Internet of Things And The Future Of Marketing – By Sngido Kundu, Alumnus Of IMI Kolkata
[*This article has been published in IMI Konnect, ISSN: 2321-9378, Vol 5, Issue 1, 2016 of IMI Kolkata.]
Marketing has been evolving continuously ever since it was recognized as an important business function. Over the years the area of focus has shifted from the product to production techniques, from the consumer to technology. In the recent years marketing is becoming more data driven. Data and customer experience (CX) are gradually becoming the cynosure of the marketing decision makers’ eyes.
Internet of things (IoT) is one such technology that is aiding to the needs of the marketer. The idea is to connect to the internet, physical objects that are enabled with capabilities of internet connectivity, data collection and transmission. With wider internet access, lowering costs of microprocessors and smartphone ubiquity, its feasibility is gradually crystallizing. IoT is thus facilitating more interconnection by adding intelligence to the most commonplace stuff like cars and watches. This is resulting in more complex networks, more flow and analysis of data, more value addition to data driven marketing decisions.
The inter-connectivity of devices enabled by IoT is opening opportunities for brands to listen to their consumers more closely and respond relevantly. Data transmitted by devices that surround the lives of people today enables marketers to predict the actions of the consumers in real time. Unlike big data, which enables marketers to understand several customers and their habits, IoT enables marketers to understand one single customer’s habits. An example to elucidate: Point of Sale (POS) data can find out a correlation between purchase of beer and peanuts based on the frequency of their joint purchase. This is a description of the habit of many customers relevant to a retail store. On the other hand, understanding the driving pattern of a car owner from the data transmitted by a sensor enabled car is relevant to an auto-insurer for charging a high or low premium to its customer. Another example could be a smart watch being able to read the heart rate of a person. In case of an anomaly the smart watch books an ambulance and flashes the message “your heart rate is unusual, please sit down and wait for an ambulance that is on the way.” Thus, a good analysis of the data produces a good prediction which makes marketing more relevant to the consumer and enhances CX. Enhanced CX makes the relationship between the customer and the brand stronger; it promotes awareness, interest, purchase and advocacy of the brand.
IoT is trying to create a digital ecosystem which is connected by devices, services and apps. CX will be gratifying only when products can work well in this digital ecosystem. Connected and interdependent performance of products would be superior to silo functionality. Data is thus to be shared and not just collected and coveted.
A lot of marketing efforts do not yield anything because they are not relevant to the customer at that moment. This is largely due to information asymmetry. It is just impossible for marketers to track each consumer’s needs and consumption patterns. But with the ecosystem of IoT in place marketer’s efforts can be more fruitful. IoT enabled products Technology companies would naturally be aggregating the data on how customers are using things and leading lives from the numerous interconnected ‘things’. Needless to say that such information would be too valuable to marketers. One may wonder whether the data collecting companies will become too influential. Yes, they would be. Marketers would have to shift their budgets to access this information. Access to information would probably be one of the competitive advantages of the new age. It would be a good idea for companies to start investing in IoT and develop their capabilities on data analytics. IT analyst firm Gartner reported that 3 billion devices were connected to the internet in 2013 and the count will be 25 billion in 2020. Cisco estimates that from 2013-2022 $14.4 trillion of value will be added to companies globally due to IoT. The numbers reflect the multiplicity and the pace of penetration.
IoT can change business formats completely and compel businesses to change their ways. Marketers as business vanguards need to keep abreast to such potential disruptions. Once the technology is conducive the sleeping giant named IoT will wake up. Any disruptive technology reiterates the theory of Darwin: “survival of the fittest, extinction of the rest”. The wiser should start preparing as IoT remains a revolution in the waiting.
About the Author:
Snigdo Kundu, PGDM BATCH of 2014-2016, Marketing Specialization, currently working with Firstsource Solutions Limited.