Retailers forecast to spend $2.5 billion a year on 'internet of things' tech by 2020

out-law.com

Retailers will spend $2.5 billion a year on Bluetooth beacons, radio frequency ID (RFID) tags and other technology associated with the 'internet of things' by 2020, a market analyst company has predicted.

Juniper Research said the expenditure on IoT hardware and software will rise from the estimated $670 million that will be spent by retailers on such technology this year.

New 'beacon' technologies can help retailers connect with consumers via their mobile devices as they move around shopping centres and within individual stores. They allow retailers to prompt consumers with promotional offers for goods as they approach particular parts of a shop, and the ability to collect valuable personal data can help to identify future customer trends or improvements in store layouts.

RFID chips are read by readers when they get within a few feet of them, meaning that organisations can learn not just what is on a chip but where the chip is. Chips are used by supermarkets to track stock, for example, but can also be used to store personal information. 

Juniper Research said RFID tags can be used by retailers for the purposes of "real-time asset tracking, reduced labour costs and even dynamic pricing according to stock levels and online pricing".

"Linking the hardware elements of RFID tags, beacons and connected consumer electronics, such as wearables, with software analytics promises in-depth business insight and an enhanced customer experience," Juniper Research said.

Expert in retail data privacy Samantha Livesey of Pinsent Masons, the law firm behind Out-Law.com, recently highlighted the compliance issues retailers face when using new technologies to market products to consumers digitally. She urged retailers to adopt a layered approach to data privacy compliance.

"It can be difficult to deliver a privacy notice and collect consent when interacting with customers via apps and small screen mobile devices," Livesey said. "Retailers should consider carefully when and how in the customer journey to deliver the privacy notice and collect consent to address these technological issues."

"For example, if location-based marketing is being used via an app, the privacy notice and consent collection could be presented at the time the customer turns on their location services. Delivering the privacy notice at this point avoids the risk of a customer forgetting they had given consent previously and being annoyed by receiving what could be perceived as unrequested marketing messages at this later stage in their customer journey," she said.