In the MarketsandMarkets taxonomy, we define Internet of Things (IoT) market as – Internet of things (IoT) can be defined as the use of sensors, actuators, and network communications technologies to interconnect people, machines, devices, and services for streamlining various processes and information flow. IoT has automatized the use of data generated by non-traditional end-point devices, and has been successfully implemented in smart cities, smart transportation, smart homes, and smart manufacturing. With the rapid transformation in retail sectors worldwide, IoT is acting as a catalyst in converting retail into smart retail.

The global IoT in retail market size is estimated to be $14.28 billion in 2015 and is projected to reach $35.64 billion by 2020, growing at a CAGR of 20.07% from 2015 to 2020.

• The declining price of IoT components, internet ubiquity, smartphones, and the cloud platform are the key drivers of this market
• Increasing cyber threats and the lack of common standards/interoperability are restricting market growth
• The growing number of connected devices and the need for a consolidated IoT solution act as growth opportunities for the IoT in retail market
• Key challenges faced by players in this market are integration issues and the reluctance of retailers to adopt new technologies

One of the main drivers in this market is- IoT as a technology involves a significant amount of data that has to be stored, managed, and analyzed. Since various parameters are monitored and analyzed across the retail value chain, this generates a vast amount of data that needs to be stored and analyzed. Cloud platforms present a perfectly cost effective, easily deployable alternative for this issue obviating the need to build on premise data centers for retailers. Furthermore, Cloud computing facilitates these processes as it enables the handling of a vast amount of data in real time. For example, when a customer enters the retail store, the buying behavior can be tracked and the the choices he/she makes can be recorded and stored in the cloud. This eventually helps retailers to design targeted offers and discounts, increase loyalty and maximize revenue per visit. Moreover the emergence of IoT PaaS (platform as a service) has also been an enabler and led to an increase in the deployment of the IoT solution in retail. This platform enables IoT to be used in various applications in the retail sector.

Connectivity providers include communication service providers that ensure connection between various devices or connection to the cloud. The IoT in retail market has abundant opportunities for wireless network providers, as connectivity is a vital aspect of the IoT system. Connectivity providers includes satellite operators and wireless connectivity vendors that build relays and ICs for the connection. Freescale, APM, Sierra Wireless, Broadcom, Cisco, Intel, Stream Technologies, Telit Wireless Solutions, Texas Instrument, and Zebra Technologies are some of the major connectivity providers operating in the IoT in retail market. Telecommunications companies are positioning themselves as network operators to provide services beyond connectivity;

Partnerships & collaborations, and new product launches were the key strategies adopted by industry players to achieve growth in the IoT in retail market. This strategy accounted for a share of 45% of all growth strategies adopted by market players. Market players are focusing on entering new markets through number of collaborations and partnerships. The IoT in retail market is at its nascent stage and every company is discovering new technology to cater this market, however, no market player has an integrated solution to cater to customer need. Therefore, companies are entering into collaborations to provide better IoT solutions. Moreover, small-scale companies are bringing out innovative technologies, but do not have funding or finance so they rely more on bigger players for developing IoT platforms. Collaborating with market giants help such smaller players cater to client needs and generate revenue. Intel, SAP, Cisco, IBM, and Microsoft are some of the leading market players that adopted the strategies of new product launches and partnerships and collaborations to develop their businesses. Since IoT is an emerging technology in the retail market and customer demand is high, companies are developing new solutions to utilize this new technology, thereby launching number of products more frequently.

Apart from product launches and partnerships, companies also adopted the strategy of mergers and acquisitions to expand their market shares and product offerings. These strategies accounted for a share of ~18% of the total number of growth strategies adopted by players in IoT retail market from 2012 to 2015.