The Internet of Things (IoT) is a term that has been passed back and forth within the technology industry for many years now. But it’s only in recent times that the concept has become more of a reality due to a variety of developments that are allowing the technology to be used and controlled by consumers for their own benefit. According to Cisco, the IoT is the network of physical objects accessed through the Internet. These objects contain embedded technology to interact with internal states or external environments. More tangibly, the IoT can take many forms – increasingly connected, intuitive smartphone and tablet devices, apps and gadgets that can be wirelessly controlled. It’s an exciting, fast-moving space to be involved in and is in a constant state of flux – not a month goes by when another internet-connected everyday object or device is launched, proclaiming to save consumers minutes and hours in a time-poor, convenience-first world.
But what does this type of innovation offer retailers? Is the IoT a true disruptor in the field, providing huge competitive possibilities for retailers? Or is it simply a fad and distraction that takes time away from building mutually beneficial and long-term relationships with the customer?
Here we take a look at some of the ways that the Internet of Things is providing new ways of reaching consumers and the challenges and opportunities it will present to retailers who want to remain ahead of the competition.
Does connected really mean engaged?
According to BI Intelligence, there will be approximately 75 billion devices connected to the Internet by 2020. It’s no secret that consumers are increasingly turning to their plethora of Internet-enabled devices to chat to friends, browse clothing stores online and vent their customer service frustrations on Twitter. But being increasingly connected with those around you doesn’t necessarily mean you’re more engaged and invested in brands. In fact, it can mean the opposite. Recent research we conducted with YouGov found that, as a result of the many devices and touchpoints available at consumers’ fingertips, a new breed of consumer has been born.
The ‘distracted consumer’ flits between the TV, smartphone and tablet and back again, multi-tasking and dividing their attention between the many screens. The outcome of this ‘dual screening’ is that these consumers are spending increasingly less time – 30 seconds or less depending on the channel – listening to and reading online marketing communications. They are more selective about the marketing messages they pay attention to, which means that retailers need to savvy about types of message and methods they use to create dialogue with shoppers. The window for capturing a consumer’s interest constantly diminishes. But if consumers are increasingly using internet-enabled devices, be it tablet, smartphone or even smart TV – then it makes sense for retailers to go where the shoppers are and use these channels and devices within marketing campaigns. The challenge is doing this in a way that works for both brand and the individual consumer.
The IoT opportunity
With an estimated average annual growth rate of 31 per cent, the Internet of Things will increasingly become part of the marketing / CRM conversation. However, whether retailers will be successful in integrating the Internet of Things into wider marketing strategies remains to be seen. In-store and e-commerce experiences will become increasingly blurred as shoppers can use technology such as in-store wi-fi or virtual reality changing rooms – to craft an increasingly seamless experience. Here are just a few examples of how the Internet of Things is making a difference today and what it could mean for retailers:
• Did my fridge just talk? – After many years of hype, we may all be soon using fridges that assess when we’re running low on certain food items and automatically re-order through an online retailer. You’re fridge might not literally be talking to you, but essentially it’s talking for you, telling your supermarket that you need milk or butter on your behalf. Many people already use their tablets or PCs to order their weekly grocery shop, but this intelligent and intuitive experience could help retailers maintain loyalty and boost sales by being on hand when needed, before you necessarily even know it
• A beacon of best practice – Geo-location technology has been around for some time now, but the latest wave of innovation in this domain – including Apple’s iBeacon, could transform retailers’ strategy from reactionary to pre-emptive and real-time. The potential of technologies like iBeacon are vast – real-time discounts, help with shopping lists and potentially and end to queuing. All it takes is for customers to install the app of their preferred retailers, and the geo-location technology will do the rest, providing the shopper with real-time updates and discounts based on their journey on the high street
• TV, TV on the wall, where can I buy that silk shawl? – It won’t tell you you’re the fairest of them all, but pretty soon smart TVs and smart TV apps will allow consumers to tap into high-street trends, browse information on products and potentially in the future even allow consumers to buy goods they’ve seen in adverts, or at the very least find out where they can buy them. This immersive and interactive experience not only gives retailers a new way to interact and reach shoppers, but also allows customers to discover more about products at their leisure, which is becoming increasingly important in our time-poor culture.
While these examples are impressive, they are just the tip of the iceberg for the Internet of Things and what it could mean for retailers. The real opportunity lies not just simply in the adoption of these technologies, but how they are used – not isolation but in tandem with a wider marketing strategy to create a seamless and consistent brand narrative. And the key to doing so is taking advantage of the masses of data that these connected devices generate every second and minute of the day.
The devil is in the detail
As the old adage goes, the devil is in the detail and the detail lies in the data. While undoubtedly more sophisticated screens in stores and the portability of experience from store to device will provide a much more convenient and pleasant experience for shoppers – and will in the short-term ensure repeat custom – the data that comes from these connected devices will provide the real make or break opportunity. In today’s ‘always-on’ culture, consumers are becoming increasingly demanding about how and when marketers target them with offers and deals. They not only need to be timely, they need to be relevant and delivered over the right channels. Gaining access to device-level data will become the new battleground for retailers looking to truly take advantage of the Internet of Things. So if consumers are logging into in-store wi-fi, downloading apps for their smart TVs and exchanging personal information on their likes and dislikes, that data and insight becomes gold.
In an age when consumers have become more promiscuous as to the brands they prefer to shop with, relationship-building is crucial if retailers want to maintain loyalty and the bottom line. The more they can learn about habits, shopping styles and even needs will put them in the driving seat when it comes to truly understanding and becoming more intuitive about the consumer’s needs. It’s also important for retailers to feed the insight they glean from these connected devices into their ‘traditional’ marketing strategy, making sure that they not only demonstrate the benefits of using such technology – better, more relevant deals etc – but also that all of the channels being used to reach out to consumers are orchestrated and integrated into one brand voice.
Disruptor or distraction?
There are exciting things happening in the IoT space right now, but the future of the concept still remains to be seen. It’s still a relatively new concept, particularly in its applications within the retail space, but whether it will become a true disruptor or mere distraction will come down to one key factor – how the technology is adopted and implemented by retailers. Many of the innovations in this space have been developed independently of one another, so the challenge for retailers looking to harness these technologies will be how they can integrate them into existing methods. And retailers will also need to be 100% transparent about how these technologies and consequently the data they generate are being used to benefit the consumer. Innovations come and go, some are fads, and others take off. But with Google putting its money where its mouth is by purchasing connected device company Nest earlier in the year, the future looks bright for IoT.