Insight

IoT+AI in Retail

Read more about M&A trends and activity in this sector

Joseph Radecki

Joseph Radecki

Managing Director, Corporate Finance, KPMG US

+1 303-295-8890

Brick & mortar retailers are strapping on the “tech” gloves

Dramatic declines in consumer foot traffic and rising operational costs have punched brick & mortar retailers straight to the gut, leading to the increase in “Going Out of Business” signs in store windows across America. Who can blame consumers for opting for the “smiling” boxes speedily delivered ‘same day’ to their doorsteps over the all-to-common brick & mortar experience filled with inventory shortages and painfully long price checks called in by fewer and fewer overworked cashiers. It’s also hard to blame any retailer for turning off the lights when trying to keep employees from chasing the next dollar in a hyper-competitive labor market while dealing with disruptive supply chain issues and seemingly uncontrollable shrinkage.

Smart brick & mortar retailers are fighting back and driving traffic back into re-invented stores outfitted with IoT+AI solutions. These technologies are fundamentally altering retail operations in ways that dramatically increase store efficiency, drive more productive, happier store staff, and create a better, more personalized shopping experience for customers. From cloud-based planogram management and spot inventories completed by computer-vision shelve scanning to cashier-less checkouts to the metaverse melding the online and in-store shopping experiences, the excitement around IoT+AI is driving significant investor interest back into physical retail.

IoT+AI is rapidly transforming retail

Retail technology is moving from working in silos with limited cross-function to automating end-to-end retail operations and altering the customer experience. Retailers are implementing AI-enabled IoT technology to collect data on customer consumption habits, manage inventory levels, enhance product placement, and dramatically alter the customer experience. As brick & mortar retailers make the shift to integrated IoT and AI technologies, a whole new shopping experience will be available to consumers.

Where we are


Retail technologies working in silos with significant dependence on store staff to complete primary functions


Lack of availability of real-time customer preference data restraining store manager decision making


Inventory data gathered by staff with barcode scanners walking the aisles


Omnichannel structure that allows consumers to browse both the online and physical store channels

Where we are going


Integrated IoT, AI, and ML technologies to automate retail operations efficiently 


AI-enabled IoT solutions generate real-time insights around customer buying preferences


Robots and image recognition monitor inventory levels, predict demand, and insure adherence to planograms


The metaverse blurs the boundaries between the online and in-store shopping experiences
 


We are happy to share “IoT+AI in Retail” that dives into how IoT+AI is rapidly transforming retail, highlights how IoT+AI I is being put into action, and provides commentary on active M&A participants and recent notable strategic M&A activity in the space.

As one of the most active M&A advisors in IoT and AI, we continue our regular dialog with leading global IoT and AI companies and the emerging innovators who are introducing new technologies and solutions. We hope you find this information valuable, and as always, feel free to reach out if you would like to discuss in further detail. To read the full report, download the PDF below.


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KPMG Corporate Finance LLC’s investment bankers have extensive Technology transaction and industry experience, which enables them to understand the industry-specific issues and challenges facing our clients.