Through a special arrangement, what follows is a summary of an article from Retail Paradox, RSR Research's weekly analysis on emerging issues facing retailers, presented here for discussion.
Let's assume the Internet of Things (IoT) will inevitably gain consumer acceptance. For retail, IoT isn't really about a few confined "marketing" use-cases, but potentially how people shop.
Here are a few things for retail's leaders to consider:
IoT will trigger radical process re-engineering — for both businesses and consumers. In 2007, a "talking fridge" tested by Germany's Metro AG was designed to order milk based on a household's consumption rate and current on-hand inventory in the fridge. In other words, consumers wouldn't have to go to the store to get their milk — instead it would come to them. Consumer adoption may still take some time. A 2014 survey from Acquity Group found about 35 percent of consumers thought that the smart refrigerator would be commonplace "more than five years from now." Still, the question for retailers: What would that do to the grocery store? Amazon is already all over it with its recently announced Dash Replenishment Service.
Source: Amazon video
The technology has yet to be standardized. The good news is that the technology world is rushing to address that challenge. The bad news is that (as always) there are competing standards groups.
Disruptors will see the value before you do. Not known as an industry of early adopters, the question for retail decision-makers is: How many innovators do you have on staff? If the answer is "zero," where and how often do you look for inspiration from the outside?
The CIO will re-emerge with a vengeance. The CIO position is a place "where fools fear to tread" — with brutally low budgets, huge maintenance headaches, never-ending pressure over cost controls, and the emergence of the CMO as the hot hand when it comes to technology spend. But IoT is pure technology and its applications are still emerging.
Although I don't believe the use-cases that consumers will glom onto have really emerged yet, they will. And just as was the case with mobility, retailers are going to need to devote resources (people, money, and time) to better understand what IoT will mean to them. The consulting world is already a-buzz with activity as the usual suspects align their resources for the coming innovation wave. But will retailers be able to respond from a knowledgeable position, or will they be responding to FUD (fear, uncertainty, and doubt) instead?