Last year we decided that Internet of Things was worth a research report. Full disclosure, we had no idea what to expect. Were retailers even thinking about IoT as a viable source of differentiation for their businesses, or was general consensus going to be that IoT techs were still too far off? Were connected consumer appliances like dishwashers and refrigerators as much value as retailers could yet see?

What we found surprised us. Not only did they acknowledge the opportunity to see a more accurate picture of inventory availability across the enterprise, they also – quite unexpectedly – showed a great deal of enthusiasm for offering consumers new services by monitoring internet-connected devices inside and outside of the store. But underneath that enthusiasm we saw an underlying practicality: in the long run, IoT holds tremendous opportunity to help with the operational challenges retailers already have within their current systems.

How has that changed in the past 12 months? The following are some of the highlights of this year’s just-released report, our second ever on the Internet of Things in retail:

• When asked retailers to prioritize internal operational challenges that are causing them to look towards IoT, retailers responded by highlighting three general areas of principal focus: inventory visibility and accuracy, interacting with digitally enabled consumers in the physical store, and making the physical store more effective for consumers. We examine these in detail in theBusiness Challenges section of the report.
• And while retailers are unanimous in their desire for a closer level of engagement with consumers via their internet-connected mobile devices, what is far more interesting is the particular emphasis retailers place based on the products that they sell. Some vast differences emerge between what Fashion & Apparel retailers covet and what their FMCG and General Merchandise-based peers are looking to do.
• Despite retailers’ enthusiastic nature, when pressed for why they haven’t done more, the answers remain clear: they don’t believe their infrastructure can support bleeding-edge technologies, executive leadership doesn’t grasp the possibilities (and therefore isn’t pushing for such initiatives) – and even if they were – retailers’ IT teams don’t have the necessary bandwidth to tackle new challenges.
• And while retailers place tremendous faith in the future value of the Internet of Things – that does not necessarily translate into investment today. In the Technology Enablers section of the full report we see the exact technologies that are gaining early interest, and as expected: retailers whose sales are already outpacing their competitors’ are much further into the sales funnel.

As always, based on our data, we also offer several in-depth and pragmatic suggestions on how retailers should proceed with any IoT endeavors they have planned in the Bootstrap Recommendations portion of report, which is titled The Internet Of Things In Retail: Getting Beyond The Hype. It is available for everyone to read by following this link.