The outlook for retailers have changed dramatically over the last few decades. This sector of the economy has shifted from a cash-driven, supply-driven industry to one that is very digitally-focused. The Internet has transformed retail. Where competition is most intense, innovation and market disruption are ongoing.
Retail markets are now potentially unlimited, where previously they may have been very locally focused. Meanwhile, consumer expectations have altered in response to online and mobile retail. Customer service is now a key consideration before a purchase, now that it's easy to find the desired product at the lowest possible price.
Retail Technology Market Development
Meanwhile, in-store technology applications continues to evolve. According to the latest market study by Juniper Research, retailers will connect 12.5 billion business assets, such as products, digital signs and Bluetooth beacons, to Internet of Things (IoT) platforms by 2021. This figure is expected to rise from 2.7 billion assets in 2016, representing a 350 percent increase.
Juniper predicted that radio-frequency identification (RFID), will re-emerge as the industry's great enabler technology, as a key factor in the IoT retail ecosystem. RFID tags, used to identify and locate retail assets in real-time, are now at a price point for mass deployment and integrate well with new IoT systems and analytics.
According to the Juniper assessment, new services such as dynamic pricing or enabling promotional offers via in-store digital signs are also poised for significant new worldwide market growth.
Juniper's latest research uncovered that next-generation processes -- such as personalized retail -- could be achieved by integrating enterprise software and emerging technologies, with data from connected IoT assets. Juniper forecast that software spend for enterprise resource planning systems to integrate this data would reach $11.3 billion annually in 2021, rising from $1.5 billion in 2017.
Outlook for Retail Technology Innovation
"Innovative retailers such as Rebecca Minkoff have combined RFID with smart mirrors." said Steffen Sorrell, senior analyst at Juniper Research. "Integrating these systems allows real-time information to improve the store experience and bridge physical and virtual worlds – in this case, the concept drove a 200 percent increase in sales."
That being said, each retailer's approach to IoT deployment should differ depending on their main channel focus. Physical retail spaces still have many benefits. Therefore, Juniper predicted that online retailer focus would be on technologies, such as machine learning to provide digital assistance, or digital performance management.
In this latter instance, measurements such as user experience, IT performance and business outcome are analyzed holistically to determine necessary improvements. Cognitive systems and IoT apps will experience a significant growth upside within the retail sector.