Retailers are enthusiastic about the Internet of Things, but is it all hyperbole or are they actually getting to grips with it?
In a recent webinar, Planet Retail said that adoption of IoT in retail is 18-24 months away.
Turning to RSR’s recent report, The Internet of Things in Retail: Getting Beyond the Hype, the analysts wanted to see how well retailers are progressing towards actually implementing IoT.
Their enthusiasm is undimmed, according to RSR; a full 70% of respondents strongly agree that the IoT will drastically change the way companies do business over the next three years – up from 42% in 2015.
But how many of them are actually using the IoT? According to RSR’s research only 15% of retail “winners” have mature, sensor-related projects and use them to drive differentiation. On a positive note, 41% say they have a comprehensive strategy for managing sensor-based capabilities and have already begun to implement that strategy.
So, is IoT ready for prime time in retail? My feeling is yes. When you look at what targets they are focused on you can see that they believe the impact on IoT is significant. Generally, the respondents who think the value will be internal - inventory management (69%) and improved store operations (69%) – are also keen to find opportunities related to the customer-facing side.
Respondents believe that customer engagement in stores offers a lot of value (68%) and that marketing communications – smart signage, mobile offers – will also provide value (58%).
RSR warns that the laggards in IoT are looking for a “Swiss Army Knife” of technology, capable of doing “a bunch of stuff.”
Another statistic that makes me think the IoT is almost ready for prime time in IoT is this: 63% of respondents believe that closer engagement with consumers through connected devices such as watches and phones will drive more sale and profits. This compares with 43% last year.
And 56% believe that inventory accuracy in stores will drive revenues, compared with 49% last year. Clearly customer engagement plus inventory equals greater sales.
So why haven’t more retailers done more in getting IoT ready? Retailers do not believe their existing infrastructure is capable of supporting IoT (51%) or that their business leaders don’t understand the benefits (47%). Technology barriers including a deluge of data from different sources, prioritizing projects and getting smart devices out into the field are also dragging retailers down.
“No one said this was going to be easy,” says the report, which recommends retailers stop “dilly dallying” and just get on with trying small scale implementations.
“The best way to gain an understanding of the possibilities of IoT is to experiment. Don’t be afraid to fail – but learn how to fail fast,” says RSR.
While people think that IoT means that much more data will be stored – this is not the case – Gartner believe that IoT will only lead to an increase of data center storage demand by 3% by 2020. The key therefore is to be able to collect the data and do something with it – in real time. For retailers this means IoT is a key tool to use when looking to exploit "The Retail Moment."
Retailers are not always early adopters when it comes to technology and applications of IoT are no exception – if RSR’s analysis is indicative, it will be the “Winners” who are first to capture the Retail Moment.