We live in the era of increasing connectivity and availability of broadband. The cost of getting online is decreasing, and more devices are being created with WiFi capabilities, built in sensors, and other innovations. This is a direct result of the decrease in technology costs, and the rise of the smartphone.
All those things are combining to create a “perfect storm” for the Internet of Things (IoT). Technology research firm Gartner predicts that by 2020, there will be upwards of 26 billion connected devices. These devices will span everything from consumer to industrial uses, from oil rigs to cars to our homes.
The IoT market today is about $917 billion, but Statista predicts that by 2019 it could be as much as $1.7 trillion. There’s no denying that customers are falling in love with connected devices and the Internet of Things. Just take a look at the popularity of devices like FitBit and Nest. There’s definitely a boom in the retail internet of things, and retailers are jumping on board with great success.
Why consumers love IoT
Consumers are drawn toward all kinds of IoT innovations because connected devices serve to personalize the experience for each and every individual. Take Samsung’s connected fridge, for example. The fridge is accessible via smartphone, so people can see what’s inside their fridge from anywhere through a WiFi enabled camera. It can also help save and manage shopping lists items and favorite recipes.
This also provides added convenience for consumers. Tasks can be easily completed with a smartphone in combination with a connected IoT device. A connected air conditioner, for instance, can be adjusted by someone from their office to cool their home so when they return it’s at a specified temperature. This saves the inconvenience of coming home to an uncomfortable household, adjusting the temperature, and waiting for their living space to cool down.
These kinds of “smart home” innovations in IoT also have cost benefits. By having a connected thermostat, usage can be minimized during certain times in order avoid waste. It’s these kinds of smart devices that actually provide solutions to common problems that are gaining real traction with consumers.
Finally, IoT is increasingly being used for security purposes by consumers. According to recent figures from HBR, extended home security capabilities is the number one reason that people engage with IoT devices on a regular basis. In fact, Microsoft recently introduced a kit that allows homeowners to remotely control motion sensors and surveillance cameras at their home in order to actively monitor security no matter where they are.
Why retailers love IoT
There’s no doubt that IoT is becoming a major advantage for retailers as well. Part of the reason is that retailers can leverage IoT technology to create a seamless consumer experience across devices. So whether a consumer is engaging with a brand on a smartphone, tablet, or connected device itself, they receive a consistent brand experience. These devices all give customers greater detail in order to provide a better experience with the retailer. Connected devices for shipping, for example, can alert a customer in real-time when their package is in the area.
In addition, IoT use in retail can help provide valuable customer data that companies can use for to improve customer experience. L’Oréal, for example, is working on connected mascara and make-up kits that communicate with back-end systems and customer data in the cloud. If someone decides to put on a certain shade of purple, L’Oréal can then use that information and send the consumer a push notification of recommended clothing and lipstick that might go well with that particular shade. It’s all about taking the information generated by consumer’s interaction with IoT products and using it to make life better for the customer.
This is creating seemingly endless advertising opportunities for smaller marketing budgets. That’s because retailers are taking an omnichannel approach by utilizing email, social media, online, and IoT marketing in concert. Advertising cross -channel is a much more cost effective approach than taking out expensive TV ads, for example. Retailers see greater ROI with online advertising because of the very specific targeting options available on most platforms. It then becomes much easier to quickly drive consumers directly to what they want based on preferences and marketing engagement patterns. And in digital marketing, everything is trackable and quantifiable, allowing for easy ROI tracking and reporting.
As technology progresses, the Internet of Things will only become a bigger part of consumers’ lives. That’s because of the added convenience and personalization many of these devices provide. Smart retailers are wise to jump on the bandwagon, integrating IoT with retail best practices and omnichannel marketing.