ITMore Africa NewsAfrica’s opportunity to tap into expected US$94.4-billion global IOT market

April 4, 2019by myles

Retail IOT is expected to become US$94.4-billion market by 2025 according to Grandview Research report published in May 2018 – and if retail IOT was a country, it would be the 7th largest economy in Africa.

This is according to Toros Esim, Head of Digital Retail and Regional Director of Digital Strategy for the Middle East & Africa at Orange Business Services.

Esim said industry statistics show that Africa’s retail sector is growing strongly, but it is a much more complex picture across such a very diverse range of countries. Half of the consumption in growth in Africa is expected to come from just three geographic areas: East Africa, Egypt and Nigeria.

Retail covers a broad spectrum of operations, from the informal family-run store to the large malls, from fashion to fresh foods said Esim.

“Despite all this variation, we can see that there is recognition in parts of Africa of the potential to follow the global shift to an increasing emphasis on e-commerce and online shopping… the first movers are already making their moves not just in Africa, but also beyond,” he explained.

Gartner recently reported that augmented reality (AR) and virtual reality (VR) have the potential to shake up the customer experience by individualising retailers’ offers and enabling customers to visualise products in different settings.

The market research and industry analysis firm claims that by 2020, 100 million consumers will shop in AR online and in-store.

A 2018 Gartner survey indicated that, by 2020, 46% of retailers planned to deploy either AR or VR solutions to meet customer service experience requirements.

There is more activity in Africa and Esim added that African companies are now buying European companies – more than US$1.5-billion was spent in acquisitions in 2015 alone with Shoprite, Spar, and Foschini Group for example, all on the acquisition trail.

“Scale is important and ten of the fastest growing retailers in Africa are present (on average) in eight countries across the continent and have a store count of around 900 stores. Acquisition provides additional scale, expertise and technologies that can be transferred to the region,” Esim said.

IOT and scale

Orange believes that IOT (including cloud-based applications, big data infrastructure, business intelligence tools, analytics, machine learning and AI) is growing in tech influence within the retail sector, as operators continue to achieve the scale required.

According to Orange, there are four main operational domains within retail that is going to benefit from the use of the retail technology stack: shopping experience, store operations, e-commerce as well as supply chain and warehouse operations.

“Across all these operational domains, one of the key drivers is increasing visibility of the customer and the operation. This is where we see the sensory instrumentation supporting the capture of data from the operations and customer at better granularity and frequency, therefore allowing for more real time, relevant and contextual decisions possible,” said Esim.

He added that aid IOT is part of a digital mesh that provides its value by increasing visibility that otherwise may either not be possible to collect or have to be manually collected.

“While the instrumentation through sensors satisfied this particular need to collect the information, it is what is done with the data that is collected is essentially where the value from IOT is captured. In this respect, the right questions needs to be posed to the data as data itself does not drive the answers. It is the questions that are posed and specifically what type of target state and metrics we need to reach by the use of implementation of IOT and collection of data helps entities to have opportunities to drive the value,” he said.

And added: “This also ultimately means there is a holistic view and cooperation between different stakeholders let this be in public agency or between departments in a business to align around how the data will be used and how the analytics that can be executed will be made part of the decision process emerges as a critical success factor.”

Cost barrier

Esim said that cost is generally considered to be the main barrier to more widespread adoption of IOT.

“Most of the time what you would hear is there is no budget. Financing the investment associated with IOT, big data and analytic projects require new business models to be created with the partners and eco-system and through the mutualisation of the benefits. In an ever growing connected world, looking at the problems from existing lenses hinders the ability to capture the opportunities for the future,” he said.

As to whether or not African retail operators are ready to leverage IOT, the Orange Business Services executive believes the question needs to be examined from the internal capacities of the organisations in evolving their operational models leveraging more data.

“There are different levels of organisational maturity and hence it is not easy to make a sweeping comment about this aspect. Nevertheless, it basically boils down to the previous assertion. If you know what you want to accomplish, and the your cost / benefit analysis is within the degree of uncertainty you can accommodate, there are lot of capable local and international firms available to support the organisations to go through the ideation, assessment, design, deployment and operation of these projects.”

Source: IT Web Africa

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