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Retailers seeking to capitalize on Internet of Things (IoT) technologies will spend an estimated $2.5 billion in hardware and installation costs, nearly a fourfold increase over this year’s estimated $670 million in spending, according to a Juniper Research report.
The research, The Internet of Things: Consumer, Industrial & Public Services 2015-2020, found that leading retailers using the IoT to generate an ecosystem are poised to gain market advantage and fully capitalize on the opportunity.
“Essentially, application of IoT devices and systems in retail will enable improved customer experience, resulting in higher loyalty and greater insight into and control over products in the supply chain,” Nitin Bhas, head of research at Juniper, told eWEEK. “Combined, the resultant benefits will equate to less waste, and therefore lower costs.”
The report noted the hardware spending figure includes Bluetooth Beacons and radio frequency ID (RFID) tags. In the first instance, Bluetooth beacons enable visibility over footfall as well as the ability to push relevant information to consumers’ smartphones.
Meanwhile, RFID aids in real-time asset tracking, reduced labor costs and even dynamic pricing according to stock levels and online pricing.
Linking the hardware elements of RFID tags, beacons and connected consumer electronics, such as wearables, with software analytics could provide in-depth business insight and an enhanced customer experience.
With diverse business models and aims of IoT projects, such as service revenue, spending and cost savings taken into account, Juniper forecasts the IoT opportunity to approach $300 billion annually in 2020.
“Retailers are increasingly encouraged to leverage consumers’ mobile devices as a means by which to deliver location-based marketing, based on historical movements and preferences in the mobile arena,” Bhas said. “For retail, the IoT brings with it the concept of near real-time information–and the ability to leverage that–whereby strategy and connections to the supply chain have previously been built upon historical data.”
However, with the number of connected units within Juniper’s IoT forecast to reach 38.5 billion in 2020, attitudes and methods with regards to cyber security will have to undergo fundamental change.
“Concerns over cyber-security and data protection are effectively shared across both customers as well as service providers, where the former stands to lose intellectual property or privacy, the latter stands to lose the customer, or worse, with unquestionable damage to revenues,” Bhas explained.
He said where today’s security is principally focused on access prevention, the IoT security model will require robust means of identifying inevitable network breaches.
For example, should suspicious activity be detected, parts of the network can then be shut off in similar fashion to marine vessel bulkheads to prevent attack spread.