The IoT Chip Market in Retail is estimated at US$1,937.783 million for the year 2019. The global retail industry is undergoing a rapid transformation with the growing adoption of the Internet of Things (IoT). IoT has various applications across the retail sector as it helps boost sales, increase customer loyalty, offer a personalized experience, and improve inventory management.
The increasing proliferation of smartphones and connected devices coupled with rising penetration of better and faster internet connectivity is one of the major drivers of IoT Chip market in Retail. According to the World Bank, the percentage of the population using the internet increased from 20.412% in 2007 to 49.723% in 2017. Simultaneously, the number of households with broadband access has increased significantly in both developed and developing economies. For instance, in China, the subscriptions of fixed broadband increased from 82,879,000 in 2008 to 407,382,000 in 2018. Similarly, in India, it reached 18,170,000 by 2018 from just 5,280,000 in 2008. As broadband internet is becoming more readily available, more and more devices with WiFi capabilities and built-in sensors are being manufactured. With the declining cost of this technology, the market for IoT chip in retail is growing significantly.
An increasing number of connected consumers are positively impacting the demand for IoT solutions across brick-and-mortar locations. As more and more customers are using their smartphones and connected devices to check in-store pricing and local inventory levels, retailers are increasingly opting for IoT solutions in order to stay ahead in the intense competition. Increasing investments in IoT technology for retail applications is further bolstering the market growth during the forecast period. In 2017, Intel launched its latest platform, called the Responsive Retail Platform (RRP), for the retail sector. The platform connects in-store technology making it easier to develop and deploy the Internet of Things (IoT) by bringing together retail hardware, software, APIs, and sensors in a standardized way. In February 2019, the Posiflex Group introduced its full product portfolio of smart and connected retail solutions with fully-integrated hardware, middleware, and RMS (remote monitoring system).The rapid adoption of digital signage across the retail industry is another factor that is fuelling market growth. Retailers are also using this technology to monitor inventory in order to avoid oversupply, shortage, or thefts in stores. Moreover, they are using IoT solutions to predict equipment failure or detecting other issues in order to ensure food and beverage product safety.
With growing competition, retailers are increasingly focusing on customer loyalty while delivering the best in-store experience is further boosting the adoption of IoT across this sector which, in turn, fuelling the demand for IoT chips. The growing use of wearable devices by consumers is also attracting the retail sector to come up with innovative marketing strategies. For example, Walgreens is using wearables to encourage its customers to walk 10,000 steps per day by giving physical rewards in return as soon as a daily goal is reached. Thus, using wearables as a part of customer loyalty programs is further driving the market growth.
By geography, IoT Chip market in Retail is segmented as North America, South America, Europe, Middle East and Africa (MEA), and Asia Pacific (APAC). North America accounted for the major market share in 2019 and will remain at its position until the end of the forecast period. The early adoption of new technologies and the presence of global retail stores in countries like the U.S. and Canada are significantly propelling the market growth in this region. Starbucks, for example, has retrofitted some of its coffee machines with an external device called a ‘guardian module’ so as to securely aggregated data while proactively identify problems with the machines. APAC, however, is projected to witness a substantial compound annual growth rate during the forecast period. The booming e-commerce industry is one of the major factors behind the growth of the market across the Asia Pacific region. As such, an increasing number of partnerships are being formed among e-commerce giants and IoT technology and solution providers which will definitely propel the growth of the IoT chip market in retail across this region. For example, in 2017, one of China’s leading online retailers JD.com partnered with hardware company Zebra to create the IoT+E-commerce Logistics Lab to work on applications of the Internet of Things (IoT) in online retail. In November 2019, the company launched the world’s largest home appliance experience center- JD E-SPACE- in Western China. This is the world’s first digital offline retail space which is fully covered by 5G and is powered by JD’s Starlink IoT retail platform to provide a seamless interactive retail experience to its customers. In September 2018, Alibaba partnered with Japan-based semiconductor company, Renesas Electronics, to accelerate the growth of IoT in China while expanding its online sales channels in the mainland.
Prominent key market players in the IoT chip market in Retail include Intel Corporation, Qualcomm Technologies, Inc., Texas Instruments Incorporated, Cypress Semiconductor Corporation, and NXP Semiconductors among others. These companies hold a noteworthy share in the market on account of their good brand image and product offerings. Major players in the IoT Chip market in Retail have been covered along with their relative competitive position and strategies. The report also mentions recent deals and investments of different market players over the last two years.