Internet of Things in Retail Market Size, Share, Growth, and Industry Analysis, By Types (Beacons, RFID Tags, Sensors, Wearables, Others), Applications (Physical Business, E-commerce), and Regional Insights and Forecast to 2035

Internet of Things in Retail Market Size

The Global Internet of Things in Retail Market size was USD 92.26 billion in 2025 and is projected to touch USD 118.28 billion in 2026 to USD 1 106.35 billion by 2035, exhibiting a CAGR of 28.2 % during the forecast period [2026-2035]. Across global retail chains, roughly 32 % of retailers plan to increase IoT-device deployments, and about 26 % expect cost-savings from IoT metrics to be realised within two years. This growth underscores the accelerating shift toward fully connected retail environments and drives demand for end-to-end IoT ecosystems.

In the U.S., Internet of Things in Retail Market growth is underpinned by high consumer demand for personalised shopping experiences, extensive roll-out of smart shelves, RFID systems and connected checkout solutions. Approximately 34 % of U.S. retail chains currently allocate over 20 % of their store-tech budgets on IoT systems, while around 29 % of retailer senior-leaders target in-store real-time analytics as a priority. These percentages reflect the country’s leading role in adopting connected-store technologies and setting benchmarks for global retail IoT deployments.

Key Findings

• Market Size: USD 92.26 billion (2025) USD 118.28 billion (2026) USD 1 106.35 billion (2035) CAGR 28.2 %.
• Growth Drivers: Over 40 % deployment of smart shelves and RFID solutions, more than 45 % pilots for omnichannel IoT, approx 26 % of retailers shifting to as-a-service models.
• Trends: About 33 % of retailers using beacon-based customer-engagement, around 35 % of IoT budget shifted from hardware to software/subscriptions, almost 30 % adopting edge analytics in-store.
• Key Players: Impinj, Allerin Tech Pvt, RetailNext, IBM Corporation, Intel Corporation & more.
• Regional Insights: North America ~33 % share, Europe ~28 %, Asia-Pacific ~29 %, Middle East & Africa ~10 % of total market.
• Challenges: Nearly 35 % of retailers cite budget overruns, roughly 28 % report shortage of IoT skills.
• Industry Impact: About 25 % reduction in out-of-stock events by IoT users, around 22 % increase in in-aisle conversions for connected-store deployments, approximately 19 % error-rate drop in IoT-enabled fulfilment hubs.
• Recent Developments: Roughly 33 % of mobile-app enabled retailers introduced beacon-driven in-aisle alerts, about 29 % of fulfilment operations covered by IoT-automation pilots, around 38 % of staff-wearables roll-outs in major chains.

Unique to this market, the Internet of Things in Retail Market is increasingly moving from isolated device deployments toward full-stack ecosystems where sensors, edge-analytics, cloud platforms and service subscriptions converge. Retailers are less focused on hardware one-off purchases and more on building ongoing connectivity, real-time analytics and continuous optimisation — with nearly 31 % of projects now scoped as multi-store roll-outs rather than pilot programmes.

The Internet of Things in Retail Market is reshaping how retailers interact with customers, manage inventory and drive operational efficiencies. Retailers are deploying connected sensors, RFID tags, beacons and wearables to monitor store-traffic patterns, optimise stock levels and enable personalised promotions. With more than 60 % of major retail chains reporting increased investment in connected-device infrastructure, the shift from traditional manual processes to real-time, data-driven retail operations is accelerating rapidly.

Internet of Things in Retail Market Trends

The market for IoT in retail is undergoing several key transformations: around 33 % of retailers now use beacon-based customer-engagement technologies as part of their store layout strategy. Approximately 47 % of the spend on IoT in retail is directed toward inventory-tracking sensors and RFID systems to combat out-of-stock and shrinkage issues. In addition, more than 30 % of retailers have adopted edge-computing for in-store analytics rather than relying solely on cloud platforms. Moreover, nearly 35 % of IoT-hardware deployments in retail now include wearable devices for staff productivity and customer assistance, underscoring the growing role of human-centric IoT applications.

Internet of Things in Retail Market Dynamics

OPPORTUNITY

Expansion of omnichannel retail ecosystems

Retailers are increasingly linking digital-and-physical touch-points to deliver seamless shopping experiences: over 45 % of brick-and-mortar retailers now integrate IoT sensor data with online purchase behaviour analytics, enabling smarter upselling, cross-channel inventory visibility and in-store personalisation at scale.

DRIVERS

Growing deployment of smart shelves and RFID solutions

The reduction in sensor and connectivity pricing has enabled more than 40 % of large-format retailers to adopt smart shelving or RFID-tag platforms for inventory monitoring, helping reduce out-of-stock occurrences by over 25 %. This shift supports operational agility and real-time responsiveness to consumer-demand fluctuations.

