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The “internet of things” (IoT) concept is in its nascent stage of development, but it is on the verge of exploding. To put its development into context of another more recent phenomenon, this is the stage of development in which MySpace was attracting the earliest adopters in the then-burgeoning social media industry. Simply stated, there are many more iterations of the IoT universe until this concept reaches public consciousness.
Even so, as consumers, devices and now things become more connected, the possibilities in terms of what could be leveraged as a vehicle for enabling commerce are now endless. In time, the idea of a smartphone as a commerce device could be old news as commerce moves beyond simply portable consumer devices to include durable goods, such as refrigerators, washing machines or automobiles.
Below are five of the most promising digital commerce opportunities brought forth by the IoT era:
(1) Improved logistics resulting in more efficient order fulfillment for today’s digital consumer
“Internet of things” technology provides greater visibility across the fulfillment process, enabling retailers to better meet the demands of today’s consumer who is buying more online. Such technology enables companies to track orders from the moment an order is placed to the second it reaches the consumer’s doorstep. Each piece of inventory is able to be tracked through a management system so goods can be located automatically no matter where they may be.
(2) Automation of certain commerce aspects, such as product replenishment for durable goods
Given that many durable goods products require continuous replenishment, notably detergents, fabric softeners or printer ink, there is an opportunity to automate the ordering process. Subscription services started to streamline this process by measuring how frequently a family ordered specific items from a retailer. The “internet of things” could enable consumption to be more accurately measured within the durable good itself. Both Whirlpool and GE Appliances have integrated Amazon’s Dash Replenishment Service into their appliances to allow supplies to be automatically reordered based on consumption.
(3) Enable durable goods manufacturers to establish a long-term relationship with end-consumer
Manufacturers now produce washing machines or refrigerators with lifecycles spanning 15 or 20 years, which limits the ongoing interaction with its consumer base. Establishing a relationship through a connected appliance or automobile could be a way to remain in consumers’ minds over the life of a product. For example, printer manufacturers could offer the ability to facilitate cartridge replenishment from the printer itself. In addition to the long-term relationship, the IoT could create new business models with fresh revenue streams for these participants. For example, manufacturers could adopt service-orientated business models by offering remote monitoring, performance analytics and predictive maintenance as an ongoing service for said products.
(4) Access to more data to better influence consumer decision making
The increase in the number of connected things equates to more data from which marketers can gain insight into consumer behavior. The additional data will give marketers more direction on how to appeal to these individuals and how to influence shopping decisions along the path to purchase. For example, this could equate to more intuitive websites customized to the individual consumer. The greatest challenge facing marketers is how to navigate the volume of new data. If accomplished, though, this increased data would allow consumer-facing brands to better tailor products, services and offers to their full range of consumers.
(5) Marriage of brand and personal data to build more personalized experiences
Beyond simply more bytes of data, the “internet of things” network could leverage various connections around an individual to provide for more personalized information and actions. All of the collected data could be interwoven with more personal data to further personalize the experience for each household and for each member within it. For example, in a home with a smart fridge, each family member could receive an experience tailored to their preferences or in a connected car the offers could be tailored to the driver behind the wheel.
While the growth of commerce in the emerging IoT area will not be without challenges, these five opportunities make it worth the long drawn out fight. Commerce players will need to keep in mind, though, that unlike the arrival of computers into the home, which slowly introduced consumers to the idea of digital commerce, or more recently smartphones, which introduced consumers to the idea of anytime, anywhere commerce, the “internet of things” ecosystem will not be characterized by the arrival of a single device or thing. “Internet of things” is fundamentally about creating an ecosystem of internet-connected things, which ultimately will have implications in terms of future commerce experiences. “Internet of things” is slowly arriving on the scene day by day, thing by thing. As a result, IoT-enabled commerce will be more of an evolution rather than a revolution .
