IoT-Enabled Deliveries: Identify a Problem and Fix it

IoT applications for fulfillment and logistics could revolutionize retail delivery, or they could create more problems than they solve.

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Shipping truck with boxes in background
Illustration: © IoT For All

Internet of Things (IoT) technologies have the potential to transform processes at every point in the retail lifecycle, from before a customer initiates a transaction to long after it’s complete. When we talk about IoT applications, we often focus the discussion on customer interactions. However, fulfillment and logistics may be the area in which IoT-enabled tools could play the largest role.

The growth of IoT in the delivery industry is a natural product of the broader trend in technological development. If managed well, IoT tools and infrastructure could revolutionize delivery and logistics. At the same time, if poorly managed, it could end up creating more problems than it resolves.

Where IoT-Enabled Deliveries Are Headed

IoT adoption presents considerable opportunities to make delivery of goods a faster and more accountable process.

First, IoT tools could enable businesses to impose greater transparency. It’s possible to account for goods at every point in their journey to the consumer as well as to monitor quality, security and conditions during that process. This offers a two-fold benefit: merchants save on lost or damaged merchandise and build consumer trust in their processes owing to the insight that IoT tools provide.

In addition, merchants gain greater logistic insights through IoT. This renders a clearer understanding of their processes and enables data-driven decision-making.

Merchants can also obtain a new level of insight with the massive cache of new, detailed data that IoT-enabled shipping provides. It has not been possible before to get as granular with everything from the temperature at which items are shipped, to how much they’re jostled around and how long it takes to reach the customer’s doorstep. IoT technology could even be deployed to identify ways to shorten the customer’s wait time through route optimization.

It’s also easier to spot trends and to identify new solutions to old problems. For chargebacks, a considerable number result from problems that could be cleared up if merchants only had access to the insights that IoT technologies are now making possible. If customers claim an item arrives damaged—or never arrives at all—one can identify the exact point in the process when things went wrong.

Obstacles to Widespread Adoption

As wonderful as it sounds, the problem is, we’re not quite there yet.

Real-time tracking tools create accountability and trust, and they could be helpful in preventing chargebacks. We have the technology, but it’s not used effectively enough by merchants today. According to a report published last year by DHL and IBM, data is one of the most underutilized assets in the logistics industry. While AI tools have the power to leverage data, many businesses remain skeptical and bound to the way things have always been done.

It’s not to say skepticism is bad. Like any innovation, IoT technologies have the potential to be misused and abused.

We estimate that between 20 and 40 percent of all chargebacks are the product of merchant error. There are a lot of different issues that fall within that purview, including inadequate customer service to missteps during processing and fulfillment. One of the most common errors is improperly deployed technologies.

Poorly deployed IoT tools create vulnerabilities for merchants, leaving them susceptible from multiple angles. They might experience an uptick in fraud incidents tied to security liabilities generated by IoT-enabled tools. Alternately, merchants could unintentionally cause more problems in their supply chain and order fulfillment processes than they solve.

IoT Delivery Is a Balancing Act

There are risks associated with moving too fast towards IoT implementation. Weaknesses are found in the planning and deployment, not in the technology.

The underlying premise behind AI and IoT-enabled tools is sound. What we need to do in order to maximize them is to demystify the concept of IoT and push for better standards of how to utilize IoT-enabled tools to optimize delivery. It’s important to ask important questions about friction points in delivery and fulfillment processes and how they can be addressed.

We don’t deploy tools in search of a problem to fix. Instead, we do so to solve an identified problem. For example, if a merchant experiences a high volume of chargebacks because goods arrive at customers’ homes damaged or spoiled, using an IoT-enabled tool to track shipments can address the issue.

The Internet of Things plays an immense part in delivery and fulfillment. In determining how to deploy an IoT strategy, merchants need to ask the right questions to ensure progress.