IoT is Changing the Face of E-Commerce

Clare Bittourna

February 3, 2017

9 min read

The term IoT (Internet of Things) was first coined in 1999 by technologist Kevin Ashton and defines a network that connects both people and the objects around them.

Over time, IoT has morphed into a network of smart objects that work together in obtaining and analyzing data and independently performing actions. This is as a result of machine-to-machine communication technology.

The ability of connecting machines and devices to one another through the IoT helps industries become more efficient and productive. The connectivity comes from being able to capture and transmit data. Additionally, the creation of inexpensive sensors not only enable the rise of IoT but accelerate the growth by fueling the number of connected devices. For example, Gimbal sells beacons that range from $5 to $30.


Overall the growth of things connected to the internet range from 10 billion in 2003 to 40-50 billion predicted by the year 2020. That statistic equates to five connected devices per person.

Currently, industries that are benefiting from IoT include automotive, banking, marine, property, energy, aerospace, healthcare, manufacturing and food. With all of these industries utilizing IoT, it is predicted that $6 trillion will be spent in the IoT sector over the next five years.

Retail environments will also be significantly impacted by the IoT movement. According to Statista, retail environments are the fourth largest to have an economic impact of the IoT in 2025 at a high estimate of 1,160 billion U.S. dollars.


Source: Statista

Although with said growth there is still an exorbitant amount of potential, specifically in the e-commerce and retail industry. E-commerce is researched to be the most untapped opportunity for IoT, since only 9% of e-Commerce utilize IoT. In order to stay with the trend, agencies like Codal who offer user experience design services need to look into implementing IoT in the e-commerce platforms they are designing and developing.


Overall there are many ways that IoT can be utilized in e-commerce. The potential for new ways to utilize IoT is currently being explored by web development agencies, and some UX design agencies alike. Presently, the three main areas that IoT is generally being used is in inventory, logistic systems, and payment.


IoT provides the ability to have real-time data of where goods are, whether that be in warehouses, being distributed or at the end location.

One example of how this is implemented is smart shelves. Smart shelves automatically monitor inventory in stores or warehouses and notifies the manager when a particular item is running low. These connected devices accomplish the traditional managerial task in a way that improves operating efficiency and thus saves money.




Each connected device represents a new channel that data can flow in both directions. In one way, consumers navigate an e-commerce site in which generates behavior-defining and trackable data. In turn, marketers and UX design agencies working on the e-commerce site can utilize this information and data in order to create a more better and personalized web experience.

The intelligent logistic systems can include a range of tools such as management intelligent upgrades, an array of technology that are embedded in the logistics chain to improve efficiency, transport intelligent upgrades, and product safety upgrades.


Both payment convenience and payment security are important to ensure a rapid development of e-commerce. It is through the use of IoT that payment security and convenience are improved. For example, the ability to instantly order an item without needing to input payment information greatly improves a user’s convenience.


Amazon, the powerhouse of e-commerce, was one of the first e-commerce sites to fully take advantage of IoT. They released a programmable Dash button for IoT referred to as “The Amazon Web Service Internet of Things.” This allows developers to code the button’s logic in the cloud to configure button clicks to count or track items, call or alert someone, start or stop something, order services or provide feedback.

For the user, the Amazon Dash button is a Wi-Fi connected device that lets a user reorder products by simply pushing a button. This eliminates the need to log onto the site and find the product every time the user wants to reorder.


Source: Amazon

Some other prominent companies that have witnessed success implementing IoT are Pinterest with its buyable pins, Volvo with its connected car that sensus the park and pay, and HP with its smart office and providing instant ink.


As the Internet of Things rapidly grows into various industries, development of technology also needs to rapidly improve. An interesting example of how IoT is being utilized in a new e-commerce market is in the grocery industry.

Reshaping the common product retailing, e-commerce is shifting to live and fresh products. With new IoT technology, the traditional supply chain from farm to consumer for produce has been greatly shortened.

Since a prominent issue in fruit e-commerce is the monitoring and controlling of freshness of the fruit that is in process, the need to implement IoT as a quality check is huge. Overall the new IoT framework for this process incorporates intelligent farming, vehicle cooling and sensing systems, and the sensing and tracking to notify the customer of delivery; all steps in which utilize IoT.


The trend of IoT, specifically in e-commerce, is one that is just beginning. Retailers and UX design companies need to research innovative ways to incorporate IoT to its current e-commerce platform.

Implementing such technology will help in increasing productivity, efficiency, and the overall user experience.

Our Insights

No items found.

Tell Us About Your Project

Thank you! We will reach out shortly!
Oops! Something went wrong while submitting the form.
let's talk