My partner Brian Kilcourse wrote up SAP’s Analyst Base Camp last week. One of the things that stays with me most from that event is the company’s large bet on Internet of Things technologies in the coming year. It’s not a subtle; the tech giant is putting heavy focus on IoT in a great deal of its current retail messaging.

But what about retailers, themselves? Are they really ready for IoT?

When we conducted our first-ever IoT survey last summer we asked retailers about the business challenges causing them to look at IoT opportunities. We offered three categories of options: growth challenges, cost challenges, and margin challenges. Historically, IoT has been presented as a solution for cost challenges – in preventive maintenance scenarios, for example. However, retailers firmly rejected the challenges related to cost or margin in favor of the challenges related to growth – specifically, responding to consumer challenges that might hinder growth.

At the top of the list were very classic business challenges faced by retailers at least since the Great Recession: differentiating from the competition, and consumer price sensitivity. We found that the kinds of challenges retailers typically struggle with during omni-channel transformation fell low on the list, including understanding what consumers want in a customer experience, and consumer dissatisfaction caused by a lack of integration across selling channels. Also very low on the list were supply chain disruptions – a common theme used in some IoT use cases. For retailers, IoT is about satisfying customers, not about moving product.

By performance, respondents were united on the idea that IoT represents the best opportunity to create differentiation from competitors. After that, we find some significant differences.

Winning retailers are more challenged by the demand for speed and agility in their operations than their peers. They also express more concern over management impatience with growing levels of inventory, and the increasing gap between their corporate IT capabilities, and that of their customers.

Their peers, on the other hand, are more focused on consumer price sensitivity, their lack of cross-channel integration, and uncertainty about how consumers might want to engage. The focus on consumer price sensitivity has the potential to hold back lagging retailers’ investments in IoT, especially if they fear costs will have to be passed on to consumers. However, their focus on consumers has a significantly different flavor than the consumer focus RSR typically finds among Retail Winners.

Winners have been investing in understanding consumer behavior since the initial rise of omni-channel. They feel the imperative to understand what consumers want (thus their concern about falling behind in the consumer-retailer technology arms race). Others have not made these investments, historically choosing to focus on the operational side of omni-channel at the expense of customer understanding. Their focus on customer now reflects how little they know, rather than a more extreme focus on the customer in the first place.

Has any of this changed since last August? Are SAP’s impending IoT functionalities going to be something retailers are clamoring for – or something the tech giant will have to convince them holds value? We’re actually running a survey right now to find out, and if you’d like to share your point of view, the link is right here. We’ll be writing up the full results in September.