The global IoT in retail market is expected to grow at a CAGR of around 19.8% from 2021 to 2028 and expected to reach the market value of around US$ 40.2 Bn by 2028.
The internet of things (IoT) in retail enables store managers to identify new ways to connect with customers, create a shot and direct customer journey, improve the process of product maintenance, and establish long-term relationships with first-time shoppers.
IoT: boon for retailers in supply chain
IoT enables retailers to drive supply chain innovation. Retailers are using IoT sensors to track goods throughout the supply chain. IoT in retail is providing new opportunities for businesses to cut costs and better serve customers. Tracking systems, such as IoT, provide valuable data such as location, temperature, humidity, shocks, and tilt, as well as quality control and tracking. Logistics is already benefiting from lucrative business opportunities provided by IoT. IoT potential for supply chain management accounts for 74% of those implemented initiatives, such as sensor-based logistics, which shows a revenue increase. Furthermore, the average supply chain contributor to a company's bottom line increased from 4% to 8.5 % in a year, with the industry seeing supply chain revenue contribution on order of 10%.
IoT enabled systems will be a game changer for the retail industry
According to a report published by the European Journal of Marketing and Economics, there will be between 25 billion and 50 billion connected devices by 2025. Furthermore, it is predicted that customers will capture 90% of IoT benefits, impacting US$ 11 trillion by 2025. As a result, IoT has been identified as the next big thing in the retail industry, and it is regarded as one of the most important areas for IoT applications, influencing three major areas. Customer experience, supply chain, and new channels and revenue systems are all part of this. The most promising applications for IoT technology in the retail sector are IoT shelf availability, automated checkouts, smart customer relationship management, and real-time in-store promotions.
COVID-19 impact on the global IoT in retail market
The COVID-19 pandemic's lockdown and social distancing measures have changed consumer behavior, hastening the adoption of smart technologies such as IoT and robot assistance by retailers worldwide. It reveals that 81% of retailers polled intend to offer mobile ordering as a fulfillment option by 2021. In line with customers' shifting priorities toward online storefronts, 83% and 89% of retailers stated that robot assistance and real-time store IoT platforms will be critical to their operations in the coming years. The pandemic has demonstrated this to be true, as click-and-collect demand has increased, necessitating the need for store associates to enable contactless transactions via mobile computers and tablets. Up to 51% of retail executives have reported that they have begun or plan to begin upgrading their returns management technologies in the coming years. Meanwhile, 83% of retailers currently use or plan to use automated inventory verification systems to improve real-time inventory accuracy within the next year.
The global IoT in retail market is segmented as solution, service, and technology. Based on solution, the market is classified into hardware and software. By service, the market is bifurcated into professional services and managed services. Based on technology, the market is segregated as Bluetooth low energy, near field communication, zigbee, and others
According to solution, the hardware segment fosters a significant share of the global IoT in retail market. IoT ecosystems are made up of web-enabled smart devices that use embedded systems, such as processors, sensors, and communication hardware, to collect, send, and act on data collected from the environment. Apart from that, hardware-assisted security has emerged as a promising alternative to software-only defence. Hardware-based methods can collect micro-architectural information and leverage hardware modules to analyze current software-level threats and vulnerabilities. Such factors drive the expansion of global IoT in the retail market.
According to technology, the near field communication (NFC) segment accounts for the majority of revenue in the global IoT in retail market. The integration of IoT for consumers and retailers is facilitated by NFC. NFC provides an intuitive way for consumers to interact with IoT-connected objects by simply tapping a smart phone to an object, allowing the user to connect on a personal level. Furthermore, according to a report released by the NFC Forum, NFC technology makes it easier and more convenient for consumers all over the world to simplify transactions, exchange digital content, and connect electronic devices with a single touch. Globally, NFC technology is supported by network operators, IT and services companies, and financial services organizations. Such factors fuel segmental growth, thereby contributing to the global IoT in retail market growth.
North America dominates; Asia Pacific to record fastest growing CAGR for the IoT in retail market
North America dominates the IoT in retail market because every retail sector, from clothing to electronics, is keeping up with changing consumer expectations. Indeed, 5G and internet of things (IoT) technologies are already a key factor in delivering speed and connectivity for innovative new retail applications that elevate customer experience while alerting retailers to valuable insights that drive better decision making and ROI in this region. Apart from that, physical stores in the United States had been struggling for years not only to increase foot traffic but also to adopt newer technologies such as self-service kiosks, digital signage, and contactless payments. However, with the onset of the pandemic, retailers were placed on a list of non-essential businesses and faced a serious reckoning. The time had come for digital adoption and change. However, technology continued to advance in the United States in 2020. The introduction of 5G will undoubtedly usher in a new era of consumer personalization, engagement, and enhancement.
Asia Pacific, on the other hand, is expected to have the fastest growing CAGR for IoT in the retail market. Spending is high in key application areas such as WiFi-based analytics, proximity marketing, augmented panels and signage, navigational services, checkout and orderings, dynamic pricing augmented panels and signage, and so on. As Asia Pacific has seen a chronic labour shortage in some countries, the proliferation of end-to-end retail IoT solutions, massive IoT investments by e-commerce behemoths, and the scaling of cashless payment systems have influenced retailers to take the first step in terms of IoT solution adoption.
The prominent players of the global IoT in retail market involve Cisco Systems Inc., Arm Ltd., International Business Machines Corporation (IBM), Intel Corporation, Losant IoT, PTC Inc., RetailNext, Inc., and among others.
Market By Solution
Market By Service
Market By Technology
Bluetooth low energy
Near field communication
IoT in retail market is expected to reach a market value of around US$ 40.2 Bn by 2028.
The IoT in retail market is expected to grow at a CAGR of around 19.8% from 2021-2028.
Based on service, professional services segment is the leading segment in the overall market.
Rising adoption of digitization is one of the prominent factors that drive the demand for IoT in retail market.
Cisco Systems Inc., Arm Ltd., International Business Machines Corporation (IBM), Intel Corporation, Losant IoT, PTC Inc., RetailNext, Inc., and among others.
North America is anticipated to grab the highest market share in the regional market
Asia Pacific is expected to be the fastest growing market in the forthcoming years