More than half of food and grocery businesses expect the Internet of Things to deliver improved customer understanding, reduced costs, increased efficiencies and new business models.
IoT technology is changing the way organisations collect and analyse data in order to better predict real-time consumer demand and needs.
A new report – published by food and grocery research charity, IGD – set out to explore the evolution of IoT technology, the opportunities available and the strategic implications for supply chains.
The Internet of Things is already creating greater connectivity through data transparency and business partnerships, changing the way organisations operate and reinvent value through the creation of new services and applications.
IGD has made nine predications about the continuing evolution of IoT:
1. IoT will increase opportunities for product and service personalisation, and help fuel growing expectations in this area – greater personalisation could boost sales but does present supply chains with challenges around fragmentation and lower economies of scale.
2. IoT will even up supply chains by increasing visibility, and this means companies will collaborate more as opportunities surface – it holds the potential for breaking down the information silos by creating connections and transparency throughout the end-to-end chain.
3. Companies will increasingly turn to service providers with expertise in technology and analytics to help them realise the opportunity – using providers can reduce capital investment, pool expertise, keep businesses agile, and foster competition and innovation in the market.
4. Privacy concerns with sharing personal data won’t be a major barrier as people have become accustomed to sharing this, provided they see the benefits. The internet and social media have already set a precedent that provides lessons for IoT – companies must convince users they are trustworthy, with the security of their data as well as in their intentions with it.
5. Forecasting will be constructed from individual consumer demand by responding to and shaping real-time events with direct visibility of impact. It will radically change the traditional business approach to forecasting by bringing businesses more accurate data to work with from live consumer feedback using product sensors.
6. New business models will become dominant, based around services, subscriptions and crowd sourcing, accelerating radical restructuring in the industry – it helps catalyse this shift, acting as a foothold to services created by the production of new connections, consumer-level visibility and personalised engagement.
7. Consumers won’t directly pay more for existing products to be IoT-enabled – technology companies and retailers will need to find other ways to create value for themselves from the data generated. Creating value will lie in offering customers additional services around their product, while demonstrating the internal efficiencies delivered through the insight generated.
8. IoT will accelerate automation and AI, driving efficiencies and changing the capabilities and resource needed in supply chains, but risking an increase in vulnerability to system failures or hacking. IoT provides the “eyes and ears” for many other transformational technologies that will be able to leverage the wealth of information automatically acquired.
9. There won’t be a “game-changing” IoT innovation, but an accumulation of applications will steadily increase take-up until its ubiquity results in transformational change. The more enabled devices there are in the market, the more increasingly powerful IoT will become. Standards or interfaces will be crucial to promote collaboration and prevent companies being “locked” into distinct IoT eco-systems.