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State of Retail Internet of Things -IDC Report

The IoT is already playing a role in consumer location-based interactions and in retail supply chain

IDC Retail Insights announced the availability of a new report, Business Strategy: Developing IoT Use Cases for Retail (Doc #RI250069), which evaluates the current and future state of Internet of Things (IoT) technology in retail.

According to the new report, some IoT technologies have matured and others are still being nurtured, but the use cases are well defined.

Cloud- and mobile-based solutions improve return on investment (ROI), reducing the barriers to implementation and speeding adoption. In fact, almost 10% of all IoT investment in 2013 was made by retailers, and by 2017, annual investments will surpass $466 million (see Worldwide Internet of Things Spending by Vertical Market 2014–2017 Forecast, IDC #246384).

According to Leslie Hand, Research Director, Supply Chain, Merchandising and Demand Management Strategies and author of the new report, "Consumer demand for convenience, product availability, and personalized and contextualized interactions will drive retailers to adopt multiple IoT technologies. This beckons a fresh evaluation of IoT opportunities in retail, as the challenges diminish and the consumer demand for interactive, engaging, and convenient retail experience trump any hesitance to invest in IoT."

Several common retail use cases and examples are described within the report. Other topics discussed in the report include:

  • Current and future adoption trends in the five primary areas of IoT investment in retail: product tracking/traceability, interactive consumer engagement and operations, mobile payments, asset management, and fleet and yard management
  • How to develop a strategy for deploying the foundational components of IoT
  • How to understand how the use cases intersect and maximize the return on investments

Retailers need to establish the foundation by which to meet immediate omni-channel retail demands while planning for continual innovation. The IoT is already playing a role in consumer location-based interactions and in retail supply chain and asset management applications. IoT connects the digital and physical experience of products, companies, and our world to improve through data-driven analytics our ability to find, buy, and utilize things optimally.

A few of the major takeaways for retailers include the following:

  • Investing in technologies that make a marked difference to the consumer makes sense. Consumers want to be connected and engaged if it saves them money or time. Privacy and security are potential adoption inhibitors but consumers will increasingly develop a need for instrumented and intelligent interactions.
  • Enabling improved inventory management, sample management, loss prevention, on-shelf availability, and asset management with RFID suddenly makes sense, as doing this is consequential to consumers' ability to find and buy what they want at their convenience.
  • Retailers are discovering the value in leveraging sensors associated with product, assets, and ID badges as a result.

IDC Retail Insights recommends that retailers interested in engaging the omni-channel consumer with consistent personalized and increasingly contextualized physical and digital interactions should consider how to build the architecture for IoT that will continue to adapt to consumer interaction patterns and needs. Meanwhile, technology vendors and service providers have an opportunity to help retail enterprises define and understand the IoT opportunities and the path forward. Systems integrators and professional services firms can play a pivotal role in shaping use cases and revealing the benefits from investing in an IoT solution. IDC Retail Insights sees deep industry vertical expertise brought by these ecosystem players as a critical success factor in many IoT cases.

For additional information about this report or to arrange a one-on-one briefing with Leslie Hand please contact Sarah Murray at 781-378-2674 or [email protected]. Reports are available to qualified members of the media. For information on purchasing reports, contact [email protected]; reporters should email [email protected].

About IDC Retail Insights
IDC Retail Insights assists retail businesses and IT leaders, as well as the suppliers who serve them, in making more effective technology decisions by providing accurate, timely, and insightful fact-based research and consulting services. Staffed by senior analysts with decades of industry experience, our global research analyzes and advises on business and technology issues facing the retail industry. International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology market. IDC is a subsidiary of IDG, the world's leading technology, media, research, and events company. For more information, please visit, email [email protected], or call 508-935-4490. Visit the IDC Retail Insights Community at

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