveries in real time.

Set your business up for ecommerce success in 2023 with IoT! And don't forget to share this article with your network if you found it useful!



Grace Lau - Director of Growth Content, Dialpad

Grace Lau 

Grace Lau is the Director of Growth Content at Dialpad, an AI-powered cloud communication platform for better and easier team collaboration. She has over 10 years of experience in content writing and strategy. Currently, she is responsible for leading branded and editorial content strategies, partnering with SEO and Ops teams to build and nurture content like this call center and BPO guide by Dialpad. Grace has also written for other domains such as Ironhack and Jostle. Here is her LinkedIn.

Published Thursday, January 19, 2023 8:22 AM by David Marshall
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