Yes, it's an acronym for Internet of Things. But what exactly is it? Author's disclaimer: A rudimentary explanation for those in need of a quick dummy's guide. Not meant for those neck deep in this space.
We have a continuous desire to make our lives convenient. Take the instance of buying groceries. In the past, convenience meant the shortest possible way to reach the retail store. Today, we expect it delivered to our doorstep at the click of a button. In the future, we would expect our machines to figure that out and reorder it themselves at the right time.
This is already taking place in a nascent manner. The internet is slowly reaching a stage where it no longer has to be accessed, but will be omni-present just like the air we breathe. This will allow companies to manufacture products that can access the network and start talking to each other.
That, in essence, is Internet of Things. It's like giving a voice to all the objects around us. Kevin Ashton, digital innovation expert, who is credited with coining the term, says, "The devices will speak with each other and collect information about us and help us in knowing when things need replacing, repairing or recalling, and whether they were fresh or past their best."
These devices have already made their presence felt in our lives - Echo, Fitbit, Amazon Dash button, etc. are such examples. They will be there in our homes, cars, on us (as wearables), office, etc.
Picture this: Your alarm clock not only wakes you up but also instructs the toaster to toast the bread. In the meanwhile, your refrigerator had automatically reordered a milk carton yesterday as the earlier one was near empty. Your car connects with your phone and selects the shortest route to reach office, and printer in your office automatically contacts the repair service as it senses regular jamming of paper.
All of this is possible and experts predict that more than 25 billion devices will be connected by 2020 generating hundreds of trillions of data points. (I personally believe that this is very ambitious and would stretch the timeline to 2030). Marketers who are obsessed with getting as much customer data as possible will surely be delighted. Companies will have to make significant changes in the manner in which they manufacture and market products to the customers.
Some of the possibilites are:
Adoption of lean manufacturing techniques
With devices talking to each other, in the context of brands there will be a need for a wider range of products to be made available as market segmentation increases. For eample, gadgets will be able to self-diagnose their problem and how long will they be able to function. This will prompt them to call for their replacement. Lean manufacturing will help companies fulfil those orders promptly.
Faster Delivery Mechanism
As IoT leads to scenarios of auto-replacement and auto-replenishment, companies would be expected to have strong logistics partners or build their own delivery mechanisms. Consumers will expect the product to get replaced within certain hours or days and unavailability of that will lead to switch in brand preference.
Efficient Inventory Planning
The continuous stream of data coming from different devices will ensure a constant self-optimisation process within companies. The inventory planning department will deploy data scientists to generate the trends for each SKU (Stock Keeping Unit) and accordingly help them plan their inventory to optimised levels. This will bring in efficiency and better deployment of resources for the company.
Better selling techniques with real time interaction
With growing ease of getting all forms of customer data, brands will be able to better predict the sales cycles and offer customisation at an individual level. Retail outlets could have digital signage that could give out personalised messages as they understand how that particular person interacts with those products.
Personalised CRM (Customer Relationship Management) programs
IoT will generate detailed consumer insights with respect to their buying behaviour towards each set of products. The customer decision and buying cycle will be shorter, and basis the insights, content will be personalised; brands will plan individualised CRM plans to ensure customer retention.
Interruptive advertising will be dead
As customer behaviour will become more evident, brands won't have to plaster their messages and banner ads all over different websites. They would know the trigger points and make themselves available only in those places where the customer hangs out and is most likely to see and interact with the communication.
CTR (Click-Through-Rate) of 90%+
A sheer delight for a digital marketer to scale CTRs of this level. This will happen because of specific targeting done by the marketing team. The purchase decision points and insights would be readily available to ensure better understanding, and thereby better placement of personalised content.
Quick resolution of customer complaints
The devices will constantly provide feedback to the companies for repair or replacement leading to faster understanding of issues and thereby quicker complaint resolution. Companies will also be able to use that data to rectify those mistakes at the manufacturing end thereby making more efficient products.
However, like with most technologies, IoT comes with its fair share of concerns. The two primary ones being data security and privacy problems. For example, a hacker can break into a house through a washing machine that is connected with other home appliances and crack the code of the security gadgets. At the same time, an IoT pace maker that is not regulated could send out sensitive personal medical records of that individual to a hospital or pharma company.
Each of these topics merits a detailed discussion, as we move forward on this journey.
(The author is head maven, Windchimes Communications, a digital experiential agency)