Retail and the Internet of Things
The heater in my ride begins blasting warm air ten minutes before I hop into the driver’s seat. About two miles into my trip, the car senses that something isn’t quite right with the emissions system and connects with the repair shop closest to my office. The repair shop checks things out, reviews my schedule and notifies me with several appointment times to choose from, then throws in a 25 percent off coupon.
Sounds like a science fiction fantasy, right?
Well it is, because I don’t drive. But all of that other stuff is possible. Welcome to the Second Digital Revolution and the Internet of Things.
Kevin Ashton is credited with creating the phrase “Internet of Things” (IoT) in 1999, while working for Procter & Gamble. The IoT refers to the networking of physical objects through the use of embedded sensors, actuators and other devices that collect and transmit information. Familiar items that never before demonstrated internet intelligence – alarm clocks, heart monitors, refrigerators, clothes hangers – will observe, communicate and respond when their environment changes.
The IoT is transforming the way we live. (Fitbit or Nest, anyone?) According to a recent study by IT research firm International Data Corporation (IDC), the Internet of Things market “will grow to $1.7 trillion in 2020 from $655.8 billion in 2014.”
And of course it will transform (Reinvent? Revolutionize?) the way we market and sell products. With more and more items conversing with each other through IoT connections, companies will have access to mountains of new information. Marketers can analyze and apply this data to create specific shopper outreach programs.
It’s real-time, data-driven relationship building.
When literally anything in the store can become media – shelving, displays, floors, dressing rooms, the products themselves – the strategic direction retail marketers must take is to shift further from advertising to experience creation. And with the detailed information the IoT facilitates, those shopper experiences should prove to be more on-target, more reciprocal, more cost efficient and more successful.
Retail marketers will be able to take personalization to a granular level. All it will take is technology and privacy-eschewing shoppers eager to make their lives better and willing to open their vaults. That’s where it gets a little sticky.
Privacy is an issue for many, and the word means different things to different people. Boomers can be suspicious and fiercely protective of what they consider the personal details of their lives. They’re often hesitant to share information beyond name and email address. The bar is lower for Millennials, who have grown up with digital technology and believe what they get by opting in is worth some personal information.
And therein lies the key – make the shopper’s reward worthy of the information she’s shared. It’s a trade, and she must always get the better end of the deal. (And it helps a lot if her info isn’t hacked or stolen.)
For the Internet of Things to deliver the rich rewards it promises retail marketers, the shopper must be on board. People, then things.