Who in the world came up with the acronym IoT? The Internet of Things has to go down as one of the worst monikers for a product category! A recent study indicated 79 percent of consumers have no idea what IoT stands for, or what it means. The path to purchase requires you have some understanding of what a product or service is. And more importantly, a considered purchase requires you see personal value before spending a significant amount of money. The state of IoT, with consumers, would seem to be a perfect opportunity for retailers, especially stores. Yet, the success of selling IoT devices in retail stores has been pretty abysmal. It has turned out that IoT is not about selling "things" at all. IoT could represent a significant retail opportunity if retailers can shift focus to the basics of customer experience.
Why this is important:Retailers are stuck in a legacy of merchandising and selling things. Today's consumers aren't buying things because they connect to the internet. IoT won't sell well in retail unless retailers change the consumer experience.
IoT: A world of things most consumers don' know, or care about!
The Internet of Things is a network of things, devices, cars, and even buildings embedded with electronics to collect and share data via the Internet. Because these IoT devices are embedded with sensors and network communication, they 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.
I've often wondered who managed to come up with a name like The Internet of Things. According to Wikipedia, a British entrepreneur named Kevin Aston first coined the term in 1999 while working with RFID devices. Hard to believe there wasn't another name, but IoT seems to have emerged has the catchall term describing all types of objects that can collect, share and transmit data.
Only one problem: 80 percent of consumers don't know what IoT is, or care about IoT things.
IoT is rolling out by the billions of devices offering amazing potential
Estimates predict there will be 25 billion IoT devices on the planet by 2020. And, that estimate may be low. More than 30 billion IoT things will be wirelessly connected to the Internet by 2020, requiring a proliferation of IP addresses to accommodate all of these "things" transmitting data. Where are all of these IoT devices and what are they being used for?
IoT devices simply require a sensor and the means to connect to a network. There are untold uses for IoT in industry to monitor everything from manufacturing machines, to airplanes, to products being moved across every step of distribution. IoT devices can monitor critical health functions in a patient and send them to a doctor in another city. Wearable IoT devices (bands and even clothing) can track your key movement, sleep patterns and even intimate moments. If a device has IoT, it can track and report on the machine or you!
Consumer adoption challenges regarding IoT
The number one issue is the fact that consumers simply don't know what IoT is! Recent surveys indicate four out of five consumers don''t even have an understanding IoT, or the value of owning an IoT device. These findings are remarkable in that most consumers already own a device which has IoT capability: smartphones, smart TVs, and especially recent model cars.
The challenge for most consumers is that they simply aren't aware of IoT. Most IoT sensors and technology are embedded in the device and not easily seen. Unless the consumer is wearing a Fitbit or similar device, they also rarely see any of the information coming out of their device that has any value in daily life.
- Consumers don't know what IoT is or how it operates
- They don't have any perceived value of how IoT will benefit them
- They are very concerned about privacy issues and who might access their data
The bottom line is that consumers don't buy what they don't know, use or trust. If retailers are going to crack the code on selling IoT, they need to change their behaviors with consumers!
5 major retailer opportunities in the IoT customer experience
With all the other things competing for a share of the consumer's wallet, IoT has largely been a non-starter because consumers can't "see it." They 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 customer experience.
- Power of Stories
In a recent blog post, we reviewed the power of "stories" to make things real and relevant to consumers. When consumers can't "see" the technology or features, they need to see and hear how it is personally relevant. 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.
- Focus on "Personal" and "Use"
Nothing sounds more impersonal than "IoT," data and networks. Consumers don't care so much about what makes it work … they are interested what the IoT device does for them, how it makes their life better. If consumers can "see" how they can check if their garage door is open after they leave the house, that is a real practical value of IoT which gives them piece of mind and saves them a trip.
- Let consumers see, touch, feel … "drive"
IoT things by their very nature must connect to networks and the internet. As consumers we have been "burned before" by IP addresses, conflicts and connectivity. We need to see how these devices work, connect, and most importantly, the ease of use. One reason Fitbit style wearables are being sold is that consumers can put one on for a test drive in store.
- Focus on personal value over novelty
A refrigerator that can keep track of its contents is certainly a novelty. But, do we really want the refrigerator to send us a report, or even place a grocery order for us? But, show a customer how an IoT smart home device can send them a text alert if there is an intruder or smoke and that safety concern is of real value in their personal life.
- Show the "how" – offer services
An Accenture study found 83 percent 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 I don't what is! In addition to floor staff, another huge differentiation opportunity is support after the sale. Best Buy's Geek Squad has created a very profitable enterprise making technology things work for consumers in their homes. Why not similar services for 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 customer experience have boundless opportunities for both sales and service with the billions of IoT devices coming in the next few years.
For more insight on IOT, check out the Interactive Customer Experience (ICX) Summit which features a session on IoT on June 2. Learn more here.
/ Chris H. Petersen, PhD, CEO of Integrated Marketing Solutions is a strategic consultant who specializes in retail, leadership, marketing, and measurement. He has built a legacy through working with Fortune 500 companies to achieve measurable results in improving their performance and partnerships. Chris is the founder of IMS Retail University, a series of strategic workshops focusing on the critical elements of competing profitably in the increasingly complex retail marketplace.