Investment in smart IoT devices is set to rise among food and grocery companies, causing significant change in global supply chains, according to research from research organization IGD.
The company’s Supply Chain Analysis questioned 84 food and grocery businesses and service providers worldwide about the potential opportunity for food and grocery companies to transform their supply chains using IoT.
Two findings, in particular, stand out. First, IGD claims that 37 percent of companies in this sector are already trialing or have successfully deployed IoT products or services, such as smart fridges and smart heating systems. Second, its researchers say that a further 58 percent of food and grocery companies are planning to increase their investments by working more closely with technology providers to help them maximize IoT opportunities.
The reasons behind this investment in IoT are numerous, with 61 percent of respondents highlighting “improved understanding of customers” in their top three expected business benefits from IoT; 53 percent of companies citing “reduced costs and increased efficiencies”; and 51 percent suggesting that the “development of new business models” are the main potential benefits.
Evolution of supply chains
Chris Irish, supply chain insight manager at IGD states that the “pace of change and breadth of impact for technology is such that demand is growing for food and grocery supply chains to deliver innovations that offer speed, transparency, connectivity and convenience.
“The Internet of Things allows each unique product to be tracked and monitored, opening up the possibility for highly personalized and responsive solutions for consumers while introducing a new level of real time data-sharing for businesses.”
As well as the opportunity to deliver personalized offerings to consumers and open up new business models, Irish makes further predictions about how supply chains will evolve as IoT proliferates.
In a company statement, Irish suggests that IoT will change the traditional business approach to forecasting by providing more accurate data from live consumer feedback using product sensors. But, he cautions, consumers won’t be prepared to pay more for existing products to become IoT-ready, so the onus will be on retailers to create value, by offering additional services around their products and by using the data products generate more efficiently.
And while having this data places a burden of responsibility on businesses, Irish predicts that privacy concerns with sharing personal data will not be a major barrier to IoT adoption, since many people have already become accustomed to sharing this information as long as they see the benefits. If companies can convince consumers that they are trustworthy with the security of their data and their intentions with how they will use it, Irish says, consumers will be prepared to share.
Nevertheless, this won’t happen on its own. Irish suggests that 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. Therefore, as the number of IoT devices grows, the more powerful IoT will become.
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