Last week I heard a story on the radio about foreign hackers accessing US based consumers’ cellphones through the most unlikely of methods: via their smartphone-linked crock pots. I dug a little more, and according to this article in Motherboard, a glitch in the Android app to control Belkin-made IoT devices was absolutely enabling hackers to access users’ phone-based photographs, personal information, and possibly even track their whereabouts. Further proof we live in truly strange times.

But despite oddities such as this, retailers are genuinely enthusiastic for what the Internet of Things will do for their day to day business activities. Why haven’t they done more? Well, according to our latest research, it’s not due to security concerns over hacks of IoT devices that would open up their businesses to potential threats, but rather because they don’t believe their infrastructure can support bleeding-edge technologies. Furthermore, they say their 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. In short, retailers are just trying to hang on to what they’ve already got going.

There are some key differences in this data, however, that clue us in to how and why Retail Winners are poised to make a difference. True: the best performers are even more challenged by executive teams who have yet to fully wrap their heads around the benefits which IoT technologies afford. And they also perceive the capital required to leverage these technologies as still being too far-flung for their current day-in/day-out expenditures. With that said, though, Retail Winners are far less likely to say their infrastructure won’t be able to handle these technologies once their leadership starts to pay attention – and just as importantly: once the price point for IoT technologies starts to fall.

With the convergence of those two events not far off, the work Winners have put in to keep their existing systems current – and capable of handling the next generation of must-have technologies – is likely to soon pay dividends.

What You Sell Matters

The roadblocks retailers face aren’t simply limited to cost and a lack of top-down demand, however. A raft of impediments currently stand in retailers’ way. In some sense Fashion & Apparel retailers exist in an inverse world from that of those selling Fast Moving Consumer Goods and General Merchandise. For instance, while Fashion retailers have all but abandoned marrying IoT data to predictive analytics (for now, at least), they are far more challenged simply to triage which projects they do want to tackle. The challenge of predicting next season’s merchandise is still much too precious to their core business to entrust such tasks to new demand signals and signal generators. In fact, as our recent merchandising research points out, for Fashion & Apparel retailers, just trusting the predictive analytics tools they’ve already purchased is disruptive enough; the merchant prince is still alive and well in this segment of retail, and IoT’s place in such an environment will likely face a difficult road to acceptance in the coming years.

Fashion & Apparel retailers are, however, much more interested in pushing smart devices out on to the selling floor, and therefore want to get over that hurdle as quickly as they can. They perceive IoT as a clever way to set themselves apart and, no doubt: to differentiate their store offering.

GM and FMCG retailers, by way of comparison, embrace the idea of using technologies around the edge to feed back to their predictive analytics tools. As a result, it is one of the top barriers they’d like to clear out of the way. For them, any opportunity to hone in on the routine patterns that currently exist in their shoppers’ behaviors represents a key chance for relevancy. But alas, they still have much work to do if they are to tie promising new IoT technologies to their tired, stagnant systems. The world of small margins – and the systems they are forced to squeak by on – is never without its challenges.

The only thing all retailers truly agree on is that the amount of data coming at them – in near real time – is overwhelming.

We invite you to read our latest report on the topic, The Internet Of Things In Retail: Getting Beyond The Hype. And in the meantime, if you’re going to use a crockpot, maybe consider turning it on the old-fashioned way.