Strategic Intelligence: Internet of Things in Retail and Apparel

The Internet of Things, or IoT, describes the use of connected sensors and actuators to control and monitor the environment, the things that move within it, and the people that act within it. Use cases include the automated home, smart shelves, radio frequency identification (RFID) tags, wearable technology, and predictive maintenance for industrial machinery.

The retail environment remains challenging Geopolitical shifts, including new tariffs introduced by the US government in 2025, are increasing the costs and complexity of supply chains, forcing retailers to consider diversifying their sourcing and managing longer delivery routes. Retailers must streamline their operations with the help of digital tools to reduce unnecessary costs and adjust their pricing to remain competitive. Sticky inflation is limiting consumer spending as shoppers reevaluate their priorities and cut back on non-essential expenditure. Consumer confidence remains low, further hindered by the uncertainty surrounding tariffs. A US consumer survey of 3,034 respondents in January and February 2025 found that 33% believe government policies on tariffs and trade will increase apparel prices, likely prompting consumers to cut back on spending. Retailers are focused on consumer satisfaction Customer experience and personalization are crucial for retailers to gain a competitive edge and boost shopper loyalty. Retailers use IoT technologies to make the instore experience more seamless and increase customer satisfaction. While checkout-free technology had its challenges, more practical IoT solutions are delivering benefits. Technologies like smart shelves and beacon systems improve engagement by monitoring inventory and sending notifications to shoppers' smartphones, helping retailers understand consumer needs and build loyalty. IoT devices also gather data on consumer shopping behavior and preferences, allowing for tailored offerings and marketing strategies. IoT can help operational efficiency and ESG performance IoT can enhance retailers’ operational efficiency and environmental, social, and governance (ESG) performance. IoT tools help businesses monitor energy use, track emissions, and gather data across the supply chain, making measuring and reporting sustainability data easier. They can also predict equipment maintenance needs, reduce operational costs, and improve product safety. Solutions like smart shelves and inventory management tools optimize stock levels and minimize waste, while instore robots streamline operations and reduce labor costs. IoT allows retailers to navigate economic pressures while meeting the growing demand for sustainable practices.

Scope

This report provides a comprehensive analysis of Internet of things the retail and apparel industry including:

• How internet of things will help tackle five key retail and apparel industry challenges
• Which internet of things services companies across the retail and apparel industry value chain should invest in, explore, and ignore
• Leading adopters and specialist vendors of cloud computing in the retail and apparel industry

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