Time for your weekly supermarket trip. You could order online and have the groceries delivered to your doorstep, but you head to the store. You're old-fashioned that way. You grab a cart and put your smartphone, containing your list, in the docking device that doubles as a charger.
Based on your preferences and history, you receive alerts with coupons for items that you want. You're directed to the aisle and shelf for each product and given an option to compare prices. Your phone notifies you of a product sampling of something you'll love down aisle three. As you place each item in the cart, discounts are applied and your total updates. You breeze through checkout, scanning—and paying with—your smartphone.
OK, maybe you're not so old-fashioned after all.
That scenario is fictional but not far from reality. With technological advances, we're entering the next Industrial Revolution, and it will have profound effects on B2C and B2B marketers. The Internet of Things (IoT) is the next big thing.
What exactly is the IoT? It is the interconnection of objects, people, locations, and the Internet. In short, inanimate objects supported by Big Data become smart and can talk to each other and to consumers. IoT is a marketer's wildest dream come true!
According to Stuart Leung of Salesforce, in a column for Forbes, the IoT will make marketing smarter in five ways:
- Easy exchange of sales data
- Smarter CRM (instantaneous customer analysis)
- Devices that know they're dying
- Predictive social media
- Significantly improved click-through rates
I agree. Not only will the IoT make marketing smarter, IoT will make it more efficient. When applying customer and product data, lots of magic will happen...
- Advertisements will be more relevant.
- Marketers will save fortunes currently wasted on irrelevant or poorly targeted ads.
- Purchasing patterns and consumption can be tracked.
- On-demand marketing will increase.
- Pull marketing will be the new norm.
What Needs to Happen First
The IoT is accelerating toward its inevitable tipping point, but a few things need to happen before it completely envelops us:
- Everybody must "play nice" in the sandbox. Doing so will require standards for interconnectivity, data formatting, and exchange. Companies with relatively closed ecosystems like Apple must open up if they wish to remain relevant. They recently, if not reluctantly, adopted Near Field Communication (NFC) technology with their recent product releases. Though companies such as GE, Microsoft, and PTC are posturing to lead this revolution, we must rely on unbiased entities to guide its growth. The Open Internet Consortium was recently formed to address associated opportunities and challenges. The OIC will help address interconnectivity and related challenges; its mere existence is evidence of the IoT's rising popularity.
- Every "thing" must get smart. The enabling technology is already here. That includes RFID, NFC, Bluetooth, sensors, 3-D barcodes, QR codes, and the ability to collect/store mind-numbing amounts of data. However, the IoT will not significantly disrupt marketing until manufacturers strategically integrate this technology into products and packaging. Companies like Rehrig Pacific, a logistics optimizer, are leading the way. Rehrig is integrating NFC chips into packaging, allowing customers to offer unprecedented POS engagement. Just envision serving customized branding/positioning content on customers' phones while they shop.
- Products themselves will become smart. Take shoes for example: Mary says to Gina, "Gorgeous shoes. I must have them!" Then Mary swipes her phone near Gina's shoe, and the Zappos detail page pops up on her screen, complete with a "buy-it-now" button. Your product is now your salesperson.
Applications for marketing and product development are limited only by the imagination.
ThyssenKrupp Elevator recently implemented the use of IoT to collect data from its elevators, which is analyzed by its engineers to fine-tune functionality. As a result, efficiency increases, and ThyssenKrupp is proving itself as an indispensable maintenance partner.
Did I mention that the company makes much of its money on maintenance? Better yet, ThyssenKrupp is able to aggregate data from many customers, learning more about the general product use. This data is used to design more efficient solutions requiring fewer elevators, giving the company a serious competitive edge.
Wearables got a great deal of attention, thanks to South by Southwest (SXSW). Wearables included Nike Fuelband, Google Glass, Fitbit, and the Apple iWatch. Several manufacturers are experimenting with Google Glass on shop floors for machine inspection. The glasses, connected to maintenance and other relevant data, give a full picture of the machine's history and indicate what may need servicing or replacement.
What You Need to Do
- Improve the collection and storage of data. Make sure that tracking mechanisms are in place.
- Be certain that you maintain a very active social presence—the data collected now is an investment that will pay off tenfold when you apply it for demand and POS marketing later.
- Become the workplace IoT advocate—educate senior management, development teams, and anyone that will listen at the water cooler. Start by making sure IoT hardware technology gets integrated into products and packaging. (If you make light bulbs, your dying bulb won't be able to email your customer a coupon unless it knows that it's about to die.) Long-term, sustainable success will only be achieved when all departments collaborate.
- Most importantly, dream big.
Change is on the horizon, and coming at us fast. According to a recent study by McKinsey Global Institute, the IoT could create up to $6.2 trillion in global value in 10 years. The Institute also projects that 80-100% of manufacturers will be using IoT applications by then.
You must decide now: In the near future and the Internet of Things, will you be a leader or follower?
You may like these other MarketingProfs articles related to Marketing Strategy:
- What Is Marketing Strategy? A Brief Introduction
- 10 Ways to Improve Customer Experience [Infographic]
- The Role of Data in B2B Go-To-Market Strategies
- Three Steps to Personalizing the Overall Customer Experience
- Four Steps Marketers Can Take to Drive Growth During a Recession
- The Most Important Elements of a B2B Multichannel Strategy