The worldwide market for Internet of Things hardware for retail applications — including sensors, RFID tags, beacons and wearables — is expected to be worth more than $94 billion by 2025, according to a new report by Grand View Research.
That figure translates to a compound annual growth rate of about 21.5% for the years between 2016 and 2025, growth which in part can be attributed to the "merging of digital and in-store operations in retail stores," the firm said in a press release announcing the research.
The beacons portion of the IoT market alone is expected to experience an annual growth rate of more than 23% between 2016 and 2025 as more retailers use them to boost in-store experience and send customers promotional offers and messages, according to the report.
Deployment of IoT technologies for retail applications appears to have turned a corner in the last couple of years from curiosity to established trend. While actual project size for some retailers may only involve a handful of stores, or just one aspect of store operations, others are making bigger commitments.
For example, Walmart already has deployed IoT sensors in refrigeration units in 5,000 stores to detect food spoilage, and has more extensive plans to use IoT to track customers' shopping behavior, according to our sister publication, CIO Dive. Also, Target, Lululemon and Levi Strauss each have widely deployed RFID specifically.
Many retailers are still trying to figure out how to make the most out of IoT. Some may start with an eye toward improving inventory accuracy and management, making their supply chains more efficient, or improving their record against theft and other losses. Later, they may gain enough confidence with the technologies and gear to use it for more customer-facing purposes — real-time in-store promotions or gathering data on shopping patterns, for example.
With a variety of potential use cases, it's no wondering that adoption is taking off. In addition to Grand View's sunny projections, Transparency Market Research recently said the IoT-based connected retail market could be worth more than $82 billion by 2025. Also, at the end of last year, Aruba Networks estimated that at least half of retail organizations worldwide had adopted IoT to one extent or another — though some of those deployments may have been small. Additionally, 80% of retailers have allocated budget to spend on IoT and similar technologies, according to other recent research from IDC.