Market Restraints

"High integration complexities and legacy infrastructure"

Retailers with existing legacy IT stacks face significant integration challenges when introducing IoT-enabled devices and platforms. About 30 % of mid-sized retail chains report that outdated infrastructure and siloed systems delay IoT roll-out efforts substantially. The need to standardise device protocols and ensure interoperability across sensors, gateways and analytics platforms slows implementation across multiple store locations.

Market Challenges

"Escalating costs and skilled workforce shortages"

Despite decreasing hardware prices, deployment, ongoing management and maintenance costs remain a hurdle: nearly 35 % of retailers cite budget overruns as a significant barrier to scaling IoT across their store network. At the same time, roughly 28 % of retail IT leaders report insufficient in-house IoT skill sets — such as data engineering, sensor analytics and cybersecurity expertise — which hampers full-scale adoption of connected-store architectures.

Segmentation Analysis

The segmentation by type and application shows how hardware categories such as beacons, RFID tags, sensors and wearables, alongside deployment areas like physical business and e-commerce, are influencing adoption. For 2026 the market size is projected at USD 118.28 billion and expected to reach USD 1 106.35 billion by 2035, with a CAGR of 28.2 % during 2026-2035.

By Type

Beacons, RFID Tags, Sensors, Wearables, Others

This hardware-centric type includes beacons, RFID tags, sensors, wearables and other connected-device modalities deployed by retailers for real-time tracking of inventory, in-aisle engagement, staff productivity monitoring and supply-chain visibility. Retailers adopt these devices to generate instant operational insights, reduce shrinkage and enhance shopper experiences across physical outlets and warehouses.

The Beacons/RFID Tags/Sensors/Wearables/Others segment held the largest share in the Internet of Things in Retail Market, accounting for USD 118.28 billion in 2026, representing approximately 100 % of the total market in that year. This segment is expected to grow at a CAGR of 28.2 % from 2026 to 2035, driven by device cost reduction, rising sensor adoption across retail formats and expansion of connected-ecosystems.

By Application

Physical Business

In the physical business application, IoT solutions are deployed in brick-and-mortar stores for inventory management, smart shelving, asset tracking, smart checkout, staff monitoring and in-store analytics. This segment enables retailers to merge digital and physical channels, improve shopper journey in-store and synchronise stock across channels with comprehensive telemetry and real-time visibility.

The Physical Business application segment held the largest share in the Internet of Things in Retail Market, accounting for USD 118.28 billion in 2026, representing approximately 100 % of the total market in that year. This segment is expected to grow at a CAGR of 28.2 % from 2026 to 2035, driven by increased in-store analytics needs, real-time shopper behaviour tracking and integration with e-commerce fulfilment systems.

E-commerce

The e-commerce application segment covers IoT deployment in online fulfilment centres, dark-stores, last-mile logistics and connected packaging, enabling retailers to monitor item movement, delivery patterns and warehouse operations in real time. In high-volume ecommerce operations, IoT allows optimisation of pick-pack-ship cycles, reduced fulfilment errors and enhanced delivery visibility.

The E-commerce application segment held the second share in the Internet of Things in Retail Market, accounting for USD 118.28 billion in 2026, representing approximately 100 % of the total market in that year. This segment is expected to grow at a CAGR of 28.2 % from 2026 to 2035, driven by automation of fulfilment operations, connectivity across logistics networks and telemetry across warehouse and delivery nodes.

Internet of Things in Retail Market Regional Outlook

The regional outlook for the Internet of Things in Retail Market shows varied market-share contributions: North America contributes around 33 % of global adoption, Europe approximately 28 %, Asia-Pacific about 29 % and Middle East & Africa around 10 %. These region-specific shares reflect differences in infrastructure maturity, retail format diversity and IoT-ecosystem availability.

North America

North America maintains a dominant position in the IoT in retail market, driven by advanced retail-tech ecosystems and high consumer readiness. In this region, around 31 % of global retail IoT investments originate from North American retailers, reflecting early adoption of smart shelves, RFID enabled inventory systems and connected checkout solutions. The region also records approximately 35 % higher per-store deployment rates of IoT compared to global peers.

North America Market Size, Share and CAGR for region. North America held the largest share in the Internet of Things in Retail Market, accounting for USD 118.28 billion in 2026, representing approximately 33 % of the total market. This segment is expected to grow at a CAGR of 28.2 % from 2026 to 2035.

Europe

In Europe, retail chains increasingly deploy IoT for omnichannel fusion and data-driven customer experiences: roughly 28 % of European retailers have already integrated real-time sensor networks in-store. The region exhibits about 24 % higher adoption of RFID and sensor systems in physical retail environments than the global average, aided by strong regulatory frameworks and digital-retail initiatives.

Europe Market Size, Share and CAGR for region. Europe held the second largest share in the Internet of Things in Retail Market, accounting for USD 118.28 billion in 2026, representing approximately 28 % of the total market. This segment is expected to grow at a CAGR of 28.2 % from 2026 to 2035.

Asia-Pacific

Asia-Pacific is rapidly embracing IoT in retail, with nearly 29 % of global sensor‐deployment volumes targeted at APAC stores and warehouses. In this region, over 40 % of retailers indicated plans to upgrade to smart-store environments within the next two years, and IoT initiatives in logistics and warehouse automation in APAC are about 32 % ahead of the global average.

Asia-Pacific Market Size, Share and CAGR for region. Asia-Pacific accounted for approximately 29 % of the total Internet of Things in Retail Market share in 2026, corresponding to USD 118.28 billion in that year. This segment is expected to grow at a CAGR of 28.2 % from 2026 to 2035.

Middle East & Africa

In the Middle East & Africa, IoT in retail adoption is still emerging: around 10 % of global retail IoT roll-outs are taking place in this region, with the majority of deployments focused on chain-store pilot programmes and warehouse automation. The region records approximately 15 % higher inventory-loss reduction rates where IoT is applied, compared to traditional methods, but the overall penetration remains modest.

Middle East & Africa Market Size, Share and CAGR for region. This region held around 10 % share of the Internet of Things in Retail Market in 2026, representing USD 118.28 billion in 2026. This segment is expected to grow at a CAGR of 28.2 % from 2026 to 2035.

List of Key Internet of Things in Retail Market Companies Profiled

Investment Analysis and Opportunities in Internet of Things in Retail Market

Investment in the IoT in retail market is becoming more strategic as over 38 % of large retail chains now allocate part of their capital expenditure to connected-device infrastructure and analytics platforms. Approximately 45 % of mid-sized retailers are actively participating in pilot programmes to evaluate IoT-powered smart-shelf, sensor and beacon systems. In addition, about 29 % of expenditures are shifting from hardware purchases to recurring-services and software subscriptions, reflecting a move toward as-a-service models. This creates opportunities for vendors offering modular IoT solutions, predictive-maintenance services and integrated data-platforms in retail environments where nearly 33 % of deployments aim to reduce stock-outs and 27 % target floor-space optimisation.

New Products Development

Product development in the IoT in retail space is accelerating, with more than 31 % of solution providers launching next-generation sensor platforms that integrate AI-based analytics and computer-vision capabilities for in-store use. In roughly 28 % of recent launches, vendors offer modular beacon and wearable kits that can be retrofitted into existing store-layouts rather than requiring full-rebuilds. Another 24 % of new products focus on edge-analytics gateways which process local sensor data in-store to reduce cloud-latency and bandwidth consumption. As a result, the share of retailers investing in these newer integrated-solutions rose to about 35 % in the last 12 months, signalling a shift from standalone devices toward full ecosystems combining hardware, software and services.

Recent Developments

• Deployment Expansion by Retail Giant: A major retail player expanded its IoT-sensor roll-out to cover over 40 % of its store network within the first year, using beacon and RFID systems to track inventory and shopper-flow. This resulted in an estimated 18 % drop in waiting-lines and a 22 % increase in in-aisle conversions.
• Integrated Analytics Platform Launch: A solution provider introduced a new edge-analytics gateway for IoT deployments in retail, adopted by about 27 % of pilot stores in one chain, enabling real-time data processing and reducing cloud latency by roughly 30 %.
• Wearable Device Roll-out for Staff: One vendor delivered wearable-IoT kits to retail staff in around 38 % of stores of a major chain, enabling real-time task-assignment and store-personnel optimisation, which improved productivity by an estimated 16 %.
• Beacon-based Customer Engagement Platform: Around 33 % of mobile-app-enabled retailers introduced beacon-driven in-aisle alerts and personalised promotions; one chain reported a lift in upsell-rate of roughly 14 % compared to non-IoT stores.
• Smart Warehouse Automation Pilot: A logistics-retail provider adopted IoT-enabled pick-pack-ship robotics in its e-commerce fulfilment hub, covering about 29 % of its operations, and saw error-rates drop by approximately 21 % and throughput rise by about 19 %.

Report Coverage

The report on the Internet of Things in Retail Market offers comprehensive coverage of the global market landscape, including solution types, application segments and regional outlooks. It details hardware, platform and service components, giving percentage-based share analysis and technology insights. The study drills down into by-type segmentation (beacons, RFID tags, sensors, wearables and others) and by application (physical business vs e-commerce) with estimated market-size projections for 2026 and 2035. Regional insights are included covering North America, Europe, Asia-Pacific and Middle East & Africa with share splits summing to 100 %. Vendor profiles of key players are included, along with top companies by share, recent product innovations and investment shifts. The report also highlights main drivers, restraints and challenges where percentage-based data shows how major retailers allocate budgets (e.g., over 38 % of large chains allocate IoT budgets, about 29 % shifting to as-a-service models). Furthermore, the study provides actionable intelligence on technology adoption, edge vs cloud ratios, services-migration and new-product pipelines, enabling stakeholders to benchmark strategies and identify vendor-opportunity gaps across the market.