Spending on Internet of Things solutions among retailers in the Middle East and Africa will grow by an average of around 19 per cent annually in future, representing nearly USD 1.6 billion in expenditure from 2014 to 2018, a study has said.
According to the International Data Corporation (IDC) study which looked at four key markets of South Africa, Saudi Arabia, Turkey and the UAE, overall Internet of Things (IoT) spending is soaring by an average of around 17 per cent per year.
“All those digital signs popping up in shopping centres and airports in the Middle East and Africa (MEA) region are the most visible element of a market that is taking off,” the study said.
“Despite the visibility of the signs, the great majority of IOT projects will relate to in-store promotions and personalised promotions, as well as ad hoc improvements to supply chains, in-store inventory systems and transportation or delivery systems,” it said.
Retailers are also seeking online and mobile sales channels and customer relationship initiatives, all steps on the path towards the creation of true omni-channel shopping, the study noted.
For all four markets, international brands will be the driving force, the study said, adding that while high-end brands are already spreading throughout shopping centres and airports in the region, the markets remain underserved.
The great majority of retail sales in MEA still happen in small, independent shops and in Sub-Saharan Africa, this proportion can be up to 90 per cent, it said.
Despite IoT’s uptake in retail both regionally and globally, the term is not widely used in the region’s retail sector, it added.
The IoT is a scenario in which objects, animals or people are provided with unique identifiers and the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction.