Is the Internet of Things (IoT) the new fashion and retail disruptor?

　　Not limited to the electronics industry, we've seen the slow rise of the Internet of Things (IoT) in the apparel industry as forward-thinking companies keen to innovate and stay ahead of the curve invest in developing smart apparel and textiles.

　　The IoT is defined as "physical objects with sensors, processing power, software and other technologies that connect and exchange data with other devices and systems over the Internet or other communication networks," and it's hard to imagine what role the IoT plays in apparel. However, we have seen the development of smart wearables, smart shoes and smart textiles in recent years, but they have been slow to catch on. IoT adopters in retail and apparel include Amazon, Auchan, IKEA, Jingdong, Nike and Rewe.

　　Adopting Innovation in the IoT

　　Nike designed and launched a pair of self-tying sneakers that adapt to the wearer's foot shape and can be controlled via smartphone. When the shoe is placed on the foot, a custom motor senses the desired fit and adjusts to the foot. The wearer can customize the settings to know when they want the shoe to be loosened or tightened. The concept is based on research proving that feet expand when they move.

　　The app also allows users to customize the LED colors on the shoe, with each color representing a level of looseness.

　　Cyrcadia Health launched iTBra, designed to alert women to early signs of breast cancer. After wearing the bra for up to 24 hours, it assesses breast health. As breast cancer cells generate heat, the bra detects the cell temperature and transmits the data to a real-time database. Any abnormal readings are sent to the user and her doctor via a smartphone app.

　　Health seems to be the theme of the Internet of Things in apparel. Sensoria Fitness has introduced a line of fitness gear that tracks health and performance capabilities and reports metrics to a smartphone app.

　　And Tommy Hilfiger has embedded the IoT into its Tommy Jeans Xplore line of casual wear.

　　In textiles, user-controlled color-changing fabrics called ChroMorphous can change color with temperature changes and can be modified accordingly.

　　The Internet of Things in the Supply Chain

　　According to a recent Global Data report, "The Internet of Things in Retail and Apparel," technologies that can move items through the supply chain with minimal human intervention are also becoming increasingly popular with retailers.

　　"Automating the supply chain and minimizing labor can significantly improve efficiency. This area is becoming increasingly important as retail sales increasingly bypass stores and wholesale and go directly to consumers," the report reads.

　　"Smart shelves, cameras and radio frequency identification (RFID) chips on products in stores or warehouses help to instantly update retail merchandise inventory records. They can also speed inventory replenishment coordination among retailers."

　　According to the National Retail Federation (NRF), 8 percent of consumer goods sold in the U.S. are returned each year, which equates to $260 billion in merchandise. The IoT can be used to diagnose product issues in transit, significantly reducing the likelihood of retailer returns and associated costs.

　　"Remote diagnosis of supply chain issues benefits both retailers and customers, as retailers can minimize costs and reduce the burden on the supply chain while keeping customers happy," GlobalData's report reads.

　　For example, IoT delivery startup Living Packets packages items in bags with automatic locks and internal sensors that monitor temperature, weight, humidity and vibration to prevent damage to the contents. Both the company and the sender are alerted if the item is tampered with. GPS tracking is also used to monitor the fleet of products being shipped to prevent theft of goods and provide visibility into inventory in transit.

　　Leveraging the Retail Shift

　　The Internet of Things appears to be more readily adopted in retail, with companies keen to capitalize on the shift to online shopping during the Covid-19 explosion.

　　The pandemic accelerated the launch of interactive web pages, apps and new creative offerings to keep customers interested and improve retention rates. In fact, there are a variety of ways the Internet of Things is being adopted in retail.

　　Athleisure wear brand Lululemon is one of them. The retailer acquired fitness tech startup Mirror in 2020 to put the power of inventory management in the hands of customers. Instead of asking store associates for support, customers use the Lululemon app to scan barcodes on item labels. This redirects the customer to the product page in the online store. It then runs a live inventory to check the stock of all its local stores, sorted by distance.

　　GlobalData estimates that the global IoT retail market will be worth $25.6 billion in 2025, up from $19.3 billion in 2020, growing at a compound annual growth rate (CAGR) of 5.8 percent.

　　Nikki Baird, vice president of strategy at Aptos, a U.S.-based retail technology solutions company, told Just Style that they see the greatest demand for IoT across all channels.

　　"From mid-2020 to mid-2022, our customers' omnichannel business and the revenue they generate or buy from home to ship to store doubles in two years, while at the same time, the online business grows incredibly. There's a lot of experimentation going on - that's what we're seeing from our customers."

　　An industry that is behind the times?

　　However, as the report notes, IoT adoption in retail has been slower than in other industries because its technology is typically adopted in the context of retail supply chain analytics or personalization, which represent only a small portion of the overall retail industry. And in the apparel sector, IoT adoption has failed to become mainstream.

　　Edwin Keh, CEO of the Hong Kong Research Institute of Textiles and Apparel (HKRITA), believes that IoT is a hot topic, but adoption is limited.

　　"The main applications I see are consumer-facing applications. The pandemic has pushed a lot of technology into stores and customer interfaces. In the last few years, there have been advances in contactless purchasing in stores, online customer service, and predictive tools. As market turmoil has made many legacy regression analyses more inaccurate and poor predictors of future preferences, there has been a greater focus on real-time, forward-looking tools. The Internet of Things is a key enabler here.

　　In the supply chain, there is greater use of IoT to track production, improve transparency and reduce lead times, he explains. But there seems to be a lot of work and opportunity here. Overall, the supply chain still seems to be behind the times in terms of adopting new tools. The key driver for future adoption is whether IoT can accelerate delivery, reduce inventory risk, improve flexibility and reduce costs."

　　The Future of IoT in Retail and Apparel

　　The jury is still out as to whether the IoT has a bright future in apparel and retail.

　　In retail, in particular, RFID has become an increasingly popular tool for monitoring inventory levels, but Baird says their customers remain deeply divided about its priorities.

　　"There are evangelists who say we don't think there's a business case, but we've conducted trials and now we can't go back to the days when we didn't have the level of visibility that article tags gave us.

　　"The biggest hurdle is not the cost of tags, but the cost of readers, especially where you need it most, which is in stores. You need full coverage - just a few handheld devices is not enough.

　　"I think there's a good business case for using RFID for apparel, but it's been slow to take off - it's a paradigm shift in the way you think - retailers aren't doing a good job of making that shift.

　　"We're going to eliminate the naysayers and get there. But we're talking about the decade before the shift really happens."

　　Nonetheless, GlobalData's report suggests that the Internet of Things is a technology trend in retail, especially when it comes to mergers and acquisitions.

　　"Major retail and apparel companies have the opportunity to acquire key IoT software to strengthen their position in the technology space," it says.

　　In March 2019, TokenPay Swiss acquired lingerie and swimwear e-commerce group Naked Brand Group, while in February of the same year, KBS Fashion acquired Tribe Private for an undisclosed sum.

　　GlobalData offers a forward-looking timeline for the future of IoT in retail and apparel:

　　2022 - IoT-related supply chain and chip manufacturing will become more agile and robust.

　　2023 - Industrial IoT connectivity will surpass consumer connectivity by 2023, according to the GSMA.

　　2025 - Nearly ubiquitous IoT device connectivity will reduce operating costs to less than 1 cent per day. According to the GSMA, the number of IoT devices is expected to reach 25.1 billion. IoT will be a driving force for semiconductor companies.

　　2030 - AR and VR adoption in the IoT will become commonplace.

　　2035 - There will be 1 trillion IoT devices according to Arm.