Retailers remain stuck when it comes to Internet of Things (IoT) initiatives, according to “The Internet of Things in Retail: Getting Beyond the Hype.”
The second annual report from RSR shows that retailers are increasingly aware of the impact of IoT on customer engagement and competitive advantage. Yet, they are still hesitant to invest in cutting edge technologies due to operational challenges and a lack of supporting infrastructure.
The good news is 70% of retailers acknowledge that IoT will drastically change the way they do business in the next three years. This is in stark contrast to the mere 74% who have deployed one or less sensor-based projects in the past 12 months.
“2017 is a critical year for IoT in retail. Early adopters are seeing good ROI from pilot programs around connected inventory due to the needs of inventory understanding to support omnichannel commerce,” Oliver Guy, global industry director of retail for Software AG.
“Many brands, however, are falling behind by not making the leap to deployment and customers won’t wait much longer,” he said. “They are starving for fresh offerings that enhance their shopping experience. For retailers, the biggest ROI comes when these technologies are connected together.”
For some, IoT is viewed as a “Swiss Army Knife” technology — a tool that can be applied and benefit many parts of the business. IoT has the potential to automate and optimize a vast number of retail processes, most importantly, productivity.
Respondents stated that there is much to gain from deploying IoT, with almost 70% say they see the potential impact on inventory management and store operations. Meanwhile, 68% believe IoT will boost profits by deepening customer engagement through monetizing data, the study reported.
Advanced technologies from machine learning, augmented reality, drones, 3-D printing, blockchain and other emerging solutions will play into this evolving IoT ecosystem in creative and exciting ways. The combination of these and other technologies will also enable rapid innovation and value creation for those retailers who can imagine the possibilities, the study reported.
“The IoT has the potential to create business value that goes far beyond operational cost savings, indeed it can become the foundation for crafting new ‘smart’ services that can significantly enhance a customer’s journey,” Guy said. “However, the IoT ecosystem comprises many hundreds of new players offering one or two parts of the IoT puzzle, which can muddy the waters for retailers. What is apparent is that no single vendor in the IoT ecosystem can do it all.”