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Rise in retail asset connectivity to IOT platforms

Kgaogelo Letsebe
By Kgaogelo Letsebe, Portals journalist
Johannesburg, 22 Mar 2017
New research shows that retailers will connect 12.5 billion business assets to IOT platforms by 2021.
New research shows that retailers will connect 12.5 billion business assets to IOT platforms by 2021.

New data from Juniper Research has found that retailers will connect 12.5 billion business assets, such as products, digital signs and bluetooth beacons, to IOT platforms by 2021. This figure is expected to rise from 2.7 billion in 2016, representing a 350% increase.

The research titled IOT in Retail: Strategies for Customer Experience, Engagement & Optimisation 2017-2021, claims that 'next-gen' processes, such as personalised retail, could be achieved by integrating enterprise software and emerging technologies, with data from connected IOT assets. It predicted that RFID (radio-frequency identification), will re-emerge as the industry's 'killer app' becoming the key factor in the IOT retail ecosystem. RFID tags, used to identify and locate retail assets in real-time, are now at a low enough price point for mass deployment and integrate well with new IOT systems and analytics.

Juniper advised that each retailer's approach to the IOT should differ depending on their main channel focus. It argued that physical retail spaces still have many benefits, not least in terms of being able to avoid the sterility of online shopping.

The research and analytical services firm segmented its vision for IOT applications in retail into three categories: customer behaviour, customer experience and supply chain.

Customer behaviour knowledge would enable players in the industry to not only develop their products accordingly, but also to be able to effectively target offers and services to maximise sales. "Juniper believes that one of the most significant developments in this segment concern bluetooth beacons, where beacons may also be used to track consumers' movements in the store, enabling retailers to determine dwell time by the amount of time a user's smartphone is registered to a nearby beacon," said the report.

The second segment would be customer experience, which would ensure that the consumer's experience is satisfactory to the point where he/she will return to the store based on their prior shopping experience. Emerging and immature technologies will play a key role here in improving customer experience.

"Digital signage/electronic shelf label enables the retailer to apply dynamic pricing schemes to products. Here, pricing can be set initially according to traditional cyclic evaluation; this provides a starting point for adaptive pricing based on data fed into an analytics backend system. The backbone supporting this operation will be via retailers' ability to integrate data from multiple sources such as consumer smartphones instore and real-time supply chain information," the report explains.

"Innovative retailers such as Rebecca Minkoff have combined RFID with smart mirrors," explained research author Steffen Sorrell. "Integrating these systems allows real-time information to improve the store experience and bridge physical and virtual worlds - in this case, the concept drove a 200% increase in sales."

Although, the research highlighted that many of the initiatives aimed at improving the customer experience will rely on greater insight into the supply chain, alongside the ability to react quickly to near real-time information. "Supply chain efficiencies should be a key goal for retailers in terms of reducing cost, waste and improving relationships with suppliers," concluded the report.

Juniper further forecast that software spend for enterprise resource planning systems to integrate this data would reach $11.3 billion annually in 2021, from $1.5 billion in 2017.

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