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Home » Survey: retailers drive demand for Internet of Things
Forward Thinking

Survey: retailers drive demand for Internet of Things

March 9, 2017
Ben Ames
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Brick and mortar retailers are planning significant technology investments over the next four years as they look for ways to fulfill e-commerce orders directly off store shelves, according to a survey released today.

Nearly 70 percent of retail decision makers surveyed are ready to make changes to adopt the Internet of Things (IoT), and 65 percent plan to invest in automation technologies for inventory management and planogram compliance by 2021, Zebra Technologies Corp. said.

The results come from Lincolnshire, Ill.-based Zebra's "2017 Retail Vision Study," a survey of nearly 1,700 retail decision makers worldwide that was conducted by the online survey firms Research Now Group Inc. and Qualtrics LLC.

"A lot of retailers are looking to use the store's back room as a warehouse for fulfillment," said Tom Moore, Zebra's industry lead for the retail & hospitality industry, in a phone interview. "Retailers are looking to leverage their footprint and use their real estate in the store to play in the e-commerce world."

Retailers are increasing their investment in technologies to enable e-commerce fulfillment because companies face three main challenges in trying to operate the store as a warehouse, he said. Most retailers track their goods with store inventory software that doesn't share data with their warehouse management system (WMS), their order management system is outdated, and they lack sufficient inventory visibility, Moore said.

Together, those hurdles make it difficult to track the goods on the shelves and to match them with incoming e-commerce orders. Most retailers have 98 to 99 percent inventory accuracy at the time they receive their goods from the warehouse, but that number drops to 50 to 60 percent by the time the goods hit the shelves, Moore said. A store that is willing to pay its employees to perform cycle counts can get the figure up to 70 to 80 percent, but most stores can't afford that expense, he said.

In response to that challenge, 79 percent of North American retailers plan to invest in IoT-enabling technology such as automated inventory verification systems and sensors on shelves by 2021, the Zebra survey found. And 57 percent of all retailers said they think by 2021, automation will help them pack and ship orders, track inventory, check in-store inventory levels, and help customers find items, the survey showed.

To reach that goal, 87 percent of retailers say they are planning to invest in technologies such as mobile point of sale (POS) devices that let shoppers pay for purchases anywhere in the store, the survey said. Another key technology is the array of sensors and beacons that let stores use location-based applications that communicate with individual shoppers' smartphones, linking their online shopping accounts with their in-store activity, according to Moore.

Finally, a third technology set for rising demand is radio frequency identification (RFID), the decades-old automatic identification (auto ID) method that has long been criticized for being too expensive for everyday goods. However, falling prices for RFID tags and scanners now make it worthwhile for retailers to tag items worth as little as $25, Moore said.

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Ben Ames is Editor at Large and a Senior Editor at Supply Chain Quarterly?s sister publication, DC Velocity.

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