A recent Grand View Research report revealed that the global Internet of Things (IoT) in retail market size is expected to reach $297.4 billion by 2030 and grow at a 28.4 percent compound annual growth rate (CAGR).
The projected growth is attributed to connected technologies’ adoption and implementation. This includes Bluetooth Low Energy (BLE) and Near-Field Communication (NFC), for enhanced shopping and payment experience. Additionally, IoT sensors and hardware have become less expensive, leading to a demand for a seamless shopping experience that’s expected to fuel IoT adoption in the retail market. Meanwhile, smart payments continue to be more acceptable in the retail sector—a major factor that will drive the industry’s growth over the forecast period.
Grand View Research report’s key findings
The services component segment in particular is forecasted to grow at a CAGR of 31.1 percent from 2023 to 2030, according to the report. Significant IoT adoption in the retail sector is a major driver for this projected growth; it shows enhanced demand for infrastructure and application management services. The NFC tech segment made up more than 32 percent of revenue share last year, due to innovation in payment methods with mobile wallets.
The customer management application segment is also expected to grow at the highest CAGR of 33 percent from 2023 to 2030 as it allows retailers to deliver a customized and engaging experience to their customers.
The on-premises deployment segment accounted for a revenue share of more than 48 percent in 2022. The advantages offered to retailers, such as control over data security and privacy, reliability, cost savings, and customization options was a key contributor to the segment assuming so much market share.
Meanwhile, Asia Pacific is expected to grow at the fastest CAGR of 32.7 percent during the forecast period as a result of rising investments in the retail sectors of developing countries in the region.
IoT in the retail market
IoT devices are also beneficial to the back-end operations for retailers, such as organizing effective logistics operations. GPS trackers, RFID tags, and IoT-connected sensors help track where goods are headed in real-time, providing seamless supply chain management. Real-time tracking also prevents damage, spoilage, or loss of goods during transportation, which is significantly valuable for perishable food items.
This capability is expected to drive the IoT in retail market growth. For example, Microsoft Corp. launched its Microsoft Supply Chain Platform in November 2022, which is expected to help organizations leverage their supply chain data domain investment. The Microsoft ecosystem, which includes Microsoft Cloud, Azure, and Dynamic 365, would aid these efforts.
The COVID-19 pandemic has significantly impacted worldwide spending, including the retail industry. Retailers had paused several new projects as their primary focus was continuing business operations during the economic crisis. Additionally, the technology roadmap for IoT has been delayed by the companies due to remote working limitations.
IoT adoption in retail is expected to increase in the coming years, however. Retailers are implementing mobile payment systems, autonomous cleaning robots, and contactless checkout kiosks to reduce human interference and curb the spread of the coronavirus. Advanced technologies, such as AI, cloud services, and automation, are further augmenting the growth of the retail industry post-pandemic.
Click here to see the Grand View Research’s full report.