In our first ever study on the Internet of Things (IoT), we recently found that retailers whose sales are already outperforming their peers have placed inordinate focus on new IoT technologies – much more so than their average and underperforming peers. In fact, some of the most startling outcome of our research was retailers’ strong interest in using IoT not for operations or maintenance, but for connecting with consumers. Retailers report that IoT, for them, is more about driving differentiation and revenue than about saving money or cutting costs.

But what stands in their way of reaping these benefits, both internally across the enterprise and with consumers?

Despite their optimism, retailers face significant internal challenges before they’ll be able to leverage any of the opportunities they perceive from the Internet of Things. Indeed, it’s hard to take advantage of a new technology when 53% of retailers say their business leadership doesn’t even understand what it is (Figure).

Figure: A Serious Hill To Climb

Source: RSR Research, August 2015

In fact, our retail respondents seem genuinely confronted by the prospect of their internal roadblocks; not only do their leaders not understand IoT’s benefits, but nearly one out of two predict infrastructure issues, maturity issues, capital issues, and an unidentified business case for forward progress.

However, as is often the case, the best performers see their challenges differently. Winners have moved more past questions of their skills to manage analytics (only 24%, not pictured, compared to others’ 38%), as well as their IT team’s capacity for new projects. Instead, our Retail Winner respondents tell us that, far and away, their greatest challenge will be getting the funding required to take on new projects. For them, IoT is not an issue ofif, but when. They’ll worry about their team’s capacity and their ensuing skill level once the money begins to flow.