Retailers seeking to capitalise on IoT (Internet of Things) technologies will spend an estimated $2.5 billion in hardware and installation costs by 2020, nearly a fourfold increase over this year’s estimated $670 million spend, according to Juniper Research. A new report from Juniper suggests that leading retailers using the IoT to generate an ‘ecosystem’ are poised to gain market advantage and truly capitalise on the opportunity. Linking the hardware elements of RFID tags, beacons and connected consumer electronics, such as wearables, with software analytics promises in-depth business insight and an enhanced customer experience, says Juniper.
“Retailers such as Zara and Target are already taking advantage of the benefits offered by RFID asset tracking” noted author Steffen Sorrell. “Meanwhile the beacon industry is expanding rapidly; used as a method to provide consumers with contextually relevant information in conjunction with their smartphone or wearable will enormously enhance the in-store experience.”
A report from RSR, meanwhile, finds that 80 percent of the 138 retailers surveyed say that IoT will have a transformative impact on business operations and consumer products. Top retail opportunities associated with IoT include maintaining inventory accuracy in stores; closer engagement with consumers through their Internet-connected devices (watches, phones, etc.); maintaining system-wide inventory visibility; and new services offered to consumers through monitoring their Internet-connected devices.
Internal departments expected to benefit the most from IoT capabilities include customer servicve, inventory management and customer engagement. Retailers also expect IoT will provide insight into operational challenges, such as providing visibility into customers’ physical shopping behaviors, inventory accuracy and speed of fulfillment to meet consumer demand.
Despite such opportunities, however, there are some key concerns about privacy and security. Juniper Research found, with the number of connected units within the IoT forecast to reach 38.5 billion in 2020, attitudes and methods with regards to cybersecurity will have to undergo fundamental change. Where today’s security is principally focussed on access prevention, the IoT security model will require robust means of identifying inevitable network breaches. Should suspicious activity be detected, parts of the network can then be ‘shut off’ in similar fashion to marine vessel bulkheads to prevent attack spread.
