From enhancing our homes to improving our shopping experiences, the Internet of Things affects our daily lives. According to IHS Markit, there are around 20 billion IoT devices across the globe and this is likely to rise to 50 billion by 2020. Information is flowing even more quickly and the ability to adapt and be agile within digital marketing will be crucial for businesses to remain competitive.
The journey to “convenience”
In retail, convenience and personalisation are the king and queen when it comes to consumer experience. Brands have already found that IoT is an enabling technology to deliver both of these at scale: Juniper Research expect $2.5bn to be spent on retail IoT investments by 2020 worldwide.
Amazon announced last year that they will roll out a 'no checkout line store' called Amazon Go. The technology used will consist of smart shelves that are aware of stock levels, beacons that detect store movement as well as image analysis. The store is said to use “sensor fusion” that congregates disparate data sources to improve the accuracy of recognising products. The invisible payment aspect relies on smart devices to identify products and individuals in order to charge their Amazon accounts. Whilst not yet a reality, I believe that more retailers will look to implement similar systems which will have an impact on affiliates marketing as well as how brands look at partnering with retailers to create in-store brand experiences.
Amazon Go may be at the forefront of retail innovation however the humble barcode scanner (the precursor to IoT experiences) is still the most widely adopted tool by retailers. Integrations between scanners and smart home appliances will become more commonplace. Amazon are already using Amazon’s Dash Wand integration with Alexa, which provides some A.I. features to make the shopping experience less of a chore.
The integration of Dash and Alexa will improve brand stickiness and increase take up of subscription services by enabling customers to conveniently order items without leaving their homes. However, the convergence of this technology is providing a unique challenge to advertisers. For example, a study conducted by Syniverse Research revealed that 75% of consumers do not think that their data is safe with advertisers. Finding the balance of respecting customers' privacy yet adding meaningful personalisation is key to shaping the future of personalisation in IoT.
Voice search is also growing. It is thought that 50% of all searches will be image or voice based by 2020. Digital advertisers will need to cater for the wide array of devices with many of these not having a physical display.
Current and future challenges: a call to the market leaders
Currently IoT technologies feed into their own silo data platforms allowing the manufacturers of these devices to gather the information, interpret and react to their users. Yet significant challenges need to be overcome to connect the individual devices. The goal being to find an overarching platform to anonymously recognise behavioural outputs and store these in a meaningful way. DMPs seem to be a natural fit to perform this function due to their native connections with other platforms.
So, what does this mean for your marketing budgets?
The potential of IoT in marketing is yet to be realised. The challenges of breaking the silos and finding the value of connections will be greatly beneficial to all stakeholders involved. IoT can formulate bigger transformation projects, but is currently over looked in favour of smaller marketing automation use cases. Budgets in 2018 should reflect both internal and external investment into IoT.