Internet of things (IoT) is a novel paradigm that aims to bridge the digital world with the real world. With the rapid advancements in Internet and communication technology, we are witnessing the dawn of a new era of the IoT in various industries. The retail industry is at the forefront in embracing the IoT, which is expected to change the way customers experience shopping. Drawing on the service-dominant logic, this study proposes that customer interaction with IoT retail technology results in value co-creation. Responses are collected from 289 users of IoT technology in the retail setting. Results of partial least square (PLS) structural equation modelling reveals that ease of use, superior functionality, aesthetic appeal and presence are key determinants of value co-creation for IoT retail technology. Results also show that value co-creation influences customers’ continuance intentions and word-of-mouth intentions. The findings of this study have key implications for retailers in delivering superior customer experience. The limitations and future research directions are discussed.