Retailers understand that there are some great benefits to be had from the Internet of Things (IoT), but there is a growing disconnect between this awareness and the call to action.
In retail analyst RSR’s recent report, The Internet of Things in Retail: Getting Beyond the Hype, 65% of retailers stated that there is much to gain from IoT, but 51% said their infrastructure cannot support it.
Their enthusiasm is undimmed, however, with a full 70% of respondents strongly agreeing that the IoT will drastically change the way companies do business over the next three years – up from 42% in 2015. Sadly, according to RSR’s research, only 15% of retail “winners” have mature, sensor-related projects and use them to drive differentiation.
There are many exciting new trends out there that digital laggards are missing out on. For example, electronic shelf-edge displays can be used to provide a personalized experience for shoppers. Connected kitchens are coming up fast, with shopping list devices, which allow you to dictate or scan your shopping list into them, as well as smart wine decanters and egg trays.
On a positive note, 41% say they have a comprehensive strategy for managing sensor-based capabilities and have already begun to implement that strategy. But, on the other hand, respondents said that 47% of their business leaders really don’t “get” the benefits of IoT.
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.
So why haven’t more retailers done more in getting IoT ready? On top of infrastructure issues and a lack of support/understanding from business leaders, there are technology barriers including a deluge of data from different sources, prioritizing projects and getting smart devices out into the field that are 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.
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” in IoT adoption who will be first to capture the Retail Moment. There may be a lot to learn, but the future gains are worth it.