Retailers are aware of the impact of internet of things (IoT) on customer engagement and competitive advantage, yet, they are hesitant to invest in such technologies.
These retailers don't readily invest due to operational challenges and a lack of supporting infrastructure, according to a new report from Retail Systems Research (RSR), underwritten by Software AG.
Seventy percent of retailers acknowledge that IoT will drastically change the way they do business in the next three years.
About 70 percent say they see the potential impact of IoT on inventory management and store operations, while 68 percent believe IoT will boost profits by deepening customer engagement through monetising data.
"2017 is a critical year for IoT in the retail domain in Asia. Early adopters are seeing good return on investment (ROI) from pilot programsme around connected inventory due to the needs of inventory understanding to support omni-channel commerce," said Anneliese Schulz, Vice President for Software AG Asia. "Many brands, however, are falling behind by not making the leap to deployment, and customers won't wait much longer. They are starving for fresh offerings that enhance their shopping experience. For retailers, the biggest ROI comes when these technologies are connected together."
Analysing consumer habits
The report identifies data as one of the major benefits of IoT, and there is masses of data about consumer habits to be collected and analysed.
IoT can create business value that goes far beyond operational cost savings, and can become the foundation for crafting new 'smart' services for customers.
Looking forward, advanced technologies from machine learning, augmented reality, drones, 3D printing, blockchain and much more will play into this evolving IoT ecosystem in creative ways.
The combination of these and other technologies will enable rapid innovation and value creation for those retailers who are innovative.
"It's clear brands grasp the need for and potential application of innovative technologies like IoT, but there is a growing disconnect between this understanding and the call to action," added Schulz. "The findings of the RSR Research not only provide some context for this challenge — with 51 percent stating that their infrastructure cannot support the Internet of Things and 47 percent saying business leaders don't understand the benefits of IoT — but also provide a roadmap for IT to overcome these obstacles so they don't miss out on a huge opportunity."
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