7 things brands need to know about the Internet of Things
A tectonic technology shift is underway as the physical world becomes part of the web. Our real and virtual lives are merging, powered by smart net-connected chips and mobile devices. As the Internet of Things becomes a mainstream reality, this creates tremendous opportunities for brands: how they form direct, ongoing digital connections with customers, and how they make their business and marketing operations smarter by gaining real-time analytics about every product interaction.
Products are inherently more useful and desirable when they come packaged with personalised digital services to enhance the experience of buying, owning, using and sharing them. When a physical thing – from our clothes, groceries and medical devices to objects in our home and workplaces – becomes connected, programmable, trackable and interactive, and uses data to learn and improve over time, this profoundly changes how it works.
Given the global market opportunity represented by the Internet of Things has been estimated at $19 trillion by Cisco, it’s not surprising that marketers see this as a critical area for innovation and the next playing field of competitive advantage.
Here are seven things that brands need to know about the Internet of Things.
1. It’s happening right now
There is already a growing range of web-connected products on the market including household lights, thermostats and smoke detectors, connected cars and running shoes, as well as products that monitor the health of you, your pets and your plants. Smart products are also being used for a variety of other purposes, including preventing counterfeit goods or improving customer service experiences by making business operations smarter and more responsive.
2. What makes a product smart
A smart product knows what’s wrong with it, tells you where to get spare parts for it or how to find trusted local services if it breaks down. It tracks itself and provides real-time data analytics about how it is being made, sold and used. For instance, a product knows if it’s in the right place and it can tell you if it’s the real thing and not a fake. A smart product also comes with embedded stories of how it has been made and travels with a history of usage and tips from past owners on how to get the most out of it.
3. Smart products have their own digital lives
Consider what your product would do for consumers if it had the intelligence of the internet and its own digital social life. If, in effect, your customer could friend their product, what would it say? Think about the stories that your product could tell them, the advice it could give, the services and experiences and people it connect them with.
4. Products become owned digital media
Not only can Internet of Things technologies make consumers’ lives easier by making their products better connected, but it creates the ultimate owned digital media platform for brands: their products. Formerly inanimate objects will now have the power to communicate directly with end consumers, turning them into valuable owned digital media assets that provide a direct and personalised channel to customers.
5. Smart products build relationships
Making products smart by connecting them to the web enables one-to-one interaction between brand and consumer, allowing marketers to develop ongoing digital communications with the customers that buy their goods and build a database of direct, permission-based consumer relationships based on products and tied to transaction.
6. Connected data drives smarter marketing
As people digitally interact with their physical products, this provides incredibly detailed first-party data about consumer behaviour that can be intelligently reapplied, allowing brands to get closer to their customers. Brands will be able to access consumer data that was previously unavailable to them – including analytical profiles on individual consumer product histories and content interests, plus real-time analytics on segment-based product usage and consumption locations and times – and in return can provide targeted offers and rewards to the customer, to help boost engagement and loyalty.
7. Products behave like the best of the web
Smart products let consumers access the kind of real-time, socially-connected web experiences they’ve come to expect in their daily lives. Now consumers will no longer buy just the physical product, but also the digital services that come with it. Brands have the opportunity to add value through advice and information, alongside an online channel for highly personalised content, tools and experiences. To give a simple example, basic product information and customer help, like manuals and warranty details or repair and protect services and care guides, can now all be digitally stored and accessed from the product itself (and personalised because the product knows where you are, what wear and tear it has suffered and what information aggregated users find helpful).
In short: the extraordinary opportunities for personalised customer interaction and a step-change in service delivery – along with the detailed and dynamic data that connected products provide – will revolutionise the consumer relationships that brands can build and the value exchange with their customers.
Andy Hobsbawm, co-founder and chief marketing officer of Evrythng