Market Gravity’s Robin Scarborough explains how the Internet of Things (IoT) can enhance customer experiences, drive business growth and highlights the risks for those that don’t evolve.
The Internet of Things has seen new products and services launching and being developed at pace in the past 12 months. To take advantage of the opportunities from IoT, companies need be open to changing traditional systems, procedures, processes and ways of communicating. They must embrace technological developments to maintain a competitive edge.
The development of connected devices, wearable tech, enhanced connectivity and more powerful sensors is enabling this rapid growth, and heightened awareness and acceptance from consumers means IoT is here to stay. While it may appear that not all business sectors can capitalise on IoT, there are a wealth of companies embracing the technology with further developments expected in the next year within utilities and energy, automotive and retail as well as consumer electronics.
IoT and leading by example
Some of the most exciting developments we’ve seen recently have been from businesses working within the smart homes, connected cars and retail spaces. We are likely to see rapid growth in further new services over the next few years. Ford is a great example of a company embracing IoT development processes – it recently opened a research centre in Silicon Valley to focus on emerging technologies and the company is working closely with Amazon’s Alexa to develop a combined car-home connected technology platform.
In the UK, the AA has developed future connected car propositions, which could help remotely identify breakdowns before they happen, as well as provide motorists with other services such as recommendations and advice.
British Gas has launched a number of smart and connected homes initiatives including Smart metering and Hive. From heating to plugs to sensors, Hive puts the control of everything in the home back into the hands of the customer via an easy to use smartphone app.
Amazon Dash is a pre-programmed electronic device that allows users to re-order common household products at the touch of a button. This sends a Wi-Fi signal to the Amazon Shopping app ordering the item, answering the common problem of shoppers forgetting to replenish stocks of household items, cleaning and washing products and even printer ink cartridges.
Benefits to the end user
Consumers are set to embrace IoT for many reasons: it improves efficiency in their daily lives and saves money; it allows them to personalise their shopping experiences based on previous interactions; and brings integration across devices to make their lives easier in the home, at work, in the car and with their family and friends.
The benefits to the consumer are endless and we’ll definitely see a world where IoT makes lives easier and smarter with well-designed, more discreet devices. Whether it’s for monitoring airport passenger flow, caring for the elderly, or heating buildings or simply replacing a printer cartridge.
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Risks for business that don’t evolve with IoT
Consumers are increasingly expecting every aspect of their lives to be connected, generating vast amounts of data on their previous behaviours and preferences and finding opportunities to make their lives easier. Businesses that don’t take advantage of these data assets (when given permission) will cease to be relevant. Not evolving products and services for a world where everything is connected won’t be an option.
The lines between industry sectors are also becoming increasingly blurred as newer technology companies expand into reinventing old industries (e.g. Apple with music and watches and potentially cars in the future). Maintaining a connection to customers through the data captured and their behaviour patterns will be critical to retaining them. We’re seeing new, outside industry competitors offering disruptive services and experiences, so traditional businesses need to stay one step ahead to remain relevant and compete with new players.
Addressing security and privacy issues
Research from IDC suggests that 90 per cent of all IT networks will have a security breach related to the Internet of Things by 2017. To tackle this, the UK Government has committed £1.6 million of funding to the ‘Hypercat’ consortium in 2014 to develop interoperability standards.
The opportunities for IoT are vast and so too is the potential for security flaws and privacy lapses. Consumers are putting their trust in businesses with their data so they need reassurance as to how that data with be stored, used and accessed. It’s important to consider data protection and how that information will be kept safe and private. Tighter regulation is expected and we envisage there to be industry collaboration to align the standards and policies. Businesses need to maintain credibility by delivering on service promises and keep up to date with new legislation and industry requirements.
You might like to read: 2 in 3 UK consumers concerned about Internet of Things security
Where to next?
Whatever the future of IoT, intelligent devices will become intertwined into people’s lives. There are currently lots of device manufacturers, with few standards, working within an evolving ecosystem. The best strategy for businesses is to take action, plan ahead and be active in the ecosystem but be clear on their future role and where they can add benefit to consumers’ lives. It’s important to take a collaborative approach and to experiment and develop partnerships to build a path to growth and futureproof your organisation.
Start developing prototypes and early proofs of concepts and ideas. Iterate to improve and enhance as technology advances.
Robin Scarborough is partner and managing director at Market Gravity