IoT: The Way Forward?
As the year draws to a close, the Internet of Things may be well poised to capture “buzzword(s) of the year” honors. I’m willing to bet that “IoT” got more clicks in 2018 than even “Where will Amazon put its second headquarters?” But here’s the thing: the IoT thing is actually deserving of all the conversation.
In our latest benchmark, the 4th we’ve done on the topic, we find that retailers are further along the learning curve than we expected - and are starting to view the very real possibilities these new technologies afford through a more realistic lens.
Winners, in particular, revealed a far more comprehensive understanding that these are just tools – and that tools, alone, are never enough. It’s using them properly that matters. But consider this: when we asked them to identify which functional areas of their business stand to benefit the most, their response is, “everywhere” (Figure 1).
Figure 1: Winners Just Getting Warmed Up
Source: RSR Research, October 2018
Retail Winners aren’t being shy: they believe IoT has the power to help them reshape their stores, and virtually everything that supports them. And while we examine which of those specific activities hold the most promise in the Technology Enablers section of the full report, any time 9 out of 10 Retail Winners prescribes “a lot of value” to a data point it is worthy of attention. In fact, with the exception of marketing functions, Winners’ view of IoT’s potential benefits outstrips their competitors’ across the entire enterprise. How can something so new, and with so few case-studies to-date, have generated so much excitement?
The answer likely lies in the Internet of Things’ promise to generate a “digital twin.” As IoT devices become more common, their ability to generate a digital representation of things going on in the physical world holds vast allure for retailers. The concept suggests that things currently difficult to monitor in the physical world will soon be easily monitored, measured, and improved. And for retailers struggling to still know what they don’t know – in their stores, in their merchandising endeavors, and in their supply chains – the ability to gain visibility into the physical environment via IoT is potentially game-changing. This potential extends to virtually every corner of their business, and while retailers’ eagerness is palpable, we still suggest that they don’t get too caught up in the “hype cycle”. There’s still a long road between “here” and “there”. Still, the possibilities are exciting.
We hope you take some time to read the full report.