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Logging onto the Internet of Things

The internet of things can offer insights into what customers really care about. CHRIS PETERSEN reveals how retailers can leverage this emerging technology sector for a more effective selling strategy.

The ‘Internet of Things’ (IoT) has to go down as one of the worst-named product categories ever. A recent study indicated that 79 per cent of consumers had no idea what IoT stands for or what it means; however, the path to purchase requires that retailers have some understanding of what it is and the opportunities it presents.

According to Wikipedia, a British entrepreneur named Kevin Aston first coined the term Internet of Things in 1999 while working with radio-frequency identification devices.

Hard to believe that there wasn’t another name but IoT seems to have emerged as the catch-all term to describe any object that can collect, share and transmit data.

The IoT is a network of seemingly-everyday items like appliances, cars and even buildings that are connected to the internet. These devices can be connected in ‘smart grids’ to monitor a wide variety of machines and people.

The result is that IoT devices can churn out a mountain of monitoring data, as well as creating a seamless experience for the user, group or business using them.

Each IoT object is designed to work in concert with the others. For example, if a woman is returning home from work, her car could send a signal to her smart-home device, which would then set the air-conditioner to her preferred temperature so the house is cool when she steps inside.

The garage door is also connected so it would know when she is arriving and open just as her car is pulling into the driveway.

Enter smart jewellery. Combining society’s obsession with connectivity and style, smart jewellery refers to an assortment of rings, bracelets, necklaces and earrings that aim to improve health, productivity and communications, all while maintaining a fashion-first stance. The latest iterations are less gimmicky and more wearable, shattering the notion that they can’t be worn daily and making a strong case for the title of jewellery.

The IoT also includes wearable ‘smart’ jewellery, which combines society’s obsession with connectivity and style. Smart jewellery refers to an assortment of rings, bracelets, necklaces and earrings that aim to improve health, productivity and communications, all while maintaining a fashion-first stance. The latest iterations are less gimmicky and more wearable, shattering the notion that they can’t be worn daily and making a strong case for the title of jewellery.

Unlimited potential

Estimates predict that there will be 25-billion IoT devices on this planet by 2020 – and this estimate may be conservative. All of these devices will be wirelessly connected to the Internet of Things, each transmitting data.

There are untold uses for IoT and applications for every industry. Devices could monitor everything from manufacturing machines to planes and track the movement of products across every step of distribution.

"Stories make products real and relevant to consumers. When consumers can’t see the technology or features, they need to see and hear how it these features are personally relevant"

IoT devices can also monitor critical health functions in wearers and alert them to visit the closest doctor in the event of an irregularity. Wearable IoT devices – wristbands and even clothing – can already track exercise, sleep patterns and even intimate moments if required.

In Australia, Melbourne researcher and jewellery designer Leah Heiss has created a range of ‘diabetes jewellery’ which can painlessly monitor and administer insulin as well as the Smart Heart necklace to collect and transmit heart data for cardiac patients.

The role of IoT in documenting the lives of consumers would seem to be a perfect opportunity for retailers yet selling IoT devices in retail stores has thus far been a challenge. Why? Well, most consumers simply aren’t aware of IoT.

As IoT sensors are embedded into their respective devices and not easily seen, consumers might not even know their appliances are IoT capable. Unless consumers are wearing Fitbits or similar devices, they also rarely use any of the information coming out of their devices to improve their daily lives.

The challenge for retail

Recent surveys indicate that four out of five consumers don’t have an understanding of IoT or appreciate the value of owning an IoT device. These findings are remarkable because most consumers already own a device with IoT capability – smartphones, smart TVs and most recent cars, which usually integrate Bluetooth connectivity, online radio and navigation, if not web browsing.

Wearable technology has become mainstream too but there remains great potential to expand this category. Consumers are naturally cautious about products like Google Home and Amazon Echo. Voice activation makes these devices easy to use but also plays into wariness that people have about being recorded.

Indeed, concerns about privacy and who can access this personal data are at the forefront of consumers’ minds. This is something retailers should address.

Consumers don’t have any perceived value of how IoT can benefit them. A considered purchase requires that the buyer sees personal value before spending a significant amount of money on an item.

When it comes to IoT, factors such as price aren’t the barrier to purchase; the problem is that people just don’t see how these devices can satisfy their needs or requirements.

The bottom line is that consumers don’t buy what they don’t know, use or trust.

Encouraging adoption

IoT could represent a significant retail opportunity if retailers can shift focus. Retailers are stuck in a legacy of merchandising and selling things but IoT is not about selling things at all.

If retailers are going to crack the code on selling IoT, they need to change their behaviours with consumers. Today’s consumers aren’t buying objects just because they connect to the internet so IoT devices will not sell well unless retailers change the customer experience (CX).

With all the other objects competing for a share of the consumer’s wallet, IoT has largely been a non-starter because consumers can’t ‘see’ the features in action. hey can’t see the embedded IoT technology and they especially can’t see the personal value in their daily life. This is a tailor-made scenario for retailers and consumer brands to leverage CX.

The power of stories

Stories make products real and relevant to consumers. When consumers can’t see the technology or features, they need to see and hear how it these features are personally relevant.

"It’s a paradox that all this connectivity still requires a human touch to sell it. An accenture study found that 83 per cent of consumers would rather work with a person than get digital help"

The ability to watch other consumers use IoT products and benefit from them would be an excellent place to start. Since the consumer journey starts online, the IoT benefits stories need to be there to showcase value and ease of use. Retailers should focus on terms like ‘personal’ and ‘use’. Nothing sounds more impersonal than data and network talk.

Consumers don’t care so much about what makes something work; they are interested in what the IoT device does for them, how it makes their life better. For example, consumers need to be able to see how they can check if their garage door is open after they leave the house with an IoT device.

This is real, practical value that gives consumers peace of mind and can also save them a trip home. Part of the experience comes from allowing consumers to see, touch, feel and drive.IoT devices by their very nature must connect to networks and the internet. Consumers need to see how IoT devices work and connect.

They also need to know how simple these devices are to use. One reason Fitbit style-wearables are being sold is that consumers can put one on for a test drive in store.

Retailers must emphasise the ways in which devices can make life better. A refrigerator that can keep track of its contents is certainly a novelty but do shoppers really want the refrigerator to send a report or even place a grocery order?

That’s a question for the individual but there are devices that everyone can appreciate. For example, show a customer how an IoT smart-home device can send them a text alert if there is an intruder or if there is smoke detected in the house and they’ll probably agree that alleviating safety concerns is of real value in their personal lives.

It’s a paradox that all this connectivity still requires a human touch to sell it. An Accenture study found that 83 per cent of consumers would rather work with a person than get digital help. If that isn’t a case for the power of customer service in store then what is?

In addition to floor staff, another differentiation opportunity is support after the sale. US appliance store Best Buy’s Geek Squad has created a very profitable enterprise offering technical support to customers on the phone and also in their homes. Why not expand to include IoT devices designed for smart homes and security?

Today’s retailers have to be more than a source of the product – much more! The retailers who differentiate value via CX have boundless opportunities for both sales and service with the billions of IoT devices due to enter the market in the next few years.











ABOUT THE AUTHOR
Chris Petersen

Contributor • Integrated Marketing Solutions (IMS)


Chris Petersen is founder and CEO of retail consultancy Integrated Marketing Solutions (IMS). Learn more: imsresultscount.com

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Tuesday, 17 September, 2019 06:23pm
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