The Internet of Things (IoT) is transforming retail and the majority of retailers now consider connected technology to be essential for success, according to a new report from Microsoft.
From the supply chain to automated checkout and smart shelves, connected devices are creating unprecedented visibility into retail businesses. IoT can also help brick-and-mortar stores create customer experiences that rival that of online stores; for instance, customers can be sent alerts about discounts relevant to them when they get close to a store, and stores can use IoT to keep track of inventory and increase efficiency.
So what’s next? The IoT Signals report found that retailers are planning IoT projects that help customers get in and out quickly, which increases revenue. Areas like automated checkout and optimising inventory and layout are key, and survey respondents rank store analytics (57%) and supply chain optimisation and inventory tracking (48%) as the top two IoT use cases.
Retailers that leverage artificial intelligence (AI) say they are able to use their IoT solutions more quickly and more fully. AI is a core component of IoT for almost half (44%) of retail IoT decision makers, and these businesses are more likely to use it for layout optimisation, digital signage, smart shelving and in-store contextualised marketing (including beacons).
Nearly nine in ten (87%) of those surveyed view IoT as critical to their business success. Looking forward, respondents expect the biggest benefits they will see from IoT adoption to include increased efficiency (69%), cost savings (64%), increased competitive advantage (62%) and new revenue streams (56%).
When it comes to making the most of IoT, the biggest barriers to success for retailers include budget, consumer privacy concerns, compliance/regulatory challenges and lack of technical knowledge. Despite these challenges, however, 82% of US and 73% of European respondents anticipate greater IoT implementation in the future.
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