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Retailers and IoT: Running in Place?

Tuesday, 14 March 2017 19:18:32
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Virginia, Business Wire -- A recent benchmark report from Retail Systems Research (RSR), underwritten by Software AG, found that retailers remain stuck when it comes to Internet of Things (IoT) initiatives. This is the second annual report from RSR, “The Internet of Things in Retail: Getting Beyond the Hype”, and it shows that retailers are increasingly aware of the impact of IoT on customer engagement and competitive advantage. Yet, they are still hesitant to invest in cutting edge technologies due to operational challenges and a lack of supporting infrastructure.

Oliver Guy, Global Industry Director of Retail for Software AG, said: “2017 is a critical year for IoT in retail. Early adopters are seeing good ROI from pilot programs around connected inventory due to the needs of inventory understanding to support omni-channel commerce. Many brands, however, are falling behind by not making the leap to deployment and customers won’t wait much longer. They are starving for fresh offerings that enhance their shopping experience. For retailers, the biggest ROI comes when these technologies are connected together.”

Broken up into four categories, business challenges, opportunities, organizational inhibitors and technology enablers, the benchmark report highlights several key findings which underscore an increasingly tumultuous relationship between retailers and IoT deployments.

According to the RSR research, 70 percent of retailers acknowledge that IoT will drastically change the way they do business in the next three years. This is in stark contrast to the mere 74 percent who have deployed one or less sensor-based projects in the past 12 months.

For some, IoT is viewed as a “Swiss Army Knife” technology -- a tool that can be applied and benefit many parts of the business. IoT has the potential to automate and optimize a vast number of retail processes, most importantly, productivity. Respondents stated that there is much to gain from deploying IoT. Almost 70 percent say they see the potential impact on inventory management and store operations, and 68 percent believe IoT will boost profits by deepening customer engagement through monetizing data.

Data is one of the major benefits of IoT and there will be masses of data about consumer habits to be collected and analyzed. Amazon has been doing this for years, making recommendations based on previous behavior.

Guy noted: “The IoT has the potential to create business value that goes far beyond operational cost savings, indeed it can become the foundation for crafting new ‘smart’ services that can significantly enhance a customer’s journey. However, the IoT ecosystem comprises many hundreds of new players offering one or two parts of the IoT puzzle, which can muddy the waters for retailers. What is apparent is that no single vendor in the IoT ecosystem can do it all.”

Advanced technologies from machine learning, augmented reality, drones, 3-D printing, blockchain and much more will play into this evolving IoT ecosystem in creative and exciting ways. The combination of these and other technologies will enable rapid innovation and value creation for those retailers who can imagine the possibilities.

Guy continued: “It’s clear brands grasp the need for and potential application of innovative technologies like IoT, but there is a growing disconnect between this understanding and the call to action. The findings of the RSR Research not only provide some context for this challenge – with 51% stating that their infrastructure cannot support the Internet of Things and 47% saying business leaders don’t understand the benefits of IoT – but also provide a roadmap for IT to overcome these obstacles so they don’t miss out on a huge opportunity.”

The report can be downloaded here:

About RSR Research

Retail Systems Research (RSR) is the only research company run by retailers for the retail industry. RSR provides insight into business and technology challenges facing the extended retail industry, and thought leadership and advice on navigating these challenges for specific companies and the industry at large.
To learn more about RSR, visit

About Software AG

The digital transformation is changing enterprise IT landscapes from inflexible application silos to modern software platform-driven IT architectures which deliver the openness, speed and agility needed to enable the digital real-time enterprise.

Software AG offers the first end-to-end Digital Business Platform, based on open standards, with integration, process management, in-memory data, adaptive application development, real-time analytics and enterprise architecture management as core building blocks. The modular platform allows users to develop the next generation of application systems to build their digital future, today.

With over 45 years of customer-centric innovation, Software AG is ranked as a leader in many innovative and digital technology categories. Software AG has more than 4,300 employees, is active in 70 countries and had revenues of €872 million in 2016.

Learn more at

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