Retailers Risk Falling Behind if They Don't Plan Now for Internet of Things, Report Claims
By: IDC Retail Insights August 15, 2014
Retailers must plan now for the IoT because the technology positively impacts top- and bottom-line business performance by improving omnichannel operations and enabling personalized and contextualized interaction with consumers, says a report from IDC Retail Insights.
Understanding the technology landscape and defining a road map for IoT implementation requires uncommonly long-range planning, but is rewarded with reduced long-term implementation costs and total cost of ownership, according to Business Strategy: Developing an IoT Technology Strategy.
The convergence of cloud, mobile, big data/analytics, and sensors has created an opportunity for retailers to engage consumers and employees in radically new ways, the report says. Within five years consumers will expect that retailers engage them with personalized and contextualized interactions. In the same time frame, if the retailer hasn't figured out how to improve real-time inventory accuracy to 98 percent or better, they will struggle to close the online or click-and-collect sale.
"Retailers can improve operations, reduce risk and loss, and wow the consumer with IoT-enabled capabilities,” says Leslie Hand, research director at IDC Retail Insights. “Now is the time to establish a strategy and develop a road map for IoT. A well thought out plan will guide the reduced cost of ownership of IoT technologies and enable continued agility and innovation."
Another report, Business Strategy: Understanding the IoT Use Cases For Retail, discusses many of the most common use cases being implemented, including product tracking/traceability, interactive consumer engagement and operations, mobile payments, asset management, and fleet and yard management.
The IoT journey, rich in opportunities, is also full of challenges – the biggest of which is enabling tactical applications sometimes in isolation of a plan for an architecture designed for IoT. The technology requires an event-oriented paradigm, which includes listening, bi-directional messaging, information distribution, and communications over a variety of networks. The architecture for IoT stretches the limits of retail legacy networks.