By 2040, one in five retail purchases in Australia could be made by smart appliances and household devices, according to a new prediction from Telsyte.
The figures are contained in Telsyte Australian [email protected] Market Study 2019 which forecasts the IoT-Commerce market could be worth more than $100 billion in Australia, or equivalent to around 20 per cent of consumer retail trade by 2040.
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IoT-Commerce refers to purchases enabled or facilitated by smart appliances (eg smart fridges) and other [email protected] products such as smart speakers.
According to the report, the Australian [email protected] market grew 57 per cent during the past 12 months to $1.1 billion in 2018 and is forecast to reach $5.3 billion by 2023. This growth, predominantly driven by rapid adoption of smart speakers, is paving the way for a new style of shopping.
The report also predicts that by 2040, at least a quarter of appliances will have built-in sensors and partnerships to facilitate IoT-Commerce in countries like the USA, UK, Australia and New Zealand.
While still in its early days, Telsyte predicts IoT-Commerce will become mainstream within 10 years’ time. The analysts argue the new paradigm for digital commerce is set to have as much impact as eCommerce and mCommerce.
“IoT-Commerce is set to provide a more seamless and hassle-free experience when shopping for everyday household items, automating the process and freeing up time for Australians,” said Foad Fadaghi, MD of Telsyte.
Telsyte’s latest digital consumer study found “convenience” is overtaking price as the number one factor for purchasing goods online instead of in-store. The natural extension of this is for sellers to look at technologies that can generate greater convenience than current eCommerce experiences and [email protected] technology is a key enabler.
According to Telsyte’s research, close to half a million Australian households have subscribed to recurring delivery services during 2018, including services such as weekly meal delivery services or pet product delivery services, paving the way for more automated buying systems.
However, Telsyte recognises key challenges exist with IoT-Commerce, including resistance from existing channels and supply chains, as well as technical challenges in getting fragmented systems to work together.
While there are similar privacy and data security concerns for IoT-Commerce compared to overall [email protected] adoption, Telsyte research found saving money in the long term and the potential for free appliances in exchange for longer term service agreements (eg a free fridge for a multi-year minimum spend grocery provision agreement) might help the market grow.