Hugh Fletcher says brands that don’t ‘lock in’ consumers now by adopting smart technology risk being ‘locked out’ of the customer relationship in the future by their rivals.
The Internet of Things (IoT) may well have entered the technology world as a buzzword. Many seemingly ground-breaking technological developments have proved a flash in the plan and quickly faded away. However, if successfully integrated, innovative technologies can completely revolutionise worldwide industries. The Internet of Things has moved well past the status of a buzzword and developed into an idea that is changing the way consumers experience their daily lives – although some might not even realise it.
Simply put, the Internet of Things is a network of physical items that are connected online and communicate through internet-enabled devices and systems. Gartner predicts that, by 2020, the amount of IoT-connected devices will reach 20.8 billion and there will be an incredible 6.4 billion devices by the end of this year, which is almost one for every single person in the world!
Facebook’s Aquila drone aims to bring connectivity to remote areas, but is still a few years away from being put into operation.
Despite Gartner’s prediction, it’s near impossible to measure exactly how many active devices there are to date, but it’s clear to see the impact IoT devices are having. It’s no surprise that Amazon, Facebook, Tesla, Google and many more huge players are embracing IoT into their central business offering. Some applications are obvious – Tesla is harnessing IoT to develop a machine-learning car, while Amazon’s recent foray into drone deliveries and Facebook’s equally ambitious solar-powered Project Aquila offer two examples of why IoT is not a feeble buzzword. What a company and its marketing team must consider is how to implement an IoT-led platform that ultimately benefits the customer. Embracing IoT serves no-one and no business if the consumer cannot remember the company behind the idea.
Internet of Things and programmatic commerce: a game changer
Retail is fast-moving and consumers themselves are extremely changeable. Brand recognition is often the difference between successfully built businesses, or forgotten brands – such as Woolworths, Austin Reed and BHS; granted, BHS was a special situation, but there is an argument to be made that the company failed in its attempts to innovate with consumer trends. When it comes to IoT-led approaches, Programmatic Commerce is an emerging concept that is likely to redefine the industry as it stands – consumers will benefit from automatic ordering and replenishment through their connected devices based on customer data. Put simply, a coffee machine will recognise the customer is low on beans and re-order some. A fridge will realise milk is low and order the customer’s favourite brand. Much like Amazon Dash, Programmatic Commerce comes at a time where consumers are beginning to understand the benefits of technology in shopping.
Salmon’s Programmatic Commerce report found that 57% of consumers will be ready for automatic purchasing without any need for purchase approval within two years, and 13% mentioned they are ready now; 58% agreed they would opt for smart technology if it facilitated this type of shopping. Commerce brands must recognise that they cannot retain customer loyalty if they do not embrace new technologies. As Programmatic Commerce takes hold, retailers must cement their relationship with the consumer or face being ‘locked out’ – this is where consumers remain loyal to one brand, which can then be continually re-ordered through a smart device leaving other brands ‘locked out’. IoT technology and machines can facilitate this loyalty, and retailers that are the first to offer a speedier, more convenient service will be the ones that ‘lock in’ customers.
It’s an IoT-led world, but it would be nothing without data
When it comes to the customer, data and IoT go hand-in-hand. Data allows IoT devices to frame and develop accurate trends based on the user’s preferences. Take Google’s recently introduced Home device that allows consumers to play music, ask questions and use the firm’s far-reaching search function. It can’t quite control the room’s lighting and heating like British Gas’ Hive application, but Google has designed the device to learn a user’s preferences and provide a personal touch to daily life. The clever device captures the trend of zero UI (the idea of removing the barrier between user and device) and is all about timing. With more connected devices entering our homes, consumers are becoming more willing to embrace virtual personal assistants into their lives. Google Home and Hive show how technology will impact consumers’ lives.
Data intertwines perfectly with IoT and plays a very strong role in enabling brands to retain their customers’ loyalty. Connected Life, a recent study launched by Kantar, confirms how vital it is for businesses to understand their customer base: 38% of 70,000 respondents said they would allow their data to be shared with brands if they saw a reward in return. This supports the concept of ‘locking in’ a customer. Google dominates its respective industries by putting the customer at the forefront as the most important stakeholder.
As Google builds its brand out through IoT-led services, its customer base will follow. Brands that fail to recognise the undeniable impact of technology cannot expect to retain customer loyalty. IoT and machine-to-machine (M2M) can capture this loyalty and ‘lock in’ customers by making brands the first to offer a convenient service that improves the overall consumer experience.
IoT’s rise to prominence shows no sign of slowing down
It’s not at all surprising that IoT devices are beginning to impact almost every industry. Companies like Amazon, Google and Facebook continue to implement innovative products because they understand how new technology can help them retain and grow a strong customer base. Shying away from innovation will do nothing but lead to a loss of customers and business. The implementation of IoT must benefit the customer journey, expand a business’ offering and improve the overall service. Tesla isn’t the world leader in driverless cars for no reason; Amazon doesn’t lead the retail space by mistake; and Google isn’t a tech leader in its own right by chance. Embrace IoT now or face losing out to smarter, technology-led competitors that do.