Over the past year, the internet of things (IoT) has made an interesting shift from devices to services. Instead of focusing on the devices that connect to one another, companies have moved the focus to the services they can offer with these devices. This has created a gold rush of sorts. Companies of all sizes have realized there is a lot of money to be made with IoT and that those that jump in now will get the best results.
If you are thinking of taking part in this gold rush, you're not alone. In fact, Juniper Research predicted that retailers will increase spending on hardware and installation to $2.5 billion by 2020. That is almost four times the amount spent in 2015.
To learn how brands can reevaluate the way they operate under the lense of IoT, I spoke with Kit Hughes, CEO and Founder of Look Listen. A veteran technology entrepreneur, Kit has helped brand digital and traditional experiences for national and international brands, including Anheuser-Busch, BP, Coca-Cola, GE, and more. Currently, he has focused his efforts on partnering with brands entering the IoT marketplace to assist them with the transition.
From my conversation with Kit, here's what I learned about the potential of IoT:
The Changing Market
As this gold rush takes off, marketers will notice a major change in the way people interact with products. The IoT has caused people to form emotional connections with products. Data is the foundation of this connection.
Because of this connection, people respond differently to marketing materials. For example, they do not just want to hear that GE has a new refrigerator coming out. They want to find out what this refrigerator can do for them beyond keeping their food cold. People are more interested in the embedded cameras and multiple sensors they can access from their smartphones than they are in the traditional uses of the device.
More than that, they want to know how these services will benefit them. Brands need to pick up on this shift and adjust their strategies accordingly. Instead of talking about keeping the food cold, marketing should feature everything else it can do. Go beyond the packaging and dive into what the customer wants. Understand that the customer does not just want to have his or her basic needs satisfied. Today's consumer needs to have his or her emotional needs met as well. Brands that find a way to market to the emotional sides of customers get the best results.
Goals have always been a big part of brands' marketing strategies, but the way brands set those goals is going to have to change as well. Instead of setting basic goals, like creating the best refrigerator, brands need to set goals based on an entire experience. This is the only way to benefit from everything the IoT has to offer.
Nike did this very well. Nike set the goal of making people healthier. Then it developed its Nike+ running shoes. Nike+ running shoes include a sensor that tracks data when people run, and then it sends that data to a device. In addition, it is integrated with Nike's own social network, along with other networks. This creates an immersive experience that traces back to one thing, which is Nike's goal of making people fit.
Communicating Across Channels
Companies must learn how to communicate across multiple channels, such as social media, email, newspapers, etc., to correctly to reach their target audience and thus find success during this gold rush. The IoT has given birth to infinite channel marketing. There is no limit to the marketing channels people have access to, which changes the marketing landscape dramatically.
The businesses that perform the best in this new world learn how to communicate across different mediums. The more they are connected to, the better they are able to get their messages out to the world.
The brands that learn how to analyze the right signals and provide an optimized experience based on those signals will enjoy the most success during this gold rush. Brands already pay attention to signals like social media posts and website visits, but the IoT has changed the landscape to include more signals. These are not the same from one device or one brand to the next, so each brand must set its own parameters when identifying signals.
For example, a company that makes a smart toaster could pay attention to how long each person in the household toasts bread. Then, it could personalize the experience for each member of the family.
On the other hand, a company that makes GPS devices could track the routes the driver takes each day and then offer suggestions to save time or gas. This type of real-time service is an excellent way to use IoT signals.
The more data a company collects, the easier it is for it to handle the thousands of optimized experiences it has to tackle each day. Companies will be able to predict outcomes and automatically send solutions out to people based on the signals they track and the data they collect.
Collaboration Instead of Individualism
Currently, most businesses focus on individualism. They want to tackle the market on their own. That needs to change if companies want to be successful with IoT. IoT cannot be dominated by a single business. Companies that are willing to work with others across various platforms have the best results.
The Internet of Things is the most exciting change to the tech world since Bitcoin. As any good prospector will tell you, you need to get in early in order to get the best results. Start developing a strategy so you can stake your claim during this gold rush.