The internet of things and how your brand can benefit
The Internet of Things (or IoT) has been ‘a thing’ for a while now. But it’s only really in the last 18 months that we’ve started to feel the impact. From tracking our workouts using a smart watch to adjusting thermostats and lighting on our commute home, the IoT is becoming ingrained in our daily routines.
But what is the Internet of Things? Well, according to my Amazon Alexa, the IoT is ‘the proposed-internet like structure connecting everyday physical objects equipped with RFID or similar tags.’ Simple enough.
However, what I think Alexa is probably unable to describe, in her rather monotone-like way, is the exciting possibilities that the IoT brings with it. Essentially, anything with an on/off switch has the potential to be part of it, though that’s not to say everything should.
In 2017, Gartner estimated that there would be more connected devices than people by the end of the year, 8.4 billion to be precise. So, as IoT devices become more and more accessible to consumers what does this means for brands?
The opportunities for brands has expanded exponentially as a result of the connectedness of the IOT.
The IoT allows brands to connect and engage with new and existing audiences in ways they never could before. The IoT devices provide huge volumes of data and with it the ability to understand a consumer’s behaviour and their context. A brand can now know who a consumer is; what they like and dislike, how they live, what matters most to them and how this might change depending on the time of day, their location or with the device they’re using. For consumers, it means a brand can understand them in the here and now, and can adapt and personalise content and experiences at an individual level. This is letting brands build deeper, more meaningful relationships, allowing them to be seen to be more relevant and delivering real value.
Walgreens, the US pharmacy, is a great example of a brand embracing the IoT technologies to bridge the online and offline shopping experience. Their mobile app is designed to change to an in-store mode when you enter their store, highlighting the features most relevant to a shopping experience such as store information and layout, voucher codes and loyalty points. Beacons are also used within the store, they send push notifications via the app to inform customers of product offers based on the displays they’re standing nearby, and their buying preferences.
These personal connections are enabling brands the biggest opportunity of all from the IoT, to create exceptional brand loyalty. In creating a personalised and seamless customer experience, brands are becoming part of everyday routines and a preferred choice without them having to consider alternatives. In 2016 Amazon introduced the Dash button, letting customers re-order products at the push of the button. It benefits Amazon as it secures the sale, and for the product brand it rules out persuasion to buy a competing product as there’s no shopping around.
Aside from impacting immediate brand experiences, data that’s being captured is also helping brands in the longer term by identifying patterns and predicting future trends. This enables them to develop and improve products and services as well as create more targeted marketing.
For some businesses, the purchase of a product is becoming less valuable than the information gathered over the course of the customer’s interaction with the product.
Coca-Cola is one such example. Their freestyle machines have 150 different Coke concentrates that allow users to create their own varieties. This not only allows people to have their favourite drink, but the information gathered can be used to influence future flavours and products put into production.
With the IoT comes one big drawback. The concern for data privacy. The potential for hacking is one of consumers’ biggest fears, with 66 per cent fearing that hackers could gain control of their connected devices. Consumers are putting more and more trust in brands to keep their data safe. Such high expectations of data security can mean irreparable damage to a brand’s reputation if breached. So brands need to consider the investment that must be made in secure systems if they want to benefit from the opportunities available from the IoT.
However, IBM is making positive predictions for the security of IOT in 2018. They’re working to introduce Blockchain into the equation, a continuous block of records that are linked and secured using cryptography. This should help to build trust in the minds of the consumer as records are split between hundreds of physical locations, so no one person has full control to change them. They’re also anticipating the growth of ‘edge technology’ where data can be processed and responded to within the connected device without the need for upload to the cloud.
Even with secure systems, not everyone’s going to be happy about handing over their data, or giving away the recipe to the next best-selling Coke drink for free. Brands need to negotiate that fine line between creating value and delight for a customer and being disingenuous or just a bit creepy.
The first step to avoiding these pitfalls is to make it really clear to customers just what they’re signing up for. Creating that opt-in, a legal requirement in many cases, is also an opportunity to engage with customers, helping them to see what’s in it for them and where they can expect to see their experience improve. By being able to anticipate personalised content or experiences they can appreciate them even more. And, in the process, there’s an added advantage in how the way you collect data, and explain the need for it, can reinforce or change attributes associated with a brand.
With Gartner now predicting the growth in the number of connected devices will be as high as 20 billion by 2020, the IoT is creating huge potential for brands of all industries to create unprecedented brand loyalty. As brand sentiment is rooted in the customer experience, companies using the Internet of Things will surely lead the way from now on.
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