Retailers and IoT: Running in Place? Opportunities and Challenges Abound

Retailers and IoT: Running in Place?
Opportunities and Challenges Abound

·  70 percent of retailers acknowledge that IoT
will drastically change the way they do business in the next three years —
only 44% percent say they need to find new ways to connect with consumers using
IoT

·  More than half of retailers say their existing
infrastructure is not capable of supporting IoT and 47 percent say business
leaders don’t understand IoT’s benefits

Singapore, March 21, 2017 – A recent benchmark report from Retail
Systems Research (RSR), underwritten by Software
AG, found that retailers remain stuck when it comes to Internet of
Things (IoT) initiatives. This is the second annual report from RSR, “The
Internet of Things in Retail: Getting Beyond the Hype”, and it shows that
retailers are increasingly aware of the impact of IoT on customer engagement
and competitive advantage. Yet, they are still hesitant to invest in cutting
edge technologies due to operational challenges and a lack of supporting
infrastructure.

Anneliese Schulz, Vice
President for Software AG Asia, said: “2017 is a critical year for IoT in
retail domain in Asia. Early adopters are seeing good ROI from pilot programs
around connected inventory due to the needs of inventory understanding to
support omni-channel commerce. Many brands, however, are falling behind by not
making the leap to deployment and customers won’t wait much longer. They are
starving for fresh offerings that enhance their shopping experience. For
retailers, the biggest ROI comes when these technologies are connected
together.”

Broken up into four categories, business challenges, opportunities,
organizational inhibitors and technology enablers, the benchmark report
highlights several key findings which underscore an increasingly tumultuous
relationship between retailers and IoT deployments.

According to the RSR research, 70 percent of retailers acknowledge that IoT
will drastically change the way they do business in the next three years. This
is in stark contrast to the mere 74 percent who have deployed one or less
sensor-based projects in the past 12 months. For some, IoT is viewed as a
“Swiss Army Knife” technology — a tool that can be applied and benefit many
parts of the business. IoT has the potential to automate and optimize a vast
number of retail processes, most importantly, productivity. Respondents stated
that there is much to gain from deploying IoT. Almost 70 percent say they see
the potential impact on inventory management and store operations, and 68
percent believe IoT will boost profits by deepening customer engagement through
monetizing data.

Data is one of the major benefits of IoT and there will be masses of data about
consumer habits to be collected and analyzed. Amazon has been doing this for
years, making recommendations based on previous behavior.

Schulz noted: “The IoT has the potential to create business value that goes far
beyond operational cost savings, indeed it can become the foundation for
crafting new ‘smart’ services that can significantly enhance a customer’s
journey. However, the IoT ecosystem comprises many hundreds of new players
offering one or two parts of the IoT puzzle, which can muddy the waters for
retailers. What is apparent is that no single vendor in the IoT ecosystem
can do it all.”

Advanced technologies from machine learning, augmented reality, drones, 3-D
printing, blockchain and much more will play into this evolving IoT ecosystem
in creative and exciting ways. The combination of these and other technologies
will enable rapid innovation and value creation for those retailers who can
imagine the possibilities.

Schulz continued: “It’s clear brands grasp the need for and potential
application of innovative technologies like IoT, but there is a growing
disconnect between this understanding and the call to action. The findings of
the RSR Research not only provide some context for this challenge – with 51%
stating that their infrastructure cannot support the Internet of Things and 47%
saying business leaders don’t understand the benefits of IoT – but also provide
a roadmap for IT to overcome these obstacles so they don’t miss out on a huge
opportunity.”

The report can be downloaded here: https://info.softwareag.com/rsr-report-retail-internet-of-things-iot-reloaded-2016.html