Retailers To Spend $2.5 Bn On IoT By 2020
The Internet of Things (IoT) revolution is already underway and by 2020, retailers will spend some $2.5 billion on IoT-related technologies such as Bluetooth-equipped beacons and radio frequency ID tags (RFID). This is about four times more than the $670 million expected to be spent this year.
This is according to a new Juniper Research study that suggests retailers may be on the cutting edge of the IoT’s impact on businesses. The study notes that by 2020, as much as 70 percent of purchased IoT hardware won’t be consumer-centric, with the segment driven by business IoT spending pushing the IoT opportunity worldwide to $300 billion.
The data also suggested that the expected explosion to 38.5 billion IoT-related connected devices in use worldwide by 2020 will prompt “fundamental changes” in cybersecurity to focus on quickly identifying the inevitable network breaches rather than concentrating on prevention.
According to Juniper Research, the IoT ‘represents the combination of devices and software systems, connected via the Internet, that produce, receive and analyse data. These systems must have the aim of transcending traditional siloed ecosystems of electronic information in order to improve quality of life, efficiency, create value and reduce cost.’
For retailers adopting beacons and RFID tags, the ability to leverage IoT technology to push relevant information to customers through their smartphones and other mobile devices, along with real-time asset tracking and pricing adjustments will provide substantial competitive advantages, the study said. Retailers such as Zara and Target are already taking advantage of the benefits offered by RFID asset tracking.
The beacon industry is also expanding rapidly, offering consumers with contextually relevant information in conjunction with their smartphone or wearable will enormously enhance the in-store experience.
Juniper stated that top retailers building an IoT ecosystem that links hardware such as beacons, RFID tags, wearables and smart consumer electronics devices with software analytics will position themselves to “gain market advantage and truly capitalize on the opportunity.”
“We’re still at an early stage for IoT, knowing what information to gather, and how to integrate that into back office systems remains a huge challenge. Additionally, interoperability hurdles owing to conflicting standards continues to slow progress. Nevertheless, there are signs that standards bodies and alliances are beginning to engage to overcome these hurdles,” says Steffen Sorrell, a Juniper research analyst.
The research notes that the IoT, therefore, is as effective as the sum of its parts. Mere connections create data; however, this does not become information until it is gathered, analyzed and understood. The analytics back-end systems of the IoT will therefore form the backbone of its long-term success.
The consumer segment (composed of the smart home, connected vehicles and digital healthcare), represents a high ARPU (average revenue per user) market segment. Meanwhile, the industrial sector (composed of retail, connected buildings and agriculture) will enable high ROI (return on investment) through IoT projects, owing to more efficient business processes, said the report.
The risks of IoT
Analysts also see much risk in the way IoT is managed. Forrester reveals that nearly 50% of respondents believe that privacy and security are currently the biggest concerns in the adoption of IoT. Andrew Rose, Principal Analyst at Forrester Research, mentions that there is an increased risk of data to be stolen or compromised when deploying emerging technologies such as IoT.
“Companies should have a security policy in place to identify targets, evolve key security control, add newer delivery mechanisms and review their security scenario frequently,” he writes in a blog.
However, security, licencing and other challenges cannot stop IoT from reaching the peak of its growth. By 2016, analysts believe over half of the companies globally will implement IoT-related technologies in some form or the other and in 2020 IoT rules may have to be rewritten.
- Diwali Brings Glitter To Consumer Electronics Sales
- Weekly Rewind: Top 10 Stories On CXOToday (Oct 9-13)
- IoT Knowledge Gaps Exist In Consumer Product Industry
- Ericsson Sees 5G Readiness On The Rise
- There's No Stopping The IoT Growth; Here's Why
- Intel Imparts AI Training To 9,500 Techies
- Weekly Rewind: Top 10 Stories On CXOToday (Oct 2-6)
- SAP Leonardo To Help Indian Firms With Digital Transformation
- Enterprises See Gap In IoT-ERP Integration: Study
- OTT Gaining Momentum Due To Faster Internet