Internet of Things (IoT) in Retail Market, by Offering (hardware, Platforms, Service, Application): Global Opportunity Analysis and Industry Forecast, 2020-2027

Internet of Things (IoT) In Retail Overview

The internet of things (IoT) is a set of technologies that uses sensors and actuators to inform us about the status of everyday items such as vehicles, tools, and even living beings. It allows us to interact with them, enabling connectivity with platforms in the cloud that receive and process information for posterior analysis. This analyzed data is then used to make decisions.

IoT in retail refers to the use of interconnected devices and sensors to gather information and facilitate automated processes that eventually improve the client shopping experience and optimize the proficiency of retailer’s operations.

Global Internet of Things (IoT) In Retail Market Analysis

The global Internet of Things (IoT) in retail market size was $42.48 billion in 2022 and is predicted to grow with a CAGR of 27.97%, by generating a revenue of $483.3 billion by 2032.

COVID-19 Impact on Global Internet of Things (IoT) In Retail Market

The COVID-19 pandemic has heightened the demand for contactless solutions in retail. IoT technologies enable touchless interactions, such as self-checkout systems, mobile payments, and digital signage, reducing the need for physical contact and enhancing safety measures. Retailers have realized the importance of implementing IoT solutions that enable remote monitoring, real-time data analysis and automated processes. This has led to increased use of IoT technologies in retail during the pandemic.

On the other hand, the COVID-19 pandemic has caused financial uncertainty and many retailers are facing financial problems. This created budget constraints to invest in IoT technologies, slowing the adoption of IoT in retail. Due to the IoT, concerns about information and data protection are increasing, which is affecting the market growth. As more devices are connected to the network, the risk of cyber-attacks and data breaches also increases. These factors hindered the market growth amidst the pandemic.

Growing Usage of Internet of Things (IoT) to Drive the Market Growth

IoT innovations enable seamless integration between different retail channels, including physical stores, online platforms, and mobile applications. This enables retailers to offer a single, unified shopping experience across all touchpoints, permitting clients to seamlessly browse, purchase, and return items. IoT devices can track and monitor inventory levels, detect out-of-stock situations, and provide alerts for replenishment. Additionally, IoT-based security systems, such as video surveillance cameras and RFID tags, can help prevent theft and reduce losses. IoT technologies enable retailers to provide personalized and interactive experiences to their customers. By leveraging IoT devices and sensors, retailers can gather data on customer behavior, preferences, and demographics. IoT solutions can help retailers optimize their operations and reduce costs.

High Cost of Installation to Restrain the Market Growth  

Implementing IoT solutions in retail requires significant investments in devices, infrastructure, and data management systems. The upfront costs associated with IoT adoption can be a barrier for smaller retailers or those with limited budgets, hindering widespread adoption. IoT solutions often involve the integration of multiple devices, platforms, and systems from different vendors. Achieving seamless interoperability and integration can be complex and challenging, requiring expertise and resources. Also, IoT implementation requires specialized technical knowledge and skills. Retailers may face challenges in finding and retaining talent with expertise in IoT technologies, which can slow down its adoption and implementation. The IoT ecosystem lacks standardized protocols, which can hinder interoperability and compatibility between different IoT devices and systems.

Advancements in Technology to Drive Excellent Opportunities

IoT sensors embedded in shelves can monitor product levels, track inventory in real-time, and automate the replenishment process. This helps retailers optimize their inventory management, reduce stockouts, and improve operational efficiency. IoT devices, such as beacons and sensors, can collect data on customer movement, dwell time, and foot traffic within stores. This data can be analyzed to optimize store layouts, improve product placement, and enhance the overall store experience. IoT technologies can help retailers optimize energy consumption in stores through smart lighting, HVAC systems, and energy monitoring devices. This can lead to cost savings, reduced environmental impact, and improved sustainability. IoT-based tracking systems, RFID tags, and smart locks can improve security measures in retail stores. Real-time video monitoring and analytics can help identify suspicious activities, prevent theft, and enhance loss prevention efforts.

Global Internet of Things (IoT) In Retail Market Share, by Component, 2022

Hardware sub-segment accounted for the highest share in 2022. Hardware components such as sensors, beacons, RFID (Radio-Frequency Identification) tags, and smart shelves are essential for collecting and transmitting data related to inventory management, customer behavior, and store conditions. These components enable retailers to monitor and optimize various aspects of their operations, leading to improved efficiency and customer experience. Unlike services, IoT in retail requires physical implementation. Retailers need to install and integrate hardware devices into their existing infrastructure, such as point-of-sale systems, inventory management systems, and store layouts. Hardware components provide the foundation for reliable and scalable IoT solutions in the retail market. Retailers need robust and durable hardware devices that can withstand various environmental conditions, such as temperature variations and physical interactions.

Global Internet of Things (IoT) In Retail Market Share, by Technology, 2022

Bluetooth low energy sub-segment accounted for the highest share in 2022. BLE enables proximity-based marketing and personalized advertising in retail stores. Retailers can deploy BLE beacons strategically throughout their stores to send targeted promotions, discounts, and product information directly to shoppers' smartphones. BLE offers a cost-effective solution for tracking assets and managing inventory in retail stores. Retailers can attach BLE tags or sensors to their products, shelves, or equipment to monitor their location and movement within the store. This enables real-time inventory management, reduces stockouts, and improves supply chain efficiency by automating the tracking process. BLE technology allows retailers to gather valuable customer analytics and behavior data. By tracking shoppers' movement and dwell times using BLE beacons, retailers can gain insights into customer preferences, popular store areas, and product interaction patterns.

Global Internet of Things (IoT) In Retail Market Share, by Application, 2022

Customer management sub-segment accounted for the highest share in 2022. Customer management applications place a primary emphasis on understanding and serving the needs of individual customers. They enable retailers to deliver personalized experiences, build stronger relationships, and drive customer loyalty. IoT gather data about customers' preferences, behavior, and interactions with the store environment. This data can be used to create personalized interactions, enhancing customer satisfaction and loyalty. Customer management applications contribute to revenue generation by increasing customer satisfaction, driving repeat purchases, and attracting new customers.

Global Internet of Things (IoT) In Retail Market Share, by Deployment, 2022

Cloud sub-segment accounted for the highest share in 2022. Cloud services easily accommodate the growing demands and handle the influx of data without requiring significant upfront investment in infrastructure. Cloud deployment eliminates the requirement for an extensive on-premises framework, decreasing capital expenditure. Retailers use cloud services on a pay-as-you-go basis, rather than investing in software. They use cloud-based data storage and processing services to store and analyze larger amounts of IoT data generated from sensors, beacons, and other gadgets. Cloud providers have robust security measures and expertise to protect IoT data and infrastructure. They invest heavily in securing their platforms against cyber threats, implementing encryption, access controls, and regular security updates.

Global Internet of Things (IoT) In Retail Market Share, by Region, 2022

The North America Internet of Things (IoT) in retail market generated the highest revenue in 2022. The greatest market for IOT in retail is in the North America region. North America has a well-developed and robust IT infrastructure, including internet connectivity and data centers, which provides solid foundation for implementing IoT solutions, enabling seamless data communication and processing between devices and cloud platforms. North America has a significant and highly developed retail market, which creates ample opportunities and demand for IoT solutions in areas such as inventory management, supply chain optimization, customer engagement, and personalized marketing. North American retailers have been early adopters of IoT technologies in their operations. They have recognized the potential benefits of IoT in improving productivity, decreasing costs, upgrading client encounters, and gaining a competitive advantage. As a result, North American retailers have made considerable investments in IoT frameworks, gadgets, and platforms, driving a higher market share compared to regions that will be generally slower in adopting IoT in retail.

Competitive Scenario in the Global Internet of Things (IoT) In Retail Market

There are several major players functioning in the highly competitive global internet of things (IoT) In retail market. To increase their market presence and boost their product portfolios, market players are investing in strategies like geographical expansion and product development. They are focusing on designing IoT solutions that address key retail challenges such as stock management, supply chain optimization, customer engagement, and in-store analytics. Major players are offering installation, maintenance, and investigating services for IoT gadgets, guaranteeing retailers to maximize the value of their IoT deployments. They are responding to specific customer needs and gaining a competitive edge by differentiating their products through innovations of different IOT products.

Some of the leading global internet of things (IoT) In retail market players are Arm Limited, Google LLC, Cisco Systems Inc., IBM Corporation, Intel Corporation, Impinj, Inc., Microsoft Corporation, Losant IoT, PTC Inc., and NXP Semiconductors.