We need to talk about the little things. All of those small devices connected together that bring data-driven value to business. The Internet of Things was pinpointed as one of the 12 key eCommerce trends for 2020 in our recently-published report. It’s a ‘Quick Win’ for businesses and a topic that everyone should be exploring.
Smartphones, smart speakers, and other sensors are only a few examples of how the Internet of Things already connects with eCommerce business. In this article, we will look at some compelling numbers that make IoT such a hot trend right now.
What is the Internet of Things?
For those of you who are new to the domain, the Internet of Things is an umbrella term for a network of inter-connect end-point devices that share data over the internet.
Benefits of IoT in online sales
The Internet of Things can help to significantly reduce costs through leveraging aggregated data for actionable insight. To give an illustration, let’s have a look at smart farming practices. Weighing machines used in silos are very expensive. To cut down the costs, companies can use a range of possibilities of the IoT. Multiple sensors that can measure and monitor the quality and quantity of grains. Data from all these devices is then converted and forwarded to a user interface, where they can be displayed as data visualizations, give alerts of low grain stock, or automatically put actions into place without user intervention. This kind of feeding system may regulate the amount of grain given to animals depending on the prevailing conditions. Such a procedure can reduce the amount of waste produced and the overall purchasing and processing costs, which are significant in larger farms.
What can we achieve with IoT?
- The combination of IoT with other tools, such as RFID (radio-frequency identification) systems or sensors, enables real-time inventory tracking.
- Sensors in spaces like warehouses can help to prevent the over-long storage of items.
- Correctly mounted sensors in warehouses can monitor, for instance, the temperature and humidity of stored products and send information about potential irregularities.
- Pattern recognition among shoppers helps retailers to create personalized adverts and therefore increase sales.
In fact, the uses are limited only by our imagination. As long as we have end devices creating data, we can utilize it in aggregated views that lead to recalibration and improvement of business processes.
Now let’s look at the numbers.
Number of IoT devices
1.2 billion – number of connected IoT devices worldwide in 2018 (1)
25 billion – estimated number of connected IoT devices worldwide by 2021 (2)
75.44 billion – estimated number of connected IoT devices worldwide by 2025 (1)
127 new devices per second – number of new devices connected to the internet every second (3)
6.58 devices a person – estimated number of connected devices per person in 2020 (3)
As you can see, the number of IoT devices is increasing rapidly. Every single smartphone, for example, is an IoT device sending data to a central hub that is large viewed in context with information from millions of other devices. It is estimated that only four years are needed for the number of devices to increase by over 55 billion.
IoT market structure
67% of all IoT devices are installed in China, North America, and Western Europe.
Top 5 global IoT areas: smart cities (28.6%), industry (25.4%), healthcare (22.0%), smart homes (15.4%), connected cars (7.7%) (3) .
It has long been known that China is a major early adopter of data-driven technology and that is also true for IoT. Along with the traditional US and European tech markets, China is at the forefront. At the other end of the spectrum, it is worth noting that the list of top global adoption areas didn’t include any African countries.
IoT market revenue
121 billion USD – estimated Internet of Things (IoT) market revenue worldwide in 2019 (4).
1.6 trillion USD – estimated Internet of Things (IoT) market revenue worldwide in 2025 (5).
We can see that the market is growing in line with the number of devices. To back up this fact, companies are upping spend on IoT and the projected worldwide expenditure in 2022 is set to top 1 trillion USD (4).
IoT market size
$130 million – the estimated size of the IoT market in India alone in 2018 (6)
$190 billion – the estimated worldwide value of IoT in 2018 (7)
$1.11 trillion – the estimated worldwide value of IoT in 2026 (7)
The size of the IoT market will increase 13 times in just eight years, which will be a considerable achievement. But can businesses keep pace with the new opportunities?
Commercial use of IoT devices
The combined business and manufacturing sector has seen the greatest adoption of IoT devices, with the healthcare industry not far behind. Other sectors have a smaller share but no less opportunity, as IoT is generally applicable in any sector.
40.2% of IoT devices are used in business and manufacturing. (3)
30.3% of IoT devices belong to the healthcare industry. (3)
8.3% of IoT devices are used in retail. (3)
7.7% of IoT devices belong in the security sector. (3)
4.1% of IoT devices are used in transportation. (3)
Connection types of IoT devices
2.1 billion connected devices in wide-area IoT e.g., devices using cellular connections and unlicensed low-power technologies. (8)
16 billion connected devices in short-range IoT e.g., Wi-Fi, Bluetooth. (8)
There are multiple ways to connect with IoT devices. For instance, you can use Wi-Fi or Bluetooth, which are the most popular types of connections. However, you can also use wide-area connectivity solutions, which include 3GPP Cellular, LoRa, Sigfox, LTE Cat-M1, and more.
Types of devices connected with IoT
It won’t come as a surprise that mobile phones are the common devices connected with IoT. A bigger surprise is 1.3 billion fixed-line phones.
1.7 billion connected devices are PC/laptop/tablet. (8)
8.6 billion of connected devices are mobile phones. (8)
1.3 billion of connected devices are fixed-line phones. (8)
The benefits of IoT
90% of senior executives in media companies believe IoT is critical to their growth. (10)
66% of US cities are investing in smart city IoT technology to improve the daily lives of residents. (10)
25% of projected savings in the healthcare industry are due to the use of IoT devices. (10)
Using IoT brings companies added value. The Internet of Things helps with making decisions and provides a substantial competitive advantage. This concept also means better inventory management, and thus, monitoring and tracking of incoming and outgoing shipments. The benefits of IoT are also visible in marketing and promotion, and also affect user experience. As CTOs start to see the measurable benefit of IoT, more and more companies across a wide range of sectors are setting aside budget for IoT implementations.
IoT in retail and eCommerce
IoT has much to offer, and its popularity as an eCommerce trend is still growing. However, it is still an undeveloped area. When it comes to the commercial use of IoT devices, business and manufacturing, as well as healthcare, are all pushing ahead. Retail and eCommerce are often leaders in new tech and may be in 3rd place regarding the number of devices, but this number still represents only 8% of all IoT devices.
There is a great opportunity for anyone in the commerce sector who takes IoT seriously and invests in data-driven business enhancement, so it could be worth considering when budgeting for the coming year. In fact, 80% of retailers will use IoT to customize store visits and give better shopper experience by 2021, so if you are not thinking about that investment already, you may be left behind.
- Statista. (2016, November). Internet of Things (IoT) connected devices installed base worldwide from 2015 to 2025. Retrieved from: www.statista.com/statistics/471264/iot-number-of-connected-devices-worldwide
- Gartner. (2018, November). Gartner Identifies Top 10 Strategic IoT Technologies and Trends. Retrieved from: www.gartner.com/en/newsroom/press-releases/2018-11-07-gartner-identifies-top-10-strategic-iot-technologies-and-trends
- Bera, A.; Safe At Last. (2019, February). 80 IoT Statistics (Infographic). Retrieved from: safeatlast.co/blog/iot-statistics
- Liu, S.; Statista. (2019, October). Internet of Things – Statistics & Facts. Retrieved from: www.statista.com/topics/2637/internet-of-things
- Statista. (2019, February). Size of the Internet of Things (IoT) market worldwide from 2017 to 2025. Retrieved from: www.statista.com/statistics/976313/global-iot-market-size
- Sarvaiya, D.;Yourstory. (2019,October). IOT handbook: Why entrepreneurs need to consider IoT in improving customer experience. Retrieved from: yourstory.com/2019/10/iot-entrepreneurs-customer-experience-government
- Fortune Business Insights. (2019, December). Internet of Things Market Size Report. Retrieved from: www.fortunebusinessinsights.com/industry-reports/internet-of-things-iot-market-100307
- Ericsson. (2016, November). Internet of Things forecast. Retrieved from: www.ericsson.com/en/mobility-report/internet-of-things-forecast
- Avsystem. (2019, October). How to Choose the Right IoT Connectivity Option? Retrieved from: www.avsystem.com/blog/iot-connectivity
- Chang, J.; Finances Online. 10 IoT Trends for 2020: Latest Predictions According To Experts. Retrieved from: financesonline.com/iot-trends