Retailers Anticipate Substantial Changes Driven By IoT

By Christine Kern, contributing writer

Retailers believe big changes are coming in the next three years, driven by the Internet of Things (IoT), according to a new report from RSR Research. The Internet of Things In Retail: Great Expectations, sponsored by AT&T and supported by Software AG, contains analysis of the business drivers, opportunities, and organizational constraints surrounding retailers’ IoT strategies and offers baseline recommendations for navigating the future of IoT, particularly as retailers struggle to define their opportunities in this space.

The survey polled 138 qualified retailers, defining the IoT as “collections of networked sensors that impact operations,” distinguishing it from consumer-facing technologies such as smart appliances or home security systems. Two-thirds of respondents were neutral to outright optimistic regarding their preparedness to take on the IoT’s impact on their own operations. Almost three-quarters said they already have projects of some variety in progress.

The study also found that, despite this optimism, retailers face significant internal challenges before they will be ready to leverage the IoT, particularly since 53 percent reported that their business leadership isn’t even sure what IoT means.

Retailers are also keenly interested in both connecting with consumers via their personal Internet-enabled devices and offering new services to customers based on consumer-drive data from those devices. But these goals require a new data structure for businesses, providing another layer of challenge.

The study also found that IoT is about satisfying customers, not about moving product, with retailers rejecting challenges related to cost or margin in favor of those related to growth and specifically responding to consumer challenges that could hinder growth.

And despite the investment required to leverage the IoT, retailers believe it is worth it. The IoT is about supporting omni-channel opportunities, maintaining inventory accuracy in stores, bridging the physical/digital divide with consumers, and maintaining system-wide inventory visibility.

Ultimately, the report suggests, “Start with small, achievable goals, put a dedicated exploratory team together with realistic targets, and get to work …. Viewing a new technology as ‘too big’ to tackle or panicking about where to begin is a sure-fire way to become a late (and likely less-effective) attendee to the party.”