Now that we've accepted the idea of the Internet of Things (IoT), researchers are starting to look at when, where, how, why and who will use it. They're also looking into potential risks.
Recent research from IDC, for example, shows that retailers are leading the charge to the IoT in the quest for better customer experiences.
According to IDC, retailers see the IoT as a way to improve customer experiences. Specifically, they are using it to pull consumers into one of their channels, where they will entice them with products that have been contextualized and personalized for the customers’ gratification.
Nexus of Forces
The findings are contained in an IDC report entitled Developing IoT Use Cases for Retail by Leslie Hand. In it, she points to five specific areas of technology that retailers are using to provide superior customer experiences.
What emerges from the report is the fact that all the technologies we talk about on a daily basis, like digital marketing, customer experience management, customer relationship management, e-commerce and mobile technologies, are all coming together with the IoT to provide an almost perfect nexus of forces.
Of course, theory and practice are two different things and the reality of customer experiences once the IoT has reached maturity will probably be considerably different.
According to Hand, successful customer experiences with the IoT will require a complete reimagining for brands led by well-trained employees who have both the information and the tools to enable engaging experiences.
But what exactly are we talking about here? According to IDC, the installed base of the IoT will be 212 billion by 2020, which will include 30 billion connected "things" by then. This accords with other estimates by other research organizations like Gartner.
Gartner points out that in 2009 that there were 2.5 billion connected devices. By 2020, there will be more than 30 billion in a variety of shapes and forms — many of which don't even exist today, Gartner predicts. Growth around the Internet of Things will start outstripping growth in traditional IT sectors by 2017.
IDC expects growth will be driven by intelligent systems that will be installed and collecting data across both consumer and enterprise applications.
Of all the investments made in the IoT last year, nearly 10 percent of it was made by retailers and by 2017 this will pass $466 million with IDC identifying five primary areas of IoT investment in retail including:
- Product tracking/traceability
- Interactive consumer engagement and operations
- Mobile payments
- Asset management
- Fleet and yard management
According to IDC, IoT technologies will offer four main advantages to retailers:
- Consumer technologies: Consumers want to be connected and engaged if its saves money and time. However, retailers also need to guarantee security and privacy.
- Radio-frequency identification (RFID): Retailers will get considerable benefits by using RFID, including improved inventory management, sample management, loss prevention and on-shelf availability among others.
- Convenience technologies: Consumer demand for convenience, product availability, and personalized and contextualized interactions will drive retailers to adopt multiple IoT technologies.
- Cloud-based IoT: Many IoT technologies have matured to the point where use cases are well defined. Use of cloud-based versions of those technologies improving return on investment (ROI).
IoT For Retail
According to Hand, retailers will be one of the driving forces in the adoption and spread of IoT technologies that use sensors, analytics and information to create intelligent, automated solutions that generate customer loyalty through better performance.
For retailers, the advantage of the IoT is that it provides them with insights into customer behavior that enables create customer experiences that are personalized and live up to customer expectations.
Moving into the future, though, the customer experiences that are being offered by first adopters is also going to shape the form and the speed at which the IoT will be adopted.
As more and more consumers interact with more and more IoT-enabled retailers, consumer expectations are going to change. Positive interactions driven by the IoT will promote the idea that every experience can and should be a "best" experience.
Omnichannel retail demands will see more consumer focused projects put in place. Responsiveness, transparency and agility are all key elements used to ensure that consumers have all the information they need to make informed purchases. Hand sums this by simply pointing out that “every missed engagement opportunity is a gift to a retailer's competitors”.
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