How the Internet of Things will enhance retail ERP solutions
The retail sector has undergone dramatic changes within developed markets, which the Internet of Things (IoT) technology adoption is accelerating. The widespread digitisation of the market has given rise to an industry that's very much data- and demand-driven, as opposed to supply- and cash-driven.
It's important to understand, when analysing the use of IoT in retail, that it requires more than a bunch of technologies in isolation. It's a transformation in retailer business processes, enabled by a tailored set of purpose-built systems.
Retail IoT market development
According to the latest market study by Juniper Research, revenues generated by IoT retail platforms will exceed $4.3 billion by 2023 - that's up from an estimated $890 million in 2018.
According to the research findings, challenging retail conditions, exacerbated by strong competition in the retail sector, the rise of eCommerce and spiraling store rental costs are acting like a big motivation for retailers to adopt IoT platforms.
The analyst found that IoT platform implementation will allow retailers to unlock efficiencies, particularly in the supply chain, which will improve operating profit margins.
Juniper anticipates that this push for efficiency will drive the total number of IoT platform connected assets to almost 25 billion units by 2023 -- that's up from just over 5 billion in 2018.
Juniper stated that the rise of enterprise resource planning (ERP) systems, leveraging IoT sensors to enhance resource utilisation, will drive overall IoT retail software spend rapidly, with annual investment in these ERP solutions reaching over $13 billion by 2023.
"Retailers are facing a perfect storm of pressures and challenges, which IoT implementation can help them navigate successfully. ERP and retail platform providers are a compelling proposition in enabling successful IoT transformation," said Nick Maynard, research analyst at Juniper Research.
Outlook for retail technology applications
Juniper also carried out an assessment of the extent to which retailers have implemented the various applications, based on factors such as technological clarity, cost barriers and existing deployments. This assessment found that RFID technology will continue to have the biggest impact on the retail space.
This is due to the positive impact RFID implementation can have in logistical and warehousing operations, and also as part of new shopping experiences such as Amazon Go. Resource optimisation and heat sensor technologies were also found to be highly mature and disruptive in the retail sector.
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