Digital interconnectivity for retailers is on the way — from shelves that make inventory reports to devices that detect an approaching shopper.
And the market for retail-centric products to perform these technical feats is expected to be worth more than $94 billion in less than 10 years, according to a new report from Grand View Research.
Commonly referred to as The Internet of Things, the interconnection of devices that can communicate with each other, tracking and retrieving data, may sound straight out of the movie “1984,” but it’s part of retail reality.
The Grand View report predicted an explosion of spending in the area, up from about $13.5 billion in 2015, with retailers increasingly adding more technology and connecting with consumers via their own wearable tech.
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“IoT allows [retailers] to determine purchase history and customer profile by synchronizing with wearable devices,” the research firm said.
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Data from wearable devices, such as a shopper’s smartwatch or an employee’s ID, will increasingly be used by retailers to better understand what’s happening in their businesses, the report said. Many of these devices are already in place, such as the ubiquitous smartphone, which serve as a touch point for “beacons,” or sensors, in stores. This connection can be used to send discount codes and other offers to shoppers.
The increased use of IoT-enabled devices could also see retailers “revolutionize” supply and delivery operations by creating “smart shelves” that detect low inventory. The implantation of radio-frequency identification sensors, which can be smaller than a grain of rice, will also see retailers able to track individual product from at lest creation to delivery.
“Optimizing and automating supply chain is one of the key factors for the adoption of connected technology among retailers,” Grand View said.
Although the IoT in retail is expected to spread aggressively, the research group noted that “fragmented technology standards and increasing security concerns” are likely to “hamper” IoT growth to a degree.
And security concerns abound. By growing the connectivity of everything, the hacking of a single cell phone could reveal much more than even a hacker expected.
A January Ponemon Institute survey of about 600 IT professionals on their view of mobile and IoT security found that only 30 percent of those who work with and develop the technology feel it’s being adequately protected from a security breach.
The IT workers also admitted that some of the technology contains “vulnerable code,” mainly caused by pressure to release the technology, and that the testing of mobile and IoT apps is “ad hoc, if done at all.” The survey found that only 20 percent of IoT technology undergoes testing before release.