Berg Insights in its recent report has revealed the growth drivers for cellular IoT connections in the retail industry.
Investment in cellular IoT technology enables the retail industry to use devices such as POS terminals and ATMs at locations where fixed line connectivity is unavailable.
Gartner forecasts IT spending by the retail industry will reach $262 billion by 2027 from $209.4 billion in 2024 and $196.5 billion in 2023. Spending on communications services is expected to grow 3 percent to 1,537.188 billion.
# Expansion of Electronic Payments
Point-of-Sale (POS) Terminals: POS terminals represent the largest segment of cellular IoT connections, making up 93 percent of connections in 2023. The ongoing shift toward electronic payments, particularly in emerging markets, continues to fuel the demand for wireless POS terminals. In regions with limited fixed-line infrastructure, cellular connectivity offers a more flexible and reliable solution for digital transactions.
# Increasing Use of Real-Time Data in Vending and Parking
Vending Machines: Only 6.5 million out of 14.8 million vending machines are currently connected, presenting a significant growth opportunity. Cellular IoT enables real-time telemetry, allowing operators to optimize inventory management, machine maintenance, and service schedules, making operations more efficient. The decreasing costs of equipment and connectivity are also helping to drive adoption.
# Parking Meters: The multi-space parking meter segment has reached a high connectivity penetration (70 percent). Cellular connectivity in single-space parking meters is now a fast-growing segment as operators leverage real-time information to manage spaces efficiently and automate ticketing.
# Cost Reduction and Simplified Deployment
The cost of cellular IoT devices and connectivity services has dropped significantly, making the technology more accessible. Moreover, the simplicity of deployment of wireless IoT solutions compared to fixed-line installations has made cellular connectivity attractive, especially in environments with high mobility or remote locations.
# Emergence of Advanced Technologies (5G, AI, Analytics)
Digital Signage: Although still a niche market due to higher costs, cellular IoT is gaining traction in digital signage as media devices increasingly come equipped with SIM slots. Advanced applications like 3D displays, AI, and analytics will demand higher data throughput, and 5G technology is poised to meet these requirements, making cellular connectivity more relevant.
# Infrastructure Constraints in Remote and Mobile Locations
ATMs, Ticketing Machines, and Digital Signs: Cellular IoT is often the only viable solution for devices in remote locations or mobile settings where fixed-line infrastructure is either unavailable or impractical. This drives demand for cellular connectivity in sectors like ticketing, digital signage, and mobile ATMs.
# Improved Efficiency through Data-Driven Operations
Cellular IoT allows retailers and operators to optimize operations using real-time data, improving everything from inventory management in vending machines to parking enforcement. As organizations reorganize their processes to leverage these technologies, the efficiency gains further justify IoT investments.
The number of cellular IoT connections in the retail industry will grow at a CAGR of 10 percent to 217.7 million in 2028 from 147.9 million at present.
Shipments of cellular IoT devices will increase at a CAGR of 6.2 percent from 57.9 million units in 2023 to 78.2 million units in 2028. These include POS terminals, ATMs, vending machines, parking meters, digital signs and fare collection devices.
Only 6.5 million of the world’s 14.8 million vending machines are online.
The installed base of connected vending machines reached 2.3 million units in North America and 1.8 million units in Europe at the end of 2023. Penetration rate of connected vending machines was 71.2 percent in North America and 42.5 percent in Europe.
Approximately 67 percent of the world’s 652,000 multi-space meters are connected primarily to cellular networks. Only 16 percent of the single-space meters are connected.
The share of single-space meters that incorporate connectivity is now growing rapidly and expected to reach 32 percent by 2028.
Cellular connectivity was incorporated in 52 percent of POS terminals devices shipped in 2023.
POS terminals constitute the largest device segment and accounted for 93 percent of all cellular IoT connections in the retail industry at the end of 2023.
The installed base of cellular POS terminals will grow at a CAGR of 7.8 percent between 2023 and 2028 to reach 200.3 million units at the end of the period, driven especially by growth in emerging markets.
Shipments of display screens for digital signage will grow from 21.2 million units in 2023 at a CAGR of 11.6 percent to reach 36.6 million units by 2028.
Cellular connectivity is incorporated in close to 0.3 million fare collection devices, such as on-board ticket vending machines, stationary vending machines and handheld ticket sales terminals. The market potential for cellular connectivity in public transport will expand as account-based fare collection systems gain ground and increase the need for real-time communications.
The market for wirelessly connected POS terminals is relatively mature, and most of the market growth is driven by the increasing use of electronic payments in emerging markets.
“The multi-space parking meter segment was an early adopter of cellular IoT connectivity and has today reached the highest connectivity penetration of 70 percent,” said Felix Linderum, IoT Analyst at Berg Insight.
Baburajan Kizhakedath